By Fareed Zakaria, CNN
President Obama gave an important speech in Kansas last week. Whether you agree with all of it or not, he has begun a national conversation about the economy and the role of government. That's what this election should be about. And in presenting his view, Obama shifted the economic conversation from deficits alone to the crucial issue of growth. After all, deficits matter because they could have a harmful effect on growth.
So the question we should all ask is: What would make this economy grow? What has stopped it from growing much over the last few years - indeed over much of the last decade?
One theory heard a lot these days is that the economy is burdened by excessive government regulation, interference and taxes. Cut them, the Republican candidates all say, and the economy will be unleashed.
It's a compelling picture, but the data simply do not support it.
The Organization for Economic Cooperation and Development (OECD) released a study last week measuring tax revenue as a percentage of GDP. Of the 30 countries studied, the United States came in 27th. Taxes are low in historical terms as well - the lowest since the early 1950s.
The Kauffman Foundation, which looks at the level of U.S. entrepreneurship, found that in 2010, 340 out of every 100,000 Americans started a business each month. That rate hasn’t changed much in the past few years; it is only slightly higher than in 2007, before the recession. Regarding regulations, Bloomberg News has crunched the numbers and found that the Obama administration has not reviewed or issued significantly more rules than its predecessors.
Or look at competitiveness. The World Bank publishes a report that looks at "Doing Business" across the globe. The U.S. ranks 4th in the world. The World Economic Forum does an annual ranking of overall economic competitiveness. The U.S. ranked fifth. In both these rankings, the countries that score higher are tiny places like Singapore and Finland, with populations often at 5% that of the United States.
And these rankings have not slipped much over the last decade. So where has there been change? Where have we slipped?
The answer is pretty clear. Only five years ago, American infrastructure used to be ranked in the top 10 by the World Economic Forum. Now we're 24th. U.S. air infrastructure has gone from 12th in the world to 31st - roads from eighth to 20th.
The drop in human capital is even greater than the drop in physical capital. The United States used to have the world's largest percentage of college graduates. We're now number 14, according to the most recent OECD data, and American students routinely rank toward the bottom of the developed world in international tests.
The situation in science education is more drastic. Even with the increase in college attendance over the past two decades, there were fewer engineering and engineering technologies graduates in 2009 (84,636) than in 1989 (85,002). Research and development spending has risen under Obama, but the basic trend has been downward for two decades. In percentage terms, the federal share of research spending - which funds basic science - is half of what it was in the 1950s.
In other words, the big shift in the United States over the past two decades is not a rise in regulations and taxation but a decline in investment - in physical and human capital. And investment is the crucial locomotive of long-term growth. In our interview, Michael Spence, the Nobel Prize-winning economist, pointed out that the United States got out of the Great Depression because of the spending associated with World War II but also because during the war, the U.S. dramatically reduced its consumption and expanded investments. People spent less; they saved more and bought war bonds. That surge in investment - by people and government - produced a generation of growth after the war.
If we want the next generation of growth, we need a similarly serious strategy of investment.
Read more on this in my column in The Washington Post this week. For more of my thoughts throughout the week, I invite you to follow me on Facebook and Twitter and to visit the Global Public Square every day.
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America,it seems have become complecent because the good times. Now,they must return to investing to be strong again.
True, Fareed is right about "a decline in investment – in physical and human capital". The two wars have been costing the country trillions. The money would have been wiser spent on infrastructure and education. The neglect of the two discourage corporations from investing in the country.
please read – DISCOURAGES....
Michael Spence was right that the "United States got out of the Great Depression because of the spending associated with World War II". The world economy was rock bottom, but America was not deeply affected. The government and the private households were not heavily indebted like today. As "people spent less and saved more", they could afford to buy war bonds and reduce America's dependence on foreign creditors.
And the reason for the debt of the American people is due to the stagnant wage rate. Had companies raised the pay scales that mirrored their profitability, there would be no need to take out huge loans for homes, rack up credit cards, etc.... Instead of raising the pay for the employees, they decided to loan people money rather than pay them more. This of course is more profitable for the companies! Think I'm wrong? How about GMAC? They were focusing on GMAC rather than focusing on car production!
I have felt like my thoughts of where the real problems lie have been answered in this article!
I agree. Wars have cost our country trillions . Thats why its imperative to have a smart leader during crucial times. Bin Laden was caught not as a result of these wars but by our cooperation with other countires and most importantly our intel. That could have been done easily wthout the wars. I guess a lesson learned, a hard one I should add.
Corporations will not raise the wages of working Americans for one reason only PROFITS. They have to cater to the stock holders and be accountable when the company isn't making enough profit. The first place most companies look to to advance profits is the workforce, less work force doing more work with less pay. Greed has become the norm in America today, the more you have the more you keep for yourself. Besides I think if the tea baggers and Republicans had their way the pay wages and benefits would match those of China, Mexico and India I do believe thats what they are trying to do bring America down to their levels so we can compete instead of making those countries raise their standards they want us to come down to theirs.
To attribute the economic decline in the US to just one cause is rather naive. It is true that consumerism didn`t help, but the global village certainly contributed to outsource American jobs to places where investors got more bang for their buck. To advocate that saving more and spending less is the only solution to our problem, is not only shortsighted, it is moronic.
One example that indicates Spence is wrong is the solar panels: At a time when the US must establish its leadership in the tech market, it doesn`t protect its industry like all Asian countries do, instead, it let less expensives imports drive our local companies bankrupt.
And we continue to spend 20% of our budget on defense while the rest of the world relies on the US to provide free defense. Think about how that money could be better invested in education, research, infrastructure, and jump starting manufacturing. We could be making better batteries and solar panels instead of bombs and bullets. Beware of the defense industrial complex.
The major reason the American Economy sucks is one thing – jobs moved to China and all this other hog wash has little to do with anything.
Educated, high salaried folks account for the biggest generators of debt. They have bigger lines of credit. So eager for the American dream, they expense it. Credit card companies are now incentivising the us of credit cards. There is no economic recovery if you are in debt. I'ts foolish to even talk about it. At best (based on close observation across several industries) American workers struggle to put in 3 hours of work a day. They spend the other 5 reading/blogging, FB, YT and Tweeting while their jobs leave the country. Those who worked hard to build this nation are dead and in the graves. There will be no economic recovery in this generation. There's no perspective of hard work. You cannot just gain this kind of perspective. Suffering and testing of character must take place 1st. This generation is far too spoiled.
This generation is spoiled? What generation are we talking about. The baby boomer generation, i.e. the generation in power, currently making the decisions (private sector and public) that are ruining our country. Or are we talking about Gen Y, the generation that is currently entering a workforce RUINED by the baby boomer generations love of debt and finance? Please tell me we are not talking about lazy gen y. The baby boomer generation came of age in post war america and was the first generation of Americans to have it easy. Baby boomers have ruined this country with their love of the financial sector, debt, flipping houses and by voting into office politicians who are blatantly corrupt. Moreover, they will be the generation that bankrupts social security, medicare and a host of other welfare programs that they refuse to reform. Blame the baby boomers, not their children who have yet to have the opportunity to make their mark on the world. The 6000k+ dead from Iraq and Afghanistan are not boomers but their children. Again blame the boomers they are ruining this country.
Have you looked at the statistics before saying we "struggle to work 3 hours"? America has some of the longest working hours out of any 1st world country, much more than anywhere in Europe at least. We work harder, and make less, because of your generation's failed economic policies.
As for me personally? I work 35 hours a week, but I also go to school. Almost everyone I know that *didn't* go straight to college is working 50+ hour weeks, and the only ones not working are the ones going for engineering degrees or doctorates. Real spoiled eh?
All of the failed policies that are running the US economy aground are those put in place by the Baby Boomer Generation. All the offshoring of jobs, corrupt politicians, bailouts etc. The one unique thing about the Boomers is they never fail to blame someone else no matter how blatantly at fault they are. I went to trade school with some of them who couldn't find jobs and all they did was blame. They claim to be a special generation, the only thing they did differently is never ask themselves "what are the repercussions of my selfish actions" before doing something completely stupid. Boomers wrecked a beautiful America that used to be proud and strong. Good job, just calling it how I see it.
Hey, I am a Boomer. I went back to school when I was 38, got a Masters. Got a Doctorate, and a second Masters. I did two years of service to my country in Peace Corps in my early 30's after a career in business in my 20s. I worked full time went I went to school – everytime, undergraduate, graduate and returned graduate. I am middle class in pay but I am living a rich, rich life in intellectual, health, physical and personal terms. Investment is the issue. Invest in yourself, invest in your neighborhood and your town. Then demand investment from Congress.
Not all Boomers lived a dissolute life. And at 58, I feel GREAT! Not rich, will never retire, but – what a wonderful life! I love what I do, I love my volunteer contributions and I am STILL going back to classes to sew, dance, poetry, statistics, languages, knit... and I am running, yoga, dancing. You have to think of learning and physical fitness as wonderful fun. Eat THAT Donnie Trump! Wealth is more than money.
You have somewhat of a point, but when we look at people who are educated in the maths or sciences, these are the people that can help make a difference in America today. The US needs a new invention, something that will be needed by the rest of the world, so that the world can invest in it. This is how the US gets back on top. My theory is to get back into space exploration .. our sense of curiosity as humans is vast, and it's guaranteed that other nations would invest in the US if we are able to explore in the deep perils of space, or even find new minerals on different planets/moons that could help ease our dependancy on fossil fuels back here on earth.
You think what you're saying makes sense, but unfortunately it doesn't at all. You waisted 15 min of your life typing it. Your time would be better spent learning economics and studying the real causes and effects of the current recession.
Everyone talks about math and science as if it's some kind of cure-all. But the truth is, US agricultural capacity is sufficient to feed 7 billion people, but Americans still go hungry. We have the most developed medical sector in the world, but people still struggle to get medical care. We have a massive, easily accessible encyclopedia of almost all human knowledge (the internet), but we aren't much more intelligent than before. More technology alone won't help us. We need to reform our corrupted society. Instead of striving to improve itself after WWII, the US wasted its resources on wars in places like Vietnam and adult toys like fancy cars. Time to get serious as a country.
Cheap oil makes a nation seem more advanced. If energy is cheap, profit is good. The reality is we will struggle in the future to survive on this planet. This is why life is meaningless. All of what you accomplish will be engulfed by the Sun. You have to believe that you are alive and on this planet, since one day no evidence will exist that we lived here.
