In the past, others have argued that, with the retirement of the baby boomers, America would be facing labor shortages, so wages and salaries would go up. Freeman says--and he is joined by a number of others, like columnist Thomas Friedman and economist Alan Blinder--that the "flattening" of the world plus the growth of top talent means that corporations can and will go anywhere in the world to find the best people at the lowest price. For decades to come, there will be relentless downward pressure on wages and salaries, not only for U.S. manufacturing workers but also technologists, engineers, and others.

What this means for America is that if we wish to remain great, we must improve--dramatically--the way we compete. We all know this starts with K-12 education, and we have made progress, but it has been shamefully slow and uneven. In May, the Education Department announced that the first nationwide science test in five years found that while fourth graders made some nice gains, 12th graders actually fell back. One of our most progressive states, North Carolina, reports that its multiple universities have over the past four years produced only three new physics teachers for grades K-12. One can find similar signs of complacency in other competitive areas.

Ultimately, these are questions that test our national will. If America is not to slip from great to good, we need civic leadership across the country to light fires and rally energies. Greatness is not something that can be easily preserved; it has to be earned by each new generation, especially in today's hypercompetitive world. The question before us is whether the baby boom generation, now in power, has what it takes.