I think the question that needs to be asked in order to restore our economy to a healthy footing would be: How can we once again make America competitive?
It might help to answer the above by contemplating how we lost our industrial base i.e. why did all those jobs and companies go overseas?
The politicians only touch on these topics in a very shallow way. Now why is that?
It appears to me that the answers are much too controversial for our politicians to touch with a ten foot poll i.e. they are more interested in getting elected and re-elected than to really attempt to restore America to the Nation we once were.
US manufacturing that isn’t labor intensive is competitive as far as I know, but the more labor intensive forms of manufacturing are not.
US intellectual capital is pretty competitive, we have the world’s biggest and best tertiary education system.
I’m obviously not an economist. But in a lot of ways we already are competitive.
Ways that could make us more competitive:
Reform our tax code. Again, I’m not an economist but I’ve heard our tax code and the fact that we don’t have a VAT and instead have an income tax puts us at a disadvantage.
Our health care system is overpriced and some of the cost falls on employers.
Our national political system is dysfunctional
The Chinese supposedly have a better public-private partnership model to encourage economic growth.
How do you explain the fact that so many of our jobs and companies have gone overseas? How do you explain the surging Chinese Economy and the declining American Econonomy?
That’s because as technology and education increase more of job force is going into tertiary (or higher) sector jobs while economic development in the rest of the world means that they’re getting manufacturing jobs that require cheap labour
The US is growing slowly right now and the Chinese are a developing country thus they have more room to grow even in a recession.
One would need to compare things like true unemployment rates (good luck getting that for China) and GDP per capita (US - 6-10th in the world or so, China more like 90th or so).
They don’t say that America is no longer competitive. They say that America may become less competitive over the next 3 years as we deal with recovery from the recession and continued unemployment. I don’t see how you can call the #1 economy in the world not competitive. Even if we are #5 in certain measures of competitiveness, that hardly makes us not competitive. We don’t have to be #1 to have a vital and robust economy.
I’m not saying that there aren’t issues that can be addressed, especially unemployment and healthcare. But our economy is mature now. We can’t expect it to continue to grow at the same rate as economies that are at a very different level in their development.
I get the feeling that you already have some controversial answers in mind, and are trying to get people to agree in general that the politicians are cowards so they’ll be ready to agree with some controversial answers.
Why don’t you share what you think those answers are?
The US is not uncompetitive. People say that, but it’s just not true. We have the world’s largest economy, we’re one of the world’s top exporters, and manufacture more stuff than anyone else in the world. People watch our movies, use our software, speak our language, and come to our schools. America’s economy is one of the most productive economies in the world.
What people worry about is China. But the trade deficit with China is a consequence of their currency policy. It’s not a sign there’s anything fundamentally wrong with the American economy.
OP, what problem are you trying to solve exactly? As others have pointed out, the US IS economically competitive. We have one of the strongest economies in the world.
We haven’t lost our industrial base though. I think you are confusing manufacturing output with jobs. It’s a fairly common mistake. Before the current recession, US manufacturing output was actually at an all time high. Manufacturing JOBS were at a low, but that’s because of several factors, but the biggest one is actually automation. Take a look at a modern US manufacturing plant located in the US and you are going to see high levels of automation with few workers.
Things that have actually moved overseas are basically products and services that can be made with very cheap semi-skilled or unskilled labor. The US isn’t best suited for that sort of thing because our semi-skilled and unskilled labor costs a lot of money. Consider that minimum wage in the US would actually be in the mid or even high range for labor in many other countries. You could get a fairly decent engineer for the price of minimum wage in some countries.
I suppose it depends on what exactly you are getting at. Politicians don’t touch on America not being ‘Economically Competetive’(sic) because that is factually wrong…we ARE competitive economically. As for the problem I think you actually want to address, which is why are there so few manufacturing jobs for semi or unskilled labor in the US that pay a good wage, well, that’s something that politicians DO try and address, at least on the left. The trouble is, that the reality is that there isn’t an easy solution, and the politicians are basically just telling their base what they want to hear…that corporations are evil, and that if only we had stronger labor laws and higher minimum wages and better benefits we’d be able to fix this easily. Perhaps if we just put tariffs on our goods or made it so companies couldn’t outsource or offshore this would…well, it would force products to cost more, it would protect American labor artificially and would force companies to have to use it and pay a premium for it, and make cheap labor in other countries uncompetitive.
And yet, our GDP and standards of living are so much better than they were back in the golden age of the 50’s. The average American has so much more real purchasing power than the average American did in the 50’s that it’s ridiculous. Our access to goods and services are orders of magnitude better. Our poor today have access to real world purchasing power that the upper middle class didn’t have back then. Yet, you propose that we are failing and need to restore something that has been supposedly lost. Why is THAT? What do you base your assertion that we’ve lost something that needs to be restored on, exactly?
Manufacturing hasn’t shrunk. The United States has a larger manufacturing sector than ever. What has shrunk are manufacturing JOBS. That’s because instead of hiring a hundred guys with wrenches to turn bolts on an assembly line all day every day, nowadays it’s cheaper to build a machine that can turn 100 bolts, and hire one guy to make sure the machine doesn’t explode.
Would it be better to smash the machine and put the 100 guys back to work turning bolts?
I think that Americans have an image of the industrial world and their place that has been stuck in the glorious years, as we say in French, when they had an ultra dominance in the economy because of 2nd world war and its destruction. This is something that could not be permanent.
But I do read that american logistic infrastructure is degrading and becoming very inefficient on comparison. Perhaps this is the proper subject?