7 Comments

  1. James August 18, 2008 @ 12:57 pm

    very solid post, thanks for the read… you are very true in saying that the united states of america has produced a lot of contributions for its own people, but the entire world has benefited from it as well. that is the legacy, spearheading change and advancements…

  2. R. V. Case September 3, 2008 @ 7:01 am

    Perhaps it is time to bow off the world stage and focus on matters at home? Not everyone has to be the star of the production. solid post though. I like it. Unfortunately you also forgot to mention that we are also competing with other nations that also want to create that new technology which will influence the rest of the world. I think they will be the ones to make the move for one reason alone:

    “It is going to be hard work, but we in America know how to work hard.”

    I believe that statement was once true. As of 2008 this is no longer the case. On the other hand developing countries that know real poverty have the impetus to push forward and move in new directions. For our society this is more difficult. People in developing countries have very recent impressions of what poverty is, as a result they are jumping at the chance to move forward. If it means that they have to work long arduous hours in a factory so their children (they understand that they; the worker, will not be the recipients of the prosperity) will be able to go to school and have a better life – they are totally willing to do it. I am not sure you could say the same of the American society. We are much more focused on “moral” issues, since the amount of work required to “solve” them is less than actually fixing the society.

  3. Franklin September 5, 2008 @ 7:00 am

    I must agree with you on the point of the fear of poverty as an incentive. However, I think that a change is still possible without the need for deeper erosion of the social wealth in our country.

    I think it is going to be a challenge, but that is something that we must do if we don’t want to create a class of generational sub-occupied workers (that’s it, people who are born and die without having statistical access to full employment).

    Both parties are talking about this change, the need to invest in education, and the need to move forward to new technologies. As the political discourse is laid out, it would seem that one of them has no knowledge to achieve the change and the other is not willing to push it.

    My guess is that whoever wins this year election, we will have to push hard to help him find the knowledge or the willingness to change. My guess is finding the experience will be easier.

  4. R. V. Case September 5, 2008 @ 11:15 am

    I think that although both parties are “talking” about it. They are unwilling (Repub) and unable (Dem) to actually make changes.
    For the Republicans the game has been and will continue to be special interest with underlying appeals to “native ism”. That is specifically to be “American” one is white, Protestant, and Male. The recipients of this buy into the mantra the Republicans are the party of low-taxes and small government – even though the party does not produce precisely because the real motivator for them is the underlying cultural issue; “We” are under siege. Not understanding that the very party that they continue to vote for perpetuates job loss and poor infrastructure, schools, etc. – by cutting taxes and then not being able to cover the bills for those services. So naturally we can’t pay for health care, we can’t afford schools, because we have no money or the Democrats spent to much.
    To be fair there are many Democrats that pursue the same agenda but there are far fewer of them in the party then in the Republican party.

    As for the Democratic party, the writing is on the wall – Universal Health Insurance, leave Iraq, fund school and social programs. However how many Democrats do you think would be willing to stand up to Prudential and Blue Cross and Blue Shield and say your days are numbered? Far too few. What is needed is the courage (enforced or otherwise) that pushed through the civil right legislation. Unfortunately I do not believe that we have any politicians of that character. And while Obama may want to move in the the social democratic method I believe he knows he could not win against the large corporations that essentially run our country.

    We are already a nation in which every year unemployment increases. Where productivity as measured by sale and consumption are always rising and yet the health, loving standards of average Americans are in decline. Heck the rich folk (nothing against them as a class per se) are already rebuilding their shoreline mansions ala The Great Gatsby and the Gilded Age.

    So in a nutshell I think this election is far “less” pivotal than most people think from a political stance. Historic in electing a black nominee, but utterly the same on quality.

  5. Yvonne September 11, 2008 @ 3:24 am

    Hi,
    I believe that statement was once true. As of 2008 this is no longer the case. On the other hand developing countries that know real poverty have the impetus to push forward and move in new directions

  6. Franklin September 11, 2008 @ 6:45 am

    Hi there,
    I don’t buy the free market idea that we need to go down the drain to find our footing. Hopefully we can start something new without a nasty depression to remind us that we need to work in new directions.