I'm a baby boomer, retired now, and I would like to agree that our generation is fully at fault. But, I can't. Now when were the good old days, made of people who saved, no debt, worked hard, etc. Was it the early 1900's when blatant racism, religious and political bigotry ushered in the amendment banning alcohol, leading to mass crime waves, openly corrupt politicians, judges, police? The mass fraud and economic bubble leading to the Great Depression? How about those good old boys, Hirohito, Stalin, and Hitler generations who help them implement their deeds. Maybe the good old days included Churchill, who rose to power ensuring continued subjugation of India declaring the Gandhi and his movement must be immediately crushed, and was saddened to hear, and wondered why Gandhi had not died yet. And don't forget, Churchill was instrumental in 1943 of ensuring the starvation of 3M in India. What about the "great" Joe McCarthy?
What about the good old days of segregation by previous generations, and the great lie of Johnson, MacNamara on the Gulf of Tonkin, which lead to all in in Vietnam, where we admitted to killing 3M Vietnamese before being kicked out.
Yes, there was a time, where it seemed that some sense and progress was being made. Civil rights, more economic equality. The space program, landing on the moon, massive progress in science, engineering. But this was also the time when the US was the only major nation that had not suffered massive destruction in the multiple wars we were involved in. It was a temporary state and an illusion.
There were not just seeds of the US decline when baby boomers came into their own. Rational thought and good decisions were barely holding their own against the forces of sophistry which are in full control today. I would guess that no more than 10% of the population is functionally literate, the rest relying on faiths, beliefs, philosophies and religion instead of reality.
I love how idiots keep blaming boomers for EVERYTHING. If it wasn't for some of the risks that boomers took, people would be dropping like flies from cancer, heart attacks. We paid a heavy price trying to figure out what the work/life balance was and a lot of us are still workaholics and some are recovering from the drug experimentation which damaged so many. We tested the boundaries in ways that let you know that yes there is too much of something. You can't lump society into just one generational category like that. Some people are definitely profiteers, either from the wars or people who have abused "great society" policies but at least we have tried to do something besides blame others. Boomers created initiatives like the Peace Corp. Keep in mind that with the problems we have right now, blame THE VOTERS, for not being attentive to the issues for decades OF ALL AGES, of people being convinced that one should have instant gratification.
We all need to look into the mirror to see who's to blame.
What can I say, shear ignorance.
Instead of blaming each other we should come up with some solutions to solve the issues. What is done is done, we can't change the past but we can change the future of this country and generational blaming is no an answer to our problems.
Dave loves to blame the boomers for everything, but he obviously has no clue. We went to war in Viet Nam because we were government property, not because we hated the people there. The men of our generation were considered a disposable commodity and called "cannon fodder" by their parents generation. The black people who lived in the "land of the free" had no rights, they were treated like an inferior species by the "Greatest Generation." The boomers are the ones who fought to give young men the right to determine their own fate rather than being forced to fight in meaningless wars. The boomers are the ones who forced a racist government and society to give Black People the right to a little human dignity. We didn't do everything right, but our children were born into a more just and richer society than we experienced.
Fareed makes a reasonable point, but why are we not "investing" (always a debatable term in econ/policy circles). There are two critical aspects he does not address –the extraction of wealth by the political/financial machine (ZIRP bailouts, mortgage fraud, etc.), and the unsustainable domestic programs in our budget (simple math will show that 9% growth over 30 years in Medical benefits is unsustainable in an economy growing at 3%). When you're going broke, even great investments become out of reach.
I wish Fareed would talk to Dylan Ratigan or Carl Denniger to undertsand this issue and bring it to a wider audience –it's absolutely draining our economy and killing our growth prospects.
I read Mr. Zakaria's piece and suggest everyone look at "One Minute For Peace. I believe it is a Quaker organization. Ask them for their mailer, a thirty inch strip of glossy paper with the 60% section done in red. It is the military spending every year. We spend 2.1 million dollars a minute for all military costs. It made an impact on my thinking to see how little we spend on health, education and infrastructure, while the bloated military is layers deep, beyond comprehension. Brian
First thing we need a very strong military I agree we could cut back by keeping our troops here in America, we should charge other countries for protecting them. Insted we have to pay those governments to protect them!! if they paid for our protection and we learned to mind our own business we would save trillions every year. Keep our troop home protect our boaders that way we keep the illegals and the unwanted from our country.
You are exactly right. The military and all of the wealth beholden to its spending are sucking this country dry. If we cut defense spending in half we could still field an awesome military defense. It would serve us well to starve this beast in terms of its ability to meddle overseas.
Say we cut the budget more... are we also going to cut the workload? As a recent medical-retiree of the Air Force, I have to say the workload is truly god-awful bad. There have been MANY cuts to the actual number of troops, but the workload has always gone up shortly after those cuts. It is not unusual for military personnel not in the financial careers to work 12-16 hour days for weeks on end every few weeks.
Now, even if you take into account that we are pulling out of Iraq, we still have Afghanistan to deal with. We also have to maintain a viable force capable of dealing with threats. That doesn't mean you can cut each force down to 100,000 people and still maintain every piece of equipment that makes the mission possible.
There are vehicles to maintain, aircraft to manage. Pilots that MUST fly so many hours to maintain their certs. For each pilot, you literally have at least a dozen support crew just to keep the plane and pilot running. For that dozen, you have financial, medical, communication crews. Bases require maintenance, housing, plumbing, etc.
There is more to the military budget than just 'weapons and war'. There is the medical bills of the military and their family members. There is the education money put into schools for their dependents. There are literally hundreds of things that civilians don't think about that the military budget covers, and those things are NECESSARY.
Now I agree, we should close down most of our overseas bases. And our force should be cut back. But at the same time, we shouldn't be expecting the same amount of work from drastically less numbers.
Exactly why do we need a military of the size and cost we currently have? We aren't in the middle of a Cold War. China isn't a military threat. Russia is barely holding its own. Sure, there is terrorism in the world but do we need as much as we have to combat a few hundred militants hiding in caves and in remote villages? Ask yourself – we are expending our blood and treasure widely and economically? I'm not sure we are.
Don't forget the TRILLIONS that were used to bail-out banks, Fannie, Freddie, GM etc and now Europe...
Lots of good comments posted regarding the dearth of engineering majors in US universities and the disincentives. Yes, it seems like the largest rewards in the US now come from finance and brokering shaky deals rather then making high quality products other people can buy. Further, the Wall Street culture borders on being unethical yet we reward it like no other part of the economy. Why do we let too big to fail control so much of our lives? Our brand of capitalism has become destructive.
Isn't that the pure truth?
And there even with all the olther whining and BS comments above is the real truth. We reward the financial and military industrial corps like nothing else as they drag us into one war after another to increase their profit margin or they sit on Wall Street doing nothing except run exorbitant wagers on which way a certain flea will alter its course through a maze and only use taxpayers and retirees funds to back those wagers. And then we allow them to reward THEMSELVES with ridiculous salaries and then allow them to award themselves with even more ridiculous bonuses and the only part of their bodies that have any calluses are their backsides. And how do they keep such corrupt control of all of our lives and enrich themselves like no others in the world? Why they pay the very contributions to elect the corrupt politicians who champion business and Wall Street with every breathe and ensure all laws passed are only those that will protect their benefactors who will insure their reelections. And who do we have to fault for all of this? Only Ourselves, for even knowing all of this, we pick up the newest and latest cheer of the latest group who proclaims to lead us free and allow ourselves to be led to destruction by the likes of the tea party and the bought and paid for Republican Party who owe their very existence to Wall Street.
How can a country go from 5th in world in infrastructure to 24th in only 5 years? Infrastructure spending is a highly stable, long-lead-time endeavor. Fareed is a complete fraud, as always.
It's only all those things you mentioned if the politicians keep financing it. Which they don't. Projects get canceled or delayed endlessly nowadays.
Not only that but a great deal of our infrastructure has not been upgraded or improved for so long that it now has entered a stage where the upkeep is even more expensive and since what is currently there has to be kept up because upgrades and improvements take time in the pipeline we have to maintain the expense of upkeep while at the same time provide funding for the improvements that will be less expensive to maintain and allow us to retire those that are currently so overloaded and taxed beyond ability to maintain. And the reason the funding has NOT been there is we have allowed the financial sector to siphon the wealth from this country in such wonderful things as the Bush Tax Cuts and the stupidly low rate on capital gains taxes and steadily drained the middle class by using them every chance they get. And what do they actually give the country in return? Nothing but a never ending plunge into deeper debt until we can no longer afford to even try and protect our borders, or defend our supposed freedoms while they stroll off to the next major capitalist adv enture laughing at how they took the American public to the cleaners and took them for every cent they had, leaving the USA as a third world country to never know the height they once knew.
The trillions spent on the Iraq war had to come from somewhere. It was borrowed money that was used for the Iraq war instead of money invested in the US physical and social infrastructure. After WW II, the GI bill allowed anyone who served in the military in WW II, to go to any college with full payment plus a stipend to pay for living expenses. This allowed the education of millions of men/women to become college educated and enter the middle class. My uncle would never had been able to go college without the GI bill. It raised him and his family into the middle class and allowed his grandchildren to also enter college. The cost of tuition has gone up greatly in the last 40 years. The public University that I attended has increased tuition by 3000% since I went to school. I know that the over college grad has not seen their income go up by 3000%. We are witnessing the reversal of the post war education cycle where the poor and the middle class are slowly being squeezed out of college much to detriment of our society. Until society makes it a priority to allow everyone to go to college and fail without huge loans, then more and more people will forgo college education because they will fear being burdened with college loans without any way of paying for them. No knows which kid will become someone to solve our major problems because our society is not willing to let some fail.
The problem is we have outsourced our good paying jobs. I don"t know anyone who hasn't been affected by their or a good part of their friends or family's jobs being outsourced to mostly asian countries. If that didn't play a role in our economic life then we wouldn't have a economic problem. I don't know the solution but no one, nobody has even mentioned this as a problem.
