The New Economy

@55 David

I have heard a similar story abut an entrepreneur sending his business to China because the technology was not available here. A Seattle firm developed and sells a carbon fiber bike. All American tech, high value added. But they off shored the manufacture because China had ready to go factories with equpt not avail here.

An even worse story comes from Affymetrix, the “gene chip” guys. They have recently off shored their entire manufacture to Malaysia. This means a technology that is clearly nuin grwoth phase will now be grown in foreign soil.

Roger and the usual “service economy” bunnies seem to forge6t that very few jobs are generated by services unless there is someone who is able to buy thise services.

If the US is to continue to be competiti9ve we need an industrial policy that is competitive rather than prot4ective. This means we can not simply decide to close our markets the way the Koreans or Japanese have but we do need to to invest in American productivity.

Here are some examples:

1. education. Our current system is only rational by the lights of our healthcare system. No other nation finances mass education through personal debt, no other nation wastes as much as we do on “education” for everybody as opposed to a competitive education for the best students.

2. IP. The USA generates a vast amount of IP but we have only one major agency, DARPA. that attempts to industrialize that IP here and we place no limits on sale of OUR IP to other countries.

3. Infrastructure. A major argument FOR making things here has been our great transportation system. Now we are falling behind the rest of the world while they also pass us in the new infrastructure needed to support computing.

4. Immigration. While we fight over wet back farm workers or Salvadorian laborers lined up at
Home Depot, Canada and Europe are importing the world’s elites to work and produce jobs.

With all that, the hardest nugget may be rethinking what we mean by both “rich” and “middle class.” A system that creates Paul Allen Profligate Plutocrat Plural Palaces is wasteful. However, the suburban mini-mansions that once surrounded Detroit and now infects Bellevue are even more costly to our society. European, Canadian, and Asian developed countries all have successful middle classes with far less expensive life styles than our ours. The average Swede lives better on less money than the average American because their social system deals with issues like education and healthcare."