  7. 15% of US households short of food - Page 3 November 22, 2010 @ 11:02 am

    [...] Your analysis of why the prosperity of Americans of all strata increased under Clinton, is off. You attribute it to a dotcom bubble is not in fact the reason for it. You leave out that Clinton did in fact create new industries and new jobs that stayed, and did not evaporate when the bibble burst. It is Bush and the republicans thatcreated the financial bubble that put us right where we are today. The need for re-industrializing America | The Politics of Debt [...]

The need for re-industrializing America

Economics, Economy Comments (7)

(Originally posted at my.barackobama.com)

Beyond political discourse, we need to face the reality that America’s economy has been declining since mid 2001. The economic policies of the Bush administration did nothing to encourage the creation of new industries.
If we use the image of an engine to represent the economy, what the Bush administration has been doing is to jumpstart the engine in the hope that it will catch up. Their thinking is “it worked for Reagan; it should be working for us.” However, there is a big difference between the American economy of the mid eighties and today’s.
During the eighties, there was a real economy that could use the added energy to start working and producing on its own. The industrial base of America, built during the war and post war years, was able to take in that extra energy and start working on its own. Today, we have destroyed the industrial base of the economy and there are less and less pieces in the engine that can make it work on its own.
When you do nothing to fix the engine, what happens is that every time you jumpstart the economy, it sputters for a while, makes a lot of smoke and dies. With each new jolt of energy, the engine breaks down little bit more. In economic terms, each one of these jumpstarts creates a new financial bubble. The reason is simple enough. You are injecting a lot of money into the system, but the money has nowhere to go, thus it goes into a financial loop that lasts for a couple of years until it dies out. These financial bubbles create the illusion of prosperity, move money from sustainable ventures into speculative investments. These financial bubbles get everybody running to be the next millionaire and make us forget of how to create real, sustainable wealth. However, when the financial bubbles blow, there is nothing there. There are no new industries, there are no new businesses, and there is only destruction and disillusion.
Conservative commentators try to equate the “dot com” bubble that formed during the Clinton administration to the housing and commodities bubbles of the Bush administration. They will tell you that are the market forces at work, and that bubbles are just part of the economic cycle. The truth is that during the dot com bubble America created new industries, new ways of doing business, new professions, and millions of jobs that never went away. Financial bubbles, on the other hand, leave nothing behind but a wake of destruction.
The Bush administration’s and McCain’s economic policies do nothing to create new industries. Their tax cuts encourage investment in old industries that cannot provide the kind of growth we need. Their easy credit policies encourage further financial speculation because they neglect investment in infrastructure and education, which are needed for the creation of new industries. What they did is to cut the Reagan model and try to apply it to an America that does not resemble the America of the eighties. It is no wonder that we ended up deeper in debt, poorer as a nation, weaker as a military power and at the brink of losing our standing in the world.
The current state of the economy is dismal. The financial system is insolvent and we are at the brink of economic collapse. The past eight years had extended the possibilities of a credit-based economy to almost its full capacity. The society as a whole is in the red and there is only one way to get out of this pickle. As we are exhausting the possibilities of using further credit to make our economic engine work, we need to create new “sources of energy.”
I am not talking about only literal new sources of energy, like alternative energy, synthetic fuels, and such. I am talking about new industries that can start creating real wealth. Part of those industries may be alternative energy industries, but we will need more than that. We need to reverse thirty years of economic destruction during which we saw only eight years of a search for new industries.
America did not become a great country based on financial speculation alone. It became a great country because it was able to export to the world industrial products that the world needed.
Entrepreneurs have only two ways to compete: producing technological innovations that allow for increased production with lower costs, or lowering the cost of their production by reducing wages. Economic reality tells us that in industries with a low level of innovation, the only way to create wealth is by reducing the labor expenses. This is what has been happening in the textile, garment, automobile, and other industries. They moved from the North, to the South and finally across the border.
Unfortunately, we cannot go back the industries of the past century for help. It is time to look at the present with our sight in the future. Going back is tempting. After all, McCain is the devil we know. However, going back will not bring back our prosperity. It is time to go back to work as a nation. It is time to create an industrial base that puts “Made in America” back on the global map.
It is going to be hard work, but we in America know how to work hard. It is going to be difficult, but we have done harder things. People, we are the country that put men on the moon, that is our legacy. We are the country that created a new form of government, and that is our legacy. We are the country that can do, and today we need to shake the daze of financial speculation of our collective heads and start dreaming of real wealth for all hard working Americans.

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Franklin @ August 5, 2008

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