Investing in what? Infrastructure, technology, both? I can say that as a member of the science geek/doer class, it is pretty frustrating that an Ivy science degree and a career of hard work has time and again shown me that if I wanted to make money and support my family to the best of my ability and with lower levels of stress I should have pursued other avenues. The death knell for American innovation paying off was the early 90's. A lot of smart (and a lot of the smartest) people have been leaving the innovation professions in droves because there is much better money to be made much more easily elsewhere. There are a TON of landlords and franchise owners out there with advanced science and computing degrees, and fewer and fewer kids in college angling to replace them in thankless tech roles that pay lower and lower rates for grueling hours – we need to make innovation pay off again.
Investing is what caused the bubbles... or have you forgotten that already?
To expand further on that statement, investing in poison assets, and reinvesting them repeatedly caused the derivatives we are so easily forgetting. Couple this with the stranglehold these same financial investing firms in lending credit to the little guy, and you have the stagflation we see in the market today. Given it has stabilized, but for how long? Lets not forget the Euro , right now, is suffering horribly. No, investing is not an issue for growth.... until the underlying issues that created this mess are resolved.
It is not groundbreaking information. It is very well known that all economies are depended on an educated workforce and supporting infrastructure. What is not very well known is our national strategy for the maintenance and well-fare of our economy.
Gasoline sales taxes provides money for the construction and maintenance of our national highways. Airports are usually financed by municipal bonds and federal funds. Our dependency on imported oil and demands that the cost of gasoline be kept low has crippled our nation's political will to raise gasoline sales taxes to finance necessary infrastructure maintenance and improvement projects. Although there is an argument for modernization, America's infrastructure is in fairly good shape and at this point is not a real hinderance to our economy.
It would surely help if America had a national strategic infrastructure plan. Congress working with state governments need to provide the leadership in identifying critical assets and modernization projects, and work to underwrite and encourage public and private partnerships in maintaining the viability of our nation's infrastructure.
Where investment in infrastructure has been a problem of funding and strategic planning, investment in human capital really hasn't been hamper by a lack of funds. When it comes to public education America spends approximately $11,000 per student – the highest in the world. Yet, when it comes to the performance of science and mathematics American students rank very low. The problem of human capital in America is not a problem of funding, but a problem of results.
Immigration and globalism has had adverse effect on America's human capital production. Many local public schools are challenged to teach students who speak English as a second language. Conveniently, many companines outsource employment opportunities overseas or hire H1-B visa applicants. Globalism commodization of labor has minimize regional market forces to adequately respond and motivate human capital production to address shortages and imbalances. Here again federal leadership would help to address the production problem of American human capital.
Other countries are outperforming America because our republic is failing to achieve excellence in leadership. Right now America is a championship caliber organization with very bad managment.
Fareed,
In your interview with Anderson Cooper on the U.S. drone in Iran, you mentioned quote "They can't build a drone, but they figured out a way to hack into the system and bring down our drone". I believe you're mis-informed. Iranians have had an active drone programs for years. In 2007, they filmed a US Air carrier in Persian golf from above using one of the drones. They are quite advanced in R&D and manufacturing of drones:
http://www.patricksaviation.com/videos/amirtomcat/4781/
http://dayna.ir/NSite/FullStory/Photo/?Id=173159
You also got their population wrong. It's not 90 million, it's 75 Million.
And you misspelled "Gulf" not golf unless you are talking about Tiger Woods..
The R&D Iran has is due to strong international influence and assistance.
People complain about engineering and science graduates. Folks dropping out of the program.
Instead of looking at the root cause it is blamed on the young and loss of maths and science skills.
In my opinion this is not because of schools or universities or students, We need to look at the research done by Nobel price winner such as Gary Becker about Human resource dynamics.
There is a bigger problem – Engineers though get good starting salary but very soon hit the salarly limit. They have no job guarantees. They face such an uncertainty in their career that many students hearing about state of the current Engineers in the industry – from their network – fathers, friends or uncles – they don't want to spent time doing something that has an unsure future.
In short, it is due to our business environment where Engineers are not respected or paid. Look at the top management of any company either its a business graduate or a not engineering (ie, english or history or accountant or a lawyer or journalists etc) major. What do you then expect for the students who are looking for future careers.
Thanks
Aditya
Excellent argument.
You are absolutely correct. Especially in an unsure economy why would students flock to an unsure career. Unless business owners can offer better wages and offers of more support in down times the situation isn't going to change.
Creative solutions to this could be addressed if there was a collective study done by these business leaders that need these types of employees to grow and prosper.
I couldn't agree more.
Our society rewards people that can sing, dance, scam, collect trust funds, push propaganda, and hit balls over a fence.
Meanwhile, scientists are seen as evil villains that are out to manipulate data and pursue agendas.
Welcome to Conservative World.
I disagree, to an extent. I'm set to graduate this year in Michigan, which was hit harder than most states by the recession, with a double B.S. in physics and chemistry and have begun looking for a job. Every single company that employs engineers that I've spoken to has said that they can not get enough qualified people to fill the engineering positions they have open. While advancement to upper management might be more difficult with an engineering degree, it is not true that getting a job in the engineering field is "unsure." On the contrary, I've been getting the impression that it is the easiest field to get a job in, if you're qualified.
You're missing the point, yes there are plenty of engineering jobs out there, the problem as mentiopned by several of the people in this forum, is that engineers get an initial good salary, but pretty soon they become stagnant. Aso, engineering degrees become perishable knowledge & skills; if you are lucky to get into a company that rewards these skills and help you develop professionally, you got it made, otherwise, join the rest of the 98% engineers out there
Of course they're having trouble finding qualified applicants. How many years of work experience in their specific field do they want? How many years does the average college graduate have? No wonder why they "can't" find engineers.
Aitya, you are exactly right, but the reasons for not going into engineering in the US are even worse than that. The grading in the engineering courses is so arbitrarily and unnecessarily harsh, that many groups of students who would go into engineering either won't or can't. Grades in these courses are deliberately curved to be 0.5 – 0.75 GPA points lower than the GPA of all other majors. Students on merit scholarships must maintain either a 3.0 or 3.25 GPA don't dare go into the required math, physics, or engineering courses. Students who possibly want to go to medical, dental, veterinary, or law school don't dare go into engineering for the same reason. Students who might want non-engineering summer internships don't dare to explore engineering because all good internships require a minimum 3.0 GPA. We ask our best and brightest to go into engineering and then we kill their GPA for absolutely no good reason, and then we wonder why the best and brightest won't go into engineering. Policymakers - think about this.
Excellent point Aditya. Technology companies have moved to cater only empty suites in the management. Most of management is comprised of non-technical people. Techies are kept at bay due to a false argument that Nerds are not socially liked.. This is the precise reason kids are going for everything except engineering careers. All these tech companies have leadership teams comprised of people with business degrees or empty suite MBA's not subject matter experts from engineering. Defination of CIO/CTO has changed in the last 2 decades, he/she is no more a technologist but someone with a business degree. Most of them make lousy decisions due to lack of domain knowledge. I have seen a matured engineer or a technologist can even sell better when it is comes to technology sales but we see all these second hand car salesmen working /selling for tech companies like Cisco and Microsoft. Companies like Apple are succesful because they have people in management from engineering background who have created something in their past life.
I cannot agree more being an engineering graduate myself. Everyone in this country value businessmen and hedge fund managers and big picture thinkers and the culture limits scientists and engineers because they are detail oriented. They are always bossed around by business and laid off when downturns happen. Look at how Best Buy calls them "Geek Squad". Do you know how low the PHDs are paid in Universities? Why would you make such a sacrifice to get one?
I have a PhD in Engineering, a Master Degree and I am an expert in hydrology and hydraulics. I am also a Latino, legal immigrant, and green card holder. I have 20 yrs of experience, don't make a lot of money (100k in SoCal in not a lot) and recently applied to teach in an University because I used to be a teacher and I want to give back to the US for all opportunities. Do you know how much they pay to be a full time professor in a University in San Diego? Only 49K a year! what a joke! I will be teaching only one class because I like to teach but when you can get a contract for 5 million just because you can sing well on TV there is no issue to pursue such a difficult career path as engineering.
High paying finance jobs are pulling all the intellectual talent away from everything else. People that otherwise would be the most talented doctors, teachers, and engineers are majoring in and pursuing finance because of the massive earning potential.
I know it's kind of a socialist world view, but I think that income disparity between fields should be minimized. Passion should drive innovation, not tax breaks.
That's not a socialist view, that's logic. How many hedge-fund managers can perform surgery, write a computer program, or fix the plumbing?
Never thought of that. That sounds very true to me. Also I would like to add that maybe people are drawn to the big cash that you can make by ripping people off then getting a bailout and never being accountable. I guess it is the old saying: "The Golden Rule: Those who have the Gold make the Rules". Watch "Boiler Room" to see what these jerks do for a living.
Unfortunately the real money today is in jobs that don't produce anything — they're in some area of finance.
So true. I am engineer with an MS degree and I capped out at 37K (which was a great salary back in the early 90's.) Then I switched to a bank where I immediately started making 3 times for 1/4 th the work. I decided early on the if you can't beat them, you gotta join them. No wonder our country is in the doldrums. I would love to go back to engineering but all the work has been offshored by greedy pigs that are the CEO's and CFO's,
aditya – You are mostly right. Years ago companies like HP which were founded by engineers and had engineers as their leaders. Now almost every company is led by MBA: managers who know almost nothing about companies but are supposedly able to "manage" any type of company. Look what happened to the US when an MBA was President of the US, we became involved in a useless war in Iraq even though Iraq had nothing to do with 9/11. MBA look upon engineers as cogs in a machine: any engineer can be replaced by any engineer. Of course one engineer might have spent 20 years learning about a particular area and another engineer might be brand new. Of course the new one is cheaper and that is what MBAs measure: cost.
Isn't this what Dilbert is all about? The engineer Dilbert has all the skills and his clueless boss with the pointy hair makes the big money. See http://dilbert.com/strips/comic/2007-10-26/
I agree that the better growth opportunities are in the business sector. But I don't think that engineers can never cross over into that sector. The smartest people I know have a interdisciplinary education. They take experience from a particular field in which they grew until they hit the ceiling and use it in marketing and business. You can grow into such positions in the same company without ever going to business school but when changing employers that can become an obstacle. So I'd recommend that if you hit the ceiling as an engineer try to find out if you have a sense for marketing, business management or sales. Who could sell a product smarter, who could manage and develop it better, who could lead a R&D department better than an engineer with a secondary business or marketing education? I for my part am an engineer out of passion for solving problems. I try to leverage my engineering education by making my skills and experience available to those who wish they had it: Sales people and marketing. My fee is a percentage of their commission. That way I make almost as much as they do but I don't have to travel as much or kiss as much butt. Because I work with so many sales people I get a pretty good overview of the market and it's needs which makes me a valuable source of information for marketing. None of this would be possible without my in-depths knowledge of the subject matter. So it's all about how you apply yourself.
THE PLEDGE OF ALLEGIANCE FOR CONGRESS WHEN THERE SWON IN."I pledge allegiance to (the flag)my donors,lobbyist and corporations that i will go to work for when I'm voted out ,of The United States of America and to the (republic) media, for which (it stands)we control,what to tell our citizens,one Nation under (God) the top 20% to distribute 80% of The United States wealth to themselves,with (Liberty) Homeland Security to watch our Citizens and justice for all but THE BANKS,WALLSTREET,I.R.S. and Ourselves"
I agree with you on your views related to the President of Venezuela but you need to be more informed about Latin America. The name of the Trade block is MERCOSUR and not the one that you mentioned during your program today few minutes ago.
Please read the article on The Economist December 3rd pag 49 and see information about some progress of the LA that has a long way to go but is a progress. As you know you never say anything positive about LA maybe you are in favor the Militaries that got the power of almost all LA countries in the end of 60, 70 and 80.
One of the biggest mistakes that our American governments have made in the last decades is to completely ignore our neighbors down south. So when these countries start looking to China, Iran and others we have nothing to complaint about. We have ignored them.
Your measures of infrastructure and education are output measures. You said nothing about investment – how much money we're putting into those buckets. US infrastructure spending held fairly constant around 2.4% of GDP until Obama boosted the Federal side by 4x under ARRA. Charts Federal education spending went from 400B in 96 to over 800B in 2009. Chart
I just caught the tail end of your interview this morning (Dec 11th) with some guy (didn't catch his name) on a commissiion to study the effects of Fracking. "Little to no risk from Fracking". ARE YOU KIDDING. This is just another absolutely unbelievable piece of garbage coming out of government. Tell that to the hundreds and hundreds of people whose wells are contaminated. People with sickness; livestock, wildlife, entire water systems being contaminated. Tell that to the entire town of Pavillion, Wyoming.
Just ABSOLUTE GARBAGE. Fracking is DANGEROUS TO OUR WATER AND HEALTH. LET ME LEAVE 500,000 GALLONS OF TOXINS SEALED IN A "SAFE CASING" RIGHT NEXT TO YOUR HOUSE, THEN TELL ME IT IS SAFE. This is another Love Canal in the making, only on a national scale. These companies are pumping millions of gallons of toxic fluids into our lands and assuring us nothing is going to happen. Contamination is beginning to happen more and more. You can bet those "government watchdogs" will have no liability whatsoever. This is a gross misrepresentaion of the real threats to our health and environment.
Stoney Burk
Stoney Burk
Yes you're absolutely right, EPA just published some papers about it, and it stated that fracking has done a lot of damage to near by populations
Forgetfullness
Only two decades ago, disposal of toxic fluids using injection wells was banned by the government. Today fracking is allowed even as only the drilling companies know what it is that is being injected in the fracking wells. SMART!! Because the companies know that if they revealed that their fluids are toxic injection wells regulations would apply.
Who is kidding who? And why do we forget so readily? Have we not learned from our past experiences that there is no need to advance our economy by taking environmental shortcuts because the consequencies only return to bit us in the posterior at much greater cost after we have past?
This is just part of the dis-information that we get from our main stream media. They are bought by lobbyists just like the politicians. we need major change in the govt AND the media.
In your opening remarks you effectively challenged the validity of the position that "... the economy is burdened by excessive government regulation, interference and taxes. Cut them ..., and the economy will be unleashed." I wish that you had taken the opportunity to explore this with Gov Huntsman. When pushed a little, he seemed ready to discuss issues based on facts and without demagoguery. It would have been informative to hear his views on the data cited by you, whether he agreed with your conlusions and if not, why not.
Thank you for this report. It should be required reading or viewing for every America. You did a great job of clearly explaining what the problem is.
He just fed you a load of left wing hoo haw from an organization of pro public sector European quasi socialists - and you thank him?
Really?
Another shining example of intellectual discourse from the far right. I'm guessing your debate team never garnered a single point during a rebuttal: "dang nabbit commie wishy washy ding dong bell socialist nazi nazi flim flam, I say."
Folks don't believe in all this propaganda by paid off so called experts on Economy, Foreign affairs blah blah blah. We all know the truth of the matter is USA is put on sale be Corporations backed by congress. Fundamental things that has made the people of this country and their future hopeless are.
1. Outsourcing
2. Import of Chinese goods with out tariff.
3. Unregulated Wallstreet that has swindled peoples life savings.
4. Politicians waging wars so their corporations can get rich and make them and their family members rich.
5. Misuse of SS funds.
the rich 10% (richly employed and the super riches) plus people on various government subsidies do not share your/our views...
Well said, Mr. Kumar.
Sudhir,
I agree. Add the greed of OPEC and various oil companies as yet another problem in US/World recovery.
This is absolutely correct. Zakaria is proposing solutions that may be well intentioned and highly theoretical but not related to the main problems in the USA – greedy corporations, politicians on both sides who will not compromise for the good of the country and the influence of china.
Zakaria saying something generic like "we need to invest more in science education or research" will not solve the problem even in the next 5 years – it could take 2-3 decades and the situation may be completely different then. If USA needs bright engineers/researchers, it can always find them from elsewhere in the world (there are smart people every where in the world – not just the US – and we need to be the magnet for the smart talent). The real issue cause for the decline is corporate greed and uncompromising politicians and the nexus between them. No amount of growth in science or technology is going to solve it.
Yes Mike we have 65,000 H1B visas available for it every year. We do get 10% of it used by innovators, rest misused for cheap and indentured labor. So all this innovation STEM is all political slogans like the 9-9-9 plan. We can do it by Obama. Just like Clinton said in the 90s. You will all have technology (IT) jobs.
Very well said !!!!! How can anyone argue with Sudhir's statment ???
tnx, M. Kumar, 4 that statement.
History does NOT repeat itself.
Very nice, Fareed. How about not quoting a lot of cooked stats from a left leaning organization like the Organization for Economic Cooperation and Development?
It seems all Fareed's screeds turn into one-sided tomes predicated to the proliferation of infrastructure and the justification of higher tax rates to support the public sector unions who will ultimately have the privilege of building that so called infrastructure at the expense of the majority of people who earn their living in the private sector. And all while Atlas shrugs.
Nice try, Fareed. Liberalism: fail!
Oh, you actually read Atlas Shrugged? Oh really? I doubt it.
Very funny @SunBun. It's kind of a "Godwin's Law" that the "Randians" are gonna come out of the woodwork during any discussion of economics, isn't it?
The "I got mine (however I got it) and the Devil (the rest of you) take the hindmost."
It's called "Social Darwinism."
Could you please cite actual studies proving your perspective, rather than writing off one of several sources as biased before launching into a libertarian fantasy land? Saying "Atlas shrugged" repeatedly doesn't make you insightful by default.
While I think this is a decent article, I feel that the underlying question is incorrect. Mr Zakaria states: "So the question we should all ask is: What would make this economy grow? What has stopped it from growing much over the last few years – indeed over much of the last decade?" I feel that a better questions to ask are 1) What should growth look like? and 2) What kind of growth can we create that is truly regenerative for the country rather than the degenerative growth spirals we have been subjected to by our country's business elite who share a small scale Cartesian view of growth rather than an interconnected view economics and regenerative systemic view of growth. We need to change the discussion.
interconnected view OF economics and A regenerative systemic view of growth. is what I meant to type.
Fareed should run for President. If he was not born here ... he should be hired as the President's economic advisor. Of all the pundits who have taken all the positions in this debate, Zakaria is, by far, the most "big picture" thinker I have ever heard. Rather than basing his opinions on the next quarter, the next year or the next election ... he talks about what is best for us over our lifetimes ... and our kids lifetimes. We need more Americans to share this type of concern.
He already does advise the president... he said so himself... partly why the country has gone to hell, partly why it's more proof that CNN is so far from biased it's unbelievable
mainstream media=lies
The tax study showing the US 28th in the world on the GPS television program this morning suggests several questions. If as it appeared the study compared the US income tax with national levies in the other countries, it seems to ignore the fact that many of those countries tax for purposes that in the US are addressed by state and local government, and special district, taxes. I think the case can probably be made by Zakaria without comparing apples to oranges.
I love how the only answer Democrats seem to come up with is raise taxes. So, if the economy takes a turn for the worse, raising taxes fixes everything??? Mister Arab Liberal, government spending and social programs, like Fannie and Freddie being forced to give out high risk loans, are the cause of our problems now, not low taxes. How about this: keep taxes the same or lower them again and quit spending our money on things like bailouts, social programs, etc... You liberals are all the same. The more money you take from us, the more power you have over us. We have figured you out and you will see in the next election!
Mister smart man, He is not anywhere from Arabia. Yes he is a Muslim, born in India. If you can't see that difference, you shouldn't be commenting here. Go comment on Glen Beck show maybe ?
I stopped reading the rest of your 'full of facts' comments after this Arab liberal thingy.
How were Fannie and Freddie "forced" to give out high-risk loans?
How will further cutting governmental revenue reduce the deficit?
I get the feeling a lot of your opinions sounded a lot better when Rush Limbaugh said them.
One cannot deny our move from exporting to importing has effected the quality of our jobs. That this money was replaced by inflated housing values, created by 1990's congress regulations aiding under secured loans. All economic forcast since then have included housing construction and not always exports and imports. That bursting bubble, no matter the cause, crashed this economy and our recovery will be after housing prices are again aligned with wages. No in my lifetime.
How much simpler could it be? If businesses want people to buy more, businesses should start hiring to meet the demand. If businesses want to grow, businesses should start investing in growth. Consumers are at the end of their resources - they have nothing with which to make the first move.
The dumbing down of America continues. The 1% continues to destory our country from withing, making people more ignorant and succeptable to propaganda and lies. All Republicans who want to get rid of the EPA should be forced to drink water with feces in it and eat fish laden with mercury.
me likey ur statement
The real burden of US is the corporations who are exporting US jobs to China and India. How can people buy goods if they don't have the money to pay for them? Zakaria, you should write some articles against how to stop sending jobs to China and India. I guess you cannot do this because people who paying you actually are the ones sending jobs overseas. You should retire from this dirty business. There is simple rule for economics. Jobs == Good Economy
Harry you are right all we hear from are the Pimps of Corporations, talking about economy and politics. Check out the Real news network for facts.
The United States needs to focus more on the work creators, the employees of this nation, the middle class. American was built on the backs of a hard working middle class. All the fuss has been about the job creators who as it turns out are job deflator's. They have done nothing about hiring but instead have focused on taking away benefits from employees. With all that has gone on lately it appears that the American working class has gone backwards in its standard of living. American businesses have taken on an adversarial relationship with its employees. Business seems to be saying shut up and sit down employee, if you don't like it here go somewhere else. Is this any way to get the job done. You need us we need you , you provide jobs we provide the labor.Hell the American worker has even lost the right to speak out about working conditions in some states like Wisconsin. Remember we work for you we work with you but we are not owned by you , hopefully that part of our past will never surface again. Progress is made through cooperation not subjugation.
Hey Mr. Zakaria, How about tipping the help next time you go on vacation. Great example right in front of your daughter. You know how it works in the U.S. Maybe you still think your in your home county where there is still a cast system.
Fareed:
I like your comments about WWII. It’s called taxes at work. Everyone was employed and there was a shortage of personal. And wages skyrocketed. It is called Keynesian at work. There is no reason it cannot be duplicated. I have commenting like this for the past four years, have you been reading them?
Fareed, thank you for this FACT-BASED analysis of the challenges faced by the American economy. This is what America should be addressing and working to resolve, not the debate-theater nonsense offered by republicans, who've NEVER had a clue about how to make the economy work and who continue to offer advice and prescriptions that are proven failures.
Lack of Gov't regulation caused this economic crisis. And when Obama tries to appoint someone to oversee wallstreet, it's outvoted in the republican majority senate. unbelievable. God forbid we take away the right of multi-billion dollar libertarian CEO's to make 300 times more than their employees and avoid heavy taxation. Wouldn't want to ruin the american dream of the trust fund babies. Wouldn't want to rain on the Koch brothers parade. Bonuses for everyone! yay!
Excellent piece. As usual, Mr. Zakaria bases his arguments on facts and sound logic, a far cry from the screeching right-wing loonies posting here. Mr. Obama has done an outstanding job with the cards he was dealt by his predecessor, probably one of the bottom five in any non-partisan presidential ranking. Obama has repeatedly stated his goal of rebuilding the infrastructure and improving education in America. He has, of course, been undermined at every turn by conservatives in Congress and elsewhere. After he wins in 2012, a slam dunk given the pathetic excuse for candidates being put forward by Republicans, he will continue to pursue his programs in education, infrastructure, renewable energy, scientific research, entrepreneurship, and so many other areas crucial to our full recovery from the Conservative Bush Nightmare.
College grads can not find jobs. Unfair trade with China is the real issue.
I agree but have already been doing my part, investing in municipal bonds for over 35 years. My money builds the roads, builds the airports, builds the hospitals- builds the infrastructure that needs improving. So, I track what the states are doing. States are spending more $. But the states are not spending the dollars correctly. As the states cut back on state employees, (to make the payroll look less) they increase their expenditures with independent contractors paying them more than the former state employee for doing the same job. If the states were better at managing the money I lend to them (through buying bonds) they could built more infrastructure. How about that?
Fareed gets it right again. Please read this article more than once....it's important.
Why would anyone want to be an engineer knowing that past the age of 50 they are liable to be replaced by an 30 year old H-1 visa holder from China or India?
Fareed, I couldn't agree more. We are all hurdling towards a world that does not need jobs because of automation and rapidly developing infrastructure. The US is in the unenviable position of its elite having gotten there first. They used to be industrialists, now they just fund apps for iPhones. Our best and brightest have no incentive to point their energies towards solving real economic problems – where the real employment will come from! I just wrote about it in the post below and in my new book, Econovation.
http://www.ideafaktory.com/2011/11/put-down-angry-bird-americas-innovation.html
How do we grow the economy? Its very simple. First you kick all Republican and Tea Party extremists out of the US government to start with and with that alone, growth would flourish. The last thing you need is a bunch of conniving self righteous greedy prejudice rightwing politicians slashing programs geared towards re-growing the American economy and putting Americans back to work. And the last time I checked, we suffered the worst economic crisis in American since the Great Depression under the Republican failed and misguided economic policies and ineffective leadership. Therefore, if we are to experience significant economic growth, we need to begin the process of voting all Republican and Tea Party extremists out of our Government.
Fareed, I couldn't agree more. We are all hurdling towards a world that does not need jobs because of automation and rapidly developing infrastructure. The US is in the unenviable position of its elite having gotten there first. They used to be industrialists, now they just fund apps for iPhones. Our best and brightest have no incentive to point their energies towards solving real economic problems – where the real employment will come from! I just wrote about it in the post below and in my new book, Econovation.
http://www.ideafaktory.com/2011/11/put-down-angry-bird-americas-innovation.html
sorry for the double post...browser error.
Liberals would rather invest in Special Education for the lazy, ebonics, disruptive, low achievers in this country, rather than investing in Advanced Placement classes for the Engineers, Science, and Medical careers.
You clearly don't know anything about educational spending in America. Of course, your point is, "why spend money on all these colored students when there are white students we could be spending on instead."
You should just shut up, you sound like a total buffoon
Then why did all the research funding for colleges and universities dry up during the GW Bush years?
Unions have bankrupted companies in the US like GM, Chrysler, US Postal Service, and Lowered Standards in Teaching with the Teachers Unions. Non Union companies like BMW, KIA, and Toyota are able to Manufacture profitly in the US WITHOUT UNIONS. BREAK UP UNIONS NOW.
There would be no unions without greedy capitalists, so should we break up capitalism too?
Capitalism CREATES JOBS for over 70% of the US Population. UNIONS are ILLEGAL MONOPOLIES that protect the Lazy, Uneducated, Deadwood, and Nonproductive employees.
I worry about your educational success. Profitly?
Destroy the only voice the working man has in the workplace. Without Unions you create socialism or communism you have backed the employee into a corner how does he get the respect he needs. where did this stupid ignorant anti union sentiment come from, and people like you continue to spout this drivel. I gather you have never had to work where the employee is subject to harassment from the management . We hear we don't need unions we have plenty of laws to protect the employee, ask the female employees of Walmart how it works when you attempt to speak out for yourself. The courts shot their complaints down as if they had no merit good luck with one person against the system especially with the conservative bent which exists in the courts at the moment.Unions are corrupt we hear so you would toss them aside rather than fix them, unions have ruined businesses with their demands, really are you sure that business suffers from union activities. Not the case rather business see's unions as interfering with their ability to have their cake and eat it too. Get rid of unions and this country will spiral into a third class nation where business uses employees rather than works with them. Its all the rage at the moment Public employee unions have ridiculous pensions and are gouging the taxpayer. Not so the benefits the public service employees currently have were at one time available to a large class of Americans. However the American worker has slowly been sold down the river by the powers to be. Unions are the last stand against an abusive workplace one of the last places in America where democracy does not exist is in the workplace. Unionize or Socialize
Excellent article, solid facts.....Americans need to start graduating more in the fields of Engineering and Science if we're going to employ Americans back here at home and re-invest in our country......Too bad it seems all we hear is arguing like children from our politicians and the extremists in our Political parties who are unable to think for the future or discuss matters like adults.
I wonder how many Scientists, Nurses, and Doctors participated in the Occupy Wall Street movement? Probably, none. The Liberal Left are probably Liberal Arts majors that can't find a job because they are TOO LAZY to get a Science, Technology, or Medical degree. The Liberal Left NEEDS to blame Government for not getting a Science or medical degree, while in reality, if they Turned OFF the TV and Got off their Obese rear, they Don't Need Government for a Science Degree.
How can you make such a blanket generalized statement like that?? Lots of my friends in IT with engineering degrees have been laid off thru no fault of their own.......if you look into the OWS you'll see people from everywhere, every age group, every profession, Dem/Repub/Independent.......stop your hating
I'm a liberal engineer, fully employed, and I think the world would be a much better place without so many conservative political-"science" majors.
Liberal7Liar, I saw your post from yesterday and had to respond. I am a scientist (microbiology and chemistry) and I support OWS. I also support the majority of intelligent comments I have read here. We need more constructive discussion on how to fix the political and economic errors of the last 30-40 years, not your inaccurate babble.
FYI, I am fully employed, too.
I have to say I spoke too soon. If you continue to read on, the intelligent dialogue disappears at an alarming rate.
The true burden on the U.S. economy is the excessive and unnecessary military spending which keeps going up year after year. It's too bad that people don't have enough sense to realize this simple fact. We need a President and a Congress who will stand up to the MIC which we sorely lack right now.
Political divergence is the real enemy & economic challenge of American democracy & people of America. I am afraid it may not hurt the security & safety with ultimate threat to very existence of America.
The Reason that Spending by the US Government in Science, Technology, and Research is decreasing, is because the LIBERALS are WASTING our taxdollars on Food Stamps, Welfare, Medicaid, and other social programs. There are MORE People in POVERTY under OBAMA in the history of the US.
This article only paints pieces of the larger picture and not nearly enough for those willing to be objective enough. The idea that individuals and companies need to be freed, yet more, to invest their own capital to grow business can easily be squashed or counter-acted by liberal policies, such as the support of labor unions and heavy regulations on factory construction, as well as infrastructure expansion (ironically) . This would thereby render infrastructure and human capital investment useless, given the effective increase of cost to do business here in the US. I will point to Boeing's recent labor case with the NLRB. Basically, Boeing wanted to expand operations and cut the costs of doing so; and, by the way, wanted to give another state (South Carolina), because of good incentives and a notoriously low tax rate, the chance at some fairly reasonable skilled labor jobs; 8000 jobs, as a matter of fact. Through some kind of a miracle, the NLRB dropped its collective bargaining case against Boeing, and Boeing was then free to open a new factory in South Carolina, giving a new area the chance to grow (remember you pointed out growth) and easily justify the need for infrastructure improvements. Now, there are several reasons why this validates more conservative economic, as well as, conservative labor policies; but if one wishes to focus solely on infrastructure spending and related job creation (which can pale in comparison to the outright job creation by increased investment in even a single company): It's not that conservatives are against infrastructure spending and growth as a way to help the economy, it' just that they just wish to have infrastructure spending sitting as a "wait and see" extension of job-creating investments in companies, depending on what regulations and labor strangle holds can be cleared to let private sector companies, such as Boeing, choose as they may to control costs and operate a profitable business! Do I need to go into any more examples of where organized labor is effectively destroying our economy? Okay, a truck plant in Virginia recently told the UAW that it would accept a proposal for labor rate increases, but would be forced to (can anyone guess?) – outsource some jobs to Mexico to offset the cost increase as well as local tax increases. Please explain to me how infrastructure spending, wage rate increases, or education investment help this situation. If there is a way, then I am all ears.
If you want to argue about regulations, then I will tell you that as an experienced production manager, expanded production requirements can easily be strangled by the delays and red tape caused by factory construction regulations, only to be saved by outsourcing (depending on the industry and type of product). Supply and demand will always drive a business, but if the supply cannot be reached to deliver the demand, then a company will be forced to look elsewhere (as in, "offshore"), that is if regulations and government red tape keep a new factory from being constructed and opened quickly enough. The point here is that, yes, many regulations have probably not changed in the last 1-2 years decades (or, at least let's assume so), but maybe that is just now being cited as a larger contributing problem, as companies have been forced more and more often to look offshore. There are different bottlenecks that crop up as problems, depending on the current economic environment. At times, infrastructure may be hinderance (to be objective) but one could then argue that infrastructure construction approvals take too long, as well.
I would like to know which countries have the greatest infrastructure growth at present. Something tells me that China is far up the list, due to its relative lack of regulations and heavy private investment.
All you have done is quote statistics, without any real arguments or original thoughts put forth. Yes, I would agree that spending in these areas might generator somewhat of an economic growth, but wasn't infrastructure spending included in the first stimulus package under Obama? If that worked so well, then why didn't Obama attempt more similar packages or try and promote it more heavily? He had two years to pursue this all with a Democratic Congress. Oh, wait, he blew plenty of money on another huge government spending spree – new health care legislation.
As an independent who voted for Obama in 2008, I can see that Obama and the Democrat's policies are not working, and so I cannot not ignore what the right is saying this time around.
You wanna vote Repub? Kiss the environment and worker's rights goodbye......sorry, but Obama 2012
Do you want to see more jobs outsourced in 2012, effectively making workers' rights a non-issue? Vote for Obama again in 2012.
so you wanna go back to the policies that got us here in the 1st place?? Makes no sense........and you think Repubs aren't going to continue policies of outsourcing? Obama's actually trying to give companies tax breaks for hiring Americans.......what do the Repubs have? nothing.
Yes, there are certainly some tax incentives for hiring Americans, and I will not deny this. There are even federal grants going to other companies, but in most all of these instances, the federal government is picking the "winners" and "losers".
Also, between the NAFTA agreement Clinton signed into law, China's false currency valuation, and organized labor, any tax benefit is easily outweighed by these other policies and situations, including regulations and "some" environmental ones. Obama did try and convince China over the trade inequities, but China is not the only problem, in case Obama didn't notice. Part of the problem is that companies cannot compete, globally, without the lack of restrictions in China. I am not even saying that China's lack of regulations and low wages is correct (far from it) but Obama has done little to get companies more interested in investing in human capital over here. I see every day: projects that could be handled domestically are being outsourced because of costs. Obama failed to correct this, so who will? Saying 'it won't be overnight' is stating the obvious but Obama has failed at offering a longterm solution. I try to see these things as objectively as possible and I just do not see how labor unions can possibly be good in this economy; nor do I see how regulations can benefit manufacturing companies, all the while jobs continue to go overseas.
Shifting slightly: What about the health care law? Isn't that supposed to help companies, as well as their employees? Where I work, our premiums are increasing in 2012, while our deductibles are going up as well. How has the health care legislation helping the economy in this sense? Obama was foolish to push such an expensive bill through so early in his term when the economy was basically at rock bottom. It made no sense and I could not understand why jobs and the deficit were not coming first as issues then, when it was even more acutely obvious that something needed to be done. Obama was simply going in a non-thinking direction, carrying the liberal torch toward socialized medicine. On the other hand, Bush pushed two wars that were also needless, to give the left credit. However, just because Bush failed (but, in any event, was likely handed the fallout from Clinton's bubble of a dot com economy which busted in mid 2001), does not mean conservative policies never work. Bush had 9-11 to answer, while Iraq was questionable.
The policies that got us here (worldwide economic depression) are the result of liberal policy, period. You folks want to blame Bush's tax cuts for everything, but fail to admit a single country's tax scheme has NEVER affected the world as you claim. The way the problem became a worldwide one was because of mortgage backed securities that were built by the government, pushed by liberals like Frank and Dodd, and eventual Obama economic advisor Jim johnson and sent out into the wide wide world. These dividends did not pan out, because the people who the gov't forced the banks to lend to could not carry the burden so people all around the world started to lose money because the dividends that stopped being paid out because people stopped paying their mortgage halted economic movement.
So the banks lent their money, you people stopped paying your mortgages and now you complain that the gov't is not doing enough by raising taxes on other people's money to help you. It's a vertiginous cycle and most of it is a pathetic liberal ruse to gain voters and long-term sycophants for their cause.
Its quite simple. Deregulation led to bad business which led to economic recession. Alan Greenspan and all his infinite knowledge allowed for banks to take on investment roles(during the Bush Admin mostly). They started to take on more clients, more money and ultimately more responsibility. Hence the huge bubble in subprime lending which was almost non-existent prior to 2000. Lobbyist of the banks pursued hard for increasing leverage to numbers that are unsustainable. There was no way a bank could pay up when margin call time came in 07. Including Synthetic CDOs which allowed for betting on how well a stock did from day to day. Synthetic CDOs were just that SYNTHETIC!! Fake money!! How can you bet on something maybe ten or twenty times when there is only one amount?? i.e. a 38 million dollar MBS(mortgage backed security) could be bought but when bet on via SCDOs it uped the cost to $200+ million when margin call came. Also MBSs were so tranched that investors didnt know what they were buying but they knew that Moodys or S&P stamped it triple-A giving it a "gurantee" to perform. WRONG!! Ratings companies were literally over involved with there stock prices which pushed them to rate securities incorrectly so that they wouldnt lose clients hence lose business. This cost investors HUGE in the end and the American people. Funny things is the American govt knew about this but swept most of it under the rug.
Overall i would like to say GREED won out!! I believe someone in here referenced Jim Johnson being a head for Obama but he did work as the head of Fannie Mae in the 90s. Hes addicted to money. A salesman will sell to anyone who is willing to listen and pay. So no this is not any administrations fault more the fault of American businesses lack of intelligence and involvement in the products they were selling. They became reckless and hungry. American business in my opinion is unable to regulate itself and it shows evidently throughout history. How many times has the airline business's been bailed out? Automobile industry? Wall street?(TARP 08, thx Henry Paulson) So the real burden on the American Economy is the American business and its unwillingness to do fair business in pursuit of the ALL MIGHTY DOLLAR.
"...supply cannot be reached to deliver the demand..." - good point, but can the demand be reached to deliver the finished product? Your arguments are strong and well-reasoned but I can't help but wonder if there isn't a "chicken-and-egg" conundrum here. Namely: do we need good infrastructure in place before investment in new factories is going to happen, or (because we can't afford the infrastructure), do we wait until those factories are built - thereby generating taxes - before we invest in expensive infrastructure?
Best case in point: roads. We may not need new roads but look at the terrible shape that existing ones are in. I live in Chicago and you take your life in your hands hitting some of our potholes. Whether suppliers to the factory, or delivery from the factory, truck drivers bear the brunt of this disastrous road situation. Speeds have to be limited, delivery times compromised, gas is wasted, breakdowns are more frequent, tires wear out faster, etc.
Wouldn't it be more conducive to a company thinking of building a new factory in South Carolina to know that the roads servicing the factory were in tip-top shape?
But I know that road work is expensive. Very expensive. And Carolinians have to pay for it. So do we just promise the factory owner that the spiffy roads are coming if only he will please build the factory now?
I don’t know. I really don’t know what the answer is.
EM, thanks for your pleasant commentary – that's very refreshing. I agree, there is somewhat of a chicken and egg problem when it comes to infrastructure and a new factory site. I was going to mention this, but did not get around to it. I do not totally disagree with what all the Dems are looking at, as I believe that it is in each party's own self-interest to offer differing, often helpfully differing, viewpoints.
As for deregulation – we need to be careful there. There are some regulations that are absolutely necessary and others that may be, as well, but are surrounded by so much red tape that it makes it difficult for companies to navigate.
I am not totally decided but I will keep researching while reading about other perspectives.
Above all, though, I wish that someone would turn around the outsourcing problem. Blogs such as this one hit on some facts, but they are usually simply statistics pointing at symptoms. What I am interested in are ideas for real solutions.....
Although your points are valid, your use of engineering graduation statistics is not as beneficial as you might believe. You would have been better off listing statistics on other sciences, such as biology, chemistry, physics, psychology, sociology, etc... Although anecdotal, I can say that many social, biological, and medical graduate programs are flooded with students.
What America needs to do is to dismantle The Federal Reserve. This organisation controls the money supply and is the most fraudulent company on earth. You only need to look at the people who own and run it. Money and supply and control should be with the state and not a bunch of Jews.
Educated, high salaried folks account for the biggest generators of debt. They have bigger lines of credit. So eager for the American dream, they expense it. Credit card companies are now incentivising the us of credit cards. There is no economic recovery if you are in debt. I'ts foolish to even talk about it. At best (from close observation across several industries) American workers struggle to put in 3 hours of work a day. They spend the other 5 reading/blogging, FB, YT and Tweeting while their jobs leave the country. Those who worked hard to build this nation are dead and in the graves. There will be no economic recovery in this generation. There's no perspective of hard work. You cannot just gain this kind of perspective. Suffering and testing of character must take place 1st. This generation is far too spoiled.
There are too many ACORN and Occupy Wall Streeet Liberals that would rather protest and whine, instead of working hard, studying, turning off the tv, and getting a Science, Medical, or Technology Degree.
@Liberal7Liar: You're right. I turn on the tube to watch one AMC movie and I'm bombarded with credit card commercials and all sorts of things I can buy with those credit cards. TV replaces thoughts. If my thoughts are replaced, that little voice in my head telling me to get off my but and get some work done– is drowned out. Once that voice is quiesced (the source of motivation is gone), forget it!
Well-said! We have people standing labor unions with their hands held out who want to bleed companies, as well as their fellow man and government dry, while they do menial jobs for far too high a salary. It is insanity and our generation should choose to leave government out of the role of deciding exactly how our economy runs, down to picking the losers and winners where innovation is concerned. This the least we can do, and maybe listen to people like Gingrich who are not afraid to talk about motivating a good ethic in America.
@Chris: Thanks. Totally agree with you, I'm liking Gingrich a lot too. I just hope most of the voters are not the types we are referring too. Most folks I know are in debt and allergic to hard work and good ethics.
The LIBERAL Crying Nonsense News (CNN) is again Blocking thought provoking posts from Conservatives. Too many LIBERAL WHINERS like Begala, Brazille, Zakaria, Carville, and Martin publish LIBERAL propaganda on CNN.
Yep, it's sad that they chose to hide the Boeing labor case ruling article as quickly as possible.
There are many problems but the main one that must be solved first is a complete lack of confidence is our brilliant leader. People with money to invest will not do so until he is gone, period If everyone who voted for Bush or Obama would sit out the next few elections we could have a chance to patch the holes in the sinking boat. Otherwise, goodbye America, goodbye jobs, goodbye happiness. Stop thinking emotionally people, wake up and think rationally, our future depends on it. You voted for Obams for emotional irrational reasons and now you have an emotional irrational economy. What did you really expect picking someone with 0 useful experience? Would you like an inexperienced doctor or pilot? I am seriously worried about this country's ability to think! Do all of us a favor and sit out the next few elections if you care about your country.
Black unemployment is over 16%, the highest in 27 years. Are you Enjoying the CHANGE for the WORST that you voted for. Enjoy the consequences of your Obama VOTE, Higher Unemployment.
Dear chicken little. The number one export in the world economy is religion. The number one religion in the world is American pop culture. This religion is spoken in English, also the number one spoken language of the world. It was tough to create this world. Current numbers showing more visual arts grads than engineers is a good thing for America because in the American world no one is better than being American that us Americans. As long as we dominate the culture of the world." ALL YOUR ENGINEERS BELONG TO US".
I would also like you prefer to live in a world of engineers, it makes more since. But I also know not to pee or spit in the wind.
Mandarin chinese is the most spoken language in the world. English is second.
What I find surprising is that our industrial giants do not partake sufficiently in the education at the high school and college level. Every stockholder should be interested in training young people to advance the fortunes of the company they have invested in. Where are the well paid internships and training programs so students do not have to amass these large scholarship debts. If STEM is the direction we need to go in, somebody has to fund it. Scholarships may not go to the STEM students as they are likely to have a lower GPA than folks taking a 'basket weaving curriculum'. The may also have less time for part time jobs since their course load requires substantially more work than other endeavors.
@Liberal7Liar: You're right. I turn on the tube to watch one AMC movie and I'm bombarded with credit card commercials and all sorts of things I can buy with those credit cards. TV replaces thoughts. If my thoughts are replaced, that little voice in my head telling me to get off my but and get some work done– is drowned out. Once that voice is quiesced (the source of motivation is gone), forget it.
BABY BOOMERS SHOULD BE ASHAMED. My post from below...This generation is spoiled? What generation are we talking about. The baby boomer generation, i.e. the generation in power, currently making the decisions (private sector and public) that are ruining our country. Or are we talking about Gen Y, the generation that is currently entering a workforce RUINED by the baby boomer generations love of debt and finance? Please tell me we are not talking about lazy gen y. The baby boomer generation came of age in post war america and was the first generation of Americans to have it easy. Baby boomers have ruined this country with their love of the financial sector, debt, flipping houses and by voting into office politicians who are blatantly corrupt. Moreover, they will be the generation that bankrupts social security, medicare and a host of other welfare programs that they refuse to reform. Blame the baby boomers, not their children who have yet to have the opportunity to make their mark on the world. The 6000k+ dead from Iraq and Afghanistan are not boomers but their children. Again blame the boomers they are ruining this country.
Both. Research shirtsleeves-to-shirtsleeves AND the rise and fall of the great nations in history. It's mostly inevitable. The economy has not affected me, and to be honest, I've taken in 6 figures that past 2 years. I was raised in the most impoverished place in America. I put my faith in God, and haven't looked back since.
America's decline points directly to the decision to disregard a manufacturing economy and shift it to a financial/investment economy. We don't make anything so no jobs are created and no taxes are collected. Money is controlled by huge investment banks that make lots of money but pay a smaller portion in taxes. Fewer people are employed making the tax proposition even worse. It does not take a rocket scientist to figure it out. The lobbyists controlling the legislation coming out of Congress is what is preventing this country from righting itself. Look at the vast improvement in the US auto industry. There is a prime example of what the American economy could produce if wasn't hamstrung through trying to protect the rich at the expense of everything else.
I LOVE MY DOG ...BUT
It just hit me!!
My dog sleeps about 20 hours a day. He has his food prepared for him. His meals are provided at no cost to him. He visits the Dr. once a year for his checkup, and again during the year, if any medical needs arise. For this he pays nothing, and nothing is required of him.
He lives in a nice neighborhood in a house that is much larger than he needs, but he is not required to do any upkeep. If he makes a mess, someone else cleans it up. He has his choice of luxurious places to sleep. He receives these accommodations absolutely free.
He is living like a king, and has absolutely no expenses whatsoever. All of his costs are picked up by others who earn a living. I was just thinking about all this, and suddenly it hit me like a brick in the head…
My dog is a Democrat!
Your dog is probably funnier than you are.
I am really tired of the nonsense written about the U.S. economy. FYI , Fareed, the U.S. economy was FLOODED with people with B.S., M.S. and even PhD s in science since the 80s. It is only in D.C. , people like bill Clinton, that had no clue what the job market was for engineers. The people who support the globalist nonsense say that we do not have skilled people so they can keep open borders, visa programs to lower wages and importation of slave labor goods that are KILLING AMERICAN JOBS. We must borrow money from the Chinese to keep our endless wars going that are bankrupting us . Just imagine all that money saved from endless wars invested in the U.S. !
Economic growth is good for the economy, though for growth we generally need higher production and consumption. With the world's population increasing, how long can economic growth be sustained before raw materials and energy become scarce? The faster the Chinese economy disseminates and resources become less available, the sooner we will be faced with challenges that will far outweigh economic growth.
"[The Republican explanation is] a compelling picture, but the data simply do not support it."
Wow. There's a shocker. Modern Republicans think facts are optional, and if used at all should be limited to one or two isolated statistics around which they can craft a narrative that's consistent with their ideology, or simply fabricated to make their beliefs sound justified.
Apparently Zach Baby missed the point concerning regulation. No, Bush and Obama didn't increase the regulations much but the REAL POINT is there are still too may regulations regardless of the current crushing numbers. Remember that even a small increase is still an increase. Talk to business leaders and small business owners the problem is still over regulation. A university economist is NO match for the words of business owners in all cases.
Fareed Zakaria GPS (Government Propaganda Shill)
Overall, I agree with Fareed: investment drives returns. However, I'll point out that the government has, in general, not invested well for decades:
1) Investment in basic research and technologies is an outstanding place for government; investment in commercialization of technologies is not. In ARPANet is the former; Solyndra is the latter.
2) Investment in education is clearly a good thing. However, while other governments specifically target science, engineering, and other majors that lead to future productivity, our students have run up a $T (yes, trillion) of government-insured student debt on majors that the market clearly does not value. In my town, we have Masters in Education who can't teach, custodians with college degrees, and more. And to show I'm nonpartisan, I will say that NCLB has been a complete disaster, drawing off investment in top students and their future productivity (and tax revenue). We are getting what we paid for.
3) The government's budget is dominated by expenses, not investments, because people - voters - get instant gratification from expense items (like "stimulus"). We the people thus are biased toward the wrong decisions and a lack of leadership = pandering to get re-elected has gotten us where we are. One thing about the investment during the wars: people viewed it as a shared SACRIFICE for a better world to come. In today's world, it's "who has brought the most dollars back to his district.."
4) Proper investment in infrastructure and education has been declining for decades and it will take decades to fix. Agreed. But that does not fix the immediate problem, which is that businesses don't invest and don't hire people when there is uncertainty. It's a lot less about tax rates than UNCERTAINTY in tax rates. It's a lot less about hiring a union guy than about UNCERTAINTY in if there will be a government mandate to hold onto him (unless you want to be demonized as an evil "money person.") It's not about lending money; rather it's about if the government is somehow going to change the rules of bankruptcy or foreclosure. THE most hostile-to-business thing that government can do is neither taxes nor regulation; it is to create uncertainty. In creating uncertainty, probably mostly with good intentions, this Administration has dug its own hole in regards to getting the economy going again. The only solution short term, then, is for this Administration (or the next) to take every step possible to keep to one set of rules.
#3 "Shared Sacrifice for a better world outcome" Are you kidding me? The only people who have sacrificed are the kids that went over there and fought. The rest of us got tax cuts.
Fareed, You only forgot one thing when you state that economies perform the best when the government taxes as a 18% rate. 'yes, federal income tax is at 13-14% of GDP but you FORGOT the 15.3% taken off the top for Social Security and Medicare that is spent by the US government on top of the 13-14% Federal Taxes. Please get your facts correct. Thanks.
You get yours straight. The SS system is a contract with the American people and it was made in one of the most terrible times in our country brought on by republican fostered greed then. This gave hope to so many and a reason to fight on under what seemed insurmountable odds. Where were you during the great depression?
The real burden on the U.S. economy ,is deadbeat obama and his super corrupt administration. loser obama has proven to be a huge failure. obama and his corrupt administration need to be removed ,It has been over two years now and loser obama hasn't done anything to help this economy,as a matter of fact, obama and this corrupt administration have done everything to hinder it with his idiotic,corrupt ,socialist agenda that has failed and the past two years have proven that .
Brilliant. But, you're obviously holding back. Please tell us: do you think there's corruption in the Obama administration?
Investment includes business investment in equipment for example and does not include exchanges of existing assets. Investment in GDP does not mean purchases of financial products. Buying financial products is classed as saving, as opposed to investment. This avoids double-counting: if one buys shares in a company, and the company uses the money received to buy plant, equipment, etc., the amount will be counted toward GDP when the company spends the money on those things. Buying bonds or stocks is a swapping of deeds, a transfer of claims on future production, not directly an expenditure on products.
So, when people buy stocks, they are not necessarily investing, as they might believe. Companies invest when they purchase plant or equipment (job creation) and they are not legally required to make any such investment and just hold on the money themselves.
Failure of big businesses to invest in American growth is merely a function of the much worshiped capitalism, which dictates that investment be made where growth will occur, which in the globalized world our great leaders have given us is China and India. The investors are doing nothing wrong, just following the guidelines of capitalism. Instead of complaining, why don't you re-locate to China or India?
I probably could relocate to China if I wanted. Though I'm conservative in every category except for the fact that (by choice) I have no children, so I guess that by your measure I am a stupid liberal and I should move to China and live among a billion other people. I generally like other people, though not that much.
You could have summed it up in two words: " The Wars".
I'm glad after 3 years, Obama is finally focusing on the economy.
I searched through American history during times of depression you will find one common relationship bar none, that one common thread is military actions. I was skeptical, but it is a trend that can be traced back to the US civil war. Black and white doesn't lie. We should also remember the fact that governments throughout history have a life span between 200 and 300 years before they fail. These are historical facts, we should have eyes at the back of our heads because the time is coming, and it is always a surprise.
... so, how is the INTEREST that we pay on our debt not a burden? how is that "fee" not a real burden? Fareed needs to study accounting...
Agreed that investment is required and overdue. But you can't invest if you don't have money to invest. We have overwhelming debt. Where is the investment money going to come from?
@ Oh Really: You are right this is a lot of leftest socialist BS that the Sheeple feed on! It started years ago, but Barack Hussein Obama with his Puppet Master 's working his strings took it to the max, expedited the entire process of down grading America, destroying America from within while she was wounded! The NWO's plan for bringing America to her knees and installing their EVIL EMPIRE world wide is pretty mush a done deal. Just the end results to a long planned New World Order, and the infiltration Radical Islam. Well Sheeple lets see how you handle the beginning of the END starting February 2012 ! FUBAR!
I'm willing to be that if you factored out the costs related to the wars in Iraq and Afghanistan that the actual spend by the government has increased year over year. If we're not investing in infrastructure, where is the spending going? Could it be that the real burden in this country is now our public sector costs? We have a giant and not well characterized debt in the form of pensions/accrued overtime, etc at all levels of government that will continue to erode more and more of the available capital that could be spent on infrastructure. I'm all for a fair wage for fair work, but when salaries and benefits are determined by people who need a vote to get elected, this is where we get. If you get bored, google what health care plans exist for the postal service and compare it to your own. It's ridiculous and the reason that the health care bill eliminated the tax on "gold plated" plans.Pensions/benefits brought down the manufacturing sector and now it is taking down the economy. Zakaria–report on this and attempt to refute it. I dare you to do it.
America is doomed. The birth rate of the brown beast is such that the United States will resemble a banana republic within fifty years.
Good republican Christian, I'll bet!?
The headline says it all, to Obama and liberals the economy seems to be a burden. The economy keeps getting in the way. If growth and vitality in the economy weren't important to a majority of voters, there would be no problem. If only we had a economy run top to bottom by central planning, the economy wouldn't be a burden to liberals because they would make sure those that had jobs and prospered in the economy, voted liberal. That's where liberals want to take this country, a
What's the big deal? We have one of the strongest socialist economies in the world. We're right on track to duplicate the economic performance of the (former) Soviet Uinion.
Like Reganomic trickle down worked. Not without the largest tax increase in the history of our country it didn't. Like the rest of these uninformed bozos, get your facts and history straight.
if you want investment, then dont complain about the people who pay lower effective tax rates than they should because of capital gains taxes. the REASON why capital gains taxes are taxed at a lower rate is because they are derived from income that has risk associated with it. when you earn a wage even if you work on commission, you pretty much know what next week's paycheck will be like. when you invest and get capital gains income, not only could your next weeks paycheck vanish but your entire nest egg can be lost too. at least when a company goes bankrupt and a worker looses their paycheck, they still have the money they saved int he bank. thats not always so with capital gains investments.
Here we go, Rasheed supporting his muslin brother Burock. Stupid economic argument.
More racists hatred. I feel sorry for you and yours, merry Christmas
Public School is failing because of a lack of direction. Do we really need home economics or a class that shows girls the responsibility of having a baby-i.e. carrying around a doll all day. Get rid of all electives and use that time for study labs. Make Science and Math a national priority.
Just as most corporations have elected to do, I would not invest one dollar until Obama the failure is out of office.
This comment is just plain stupid. Political hatred or personal will get you nothing. get ready for 4 more years.
Four more years of Obama will equal an additional four years of failure. Obama has accomplished nothing and should be in prison. I don't hate Obama, I hate that he is not qualified to be president. Obama is ignorant and a soclialist. The problem with stupid liberals is that when someone speaks against Obama it is hatred or racist. I speak against Obama because he is a complete failure.
Go to your local alley and find a crack head or drunk and I promise he will be more qualified to be president than Obama. Obama is clueless and worthless.
Again, you are nothing more than an ill informed hateful and, probably republican "good Christian". I feel sorry for you.
If you consider the effects of outsourcing and wage and benefit cuts while continually increasing our population it's obvious why our economy is weak. We have to either stop population growth, stop outsourcing, or stop letting the elites take all our money.
TV – Video games = Lame, I want to be cool like on TV or I rock and pwn you....neither makes much of a future. Till, actual intelligence and reasoning power become "cool" the country will continue to become a land of idiots.
Another leftist CNN writer attempts to shift the emphasis off of the deficit and onto other issues related to the economy. No one can spend 40% more than they bring in and not be in serious financial trouble, including Uncle Sam. It is well past time for massive across the board spending cuts that both political parties are avoiding like the plague.
I like the term "no one" and I agree but, the US Government isn't "no one". Our spending, especially in times like these is an absolute necessity. Where you when the republican so called "smaller government" party were overspending like maniacs and giving us absolutely nothing for it?
When he says "consumption", he means, 'by households'. Not government. He is talking about expenditures by individual consumers. Versus investment by individual consumers. He is advocating that we, as inviduals and families, put more of our paychecks into savings and investments, rather than spending it on "stuff". I, on the other hand, disagree. We need to buy more stuff to put Americans back to work. Then, we can start thinking about investing. But not before.
Without a great deal of "thoughtful" government spending we will take a very long time to dig out. but I guess thats what you want. Anything to make this guy fail, right? If you could pry all of the cash being held by the corporations you think are our savior, then fine. But wouldn't you call that government interference? Can't have it both ways bud. The average American is tapped out.
Education is failing because of: Dept of Educ. – close it; results measured in $ spent; refusal to test; unions.
Economy is failing because of: NAFTA; Repeal of Glass Steagel; 15 year run of credit based expansion due to "liberlaization" of mortgage rules. Thanks, Bill Clinton. Get use to it folks; it will take 15 years to pay it back.
Another example of the danger of a little knowledge. NAFTA had nothing to do with it and daddy Bush was the front man for NAFTA before Clinton. Greed of corporate has driven many of the low labor level jobs overseas because they can. If this president stopped it today, you and your republican friends would claim he's and the govt are stepping out of bounds in the regulation of business. i say you are obviously republican because you don't know diddley about economics.
The repeal of the Glass Steagall act has its roots in the financial deregulation of the early 80s. Have we forgotten the S&L crisis already? You should really be thanking Reagan, because the policies he put in place played a huge role in the financial meltdown. Democrats, Republicans, Liberals, and Conservatives are all to blame.
Education will improve when parents start caring about how much time their child spends studying instead of worrying about how fast he can run with a ball.
Weird, he wants to spend more money. That's his solution to all of the US' problems. Just throw more money at it until it goes away.
No, he wants us to invest. Not spend. Unless you call buying a CD or bond "spending". I actually disagree with him and argue that we SHOULD spend. We consumers, that is. We need to buy appliances and household furnishings and tools and you-name-it. We need to give businesses assurance that there are, in fact, customers out there, and, thus, they should start hiring. Zakaria's argument is not going to bring down the unemployment rate, except, perhaps, for some construction work. Mine would.
It's called Kensington, it hasn't worked, it is not working, but for reasons that pad their pockets Democrats continuously insist that it will work.
I read in an article in Discover magazine regards to solar panels. One of the scientist - unfortunately I can not remember his name - said something that has resonated with me for months. "We used to build things in America"
Fareed uses the term "compelling" to describe the GoP arguments, . A better term would be "plausible". . The trouble is that when GoPers say something "plausible", Be Forewarned - One can depend upon it : It is a scabrous LIE ! ! !
he single most important thing to help our economy is for these corporate bas tards to bring our damn jobs back from overseas. In their ernest effort to make bigger profits for themselves, they have put half of americans out of work. Real patriotic ass holes.
Im trying to figure how an unemployment rate of 10%-13% translates to half of Americans. Just the actual fact that its not all due to this posters belief is a perfect example of how ill informed people here are.
Its amazing to me how many responders here actually believe they have any knowledge on economics or present (recent) history. Tax breaks and total lack of regulation (and republican weakening) of those that are supposed to, over the last 10-12 years have put us where we are. The ending of the tax "breaks" for the rich is not a tax increase and has proven to be totally ineffective as a job creator. Companies in the USA have for a long time now, pocketed the lions share of their earnings instead of reinvestment in their own companies to spur their own profits. Bethlehem Steel is a good example. This is the exact situation that the oil companies are using to steal from America and Americans. Do they really need an "incentive to drill"? You are kidding right? Isn't a company supposed to take the investment risk to deliver their product? Finally, no company considers tax margin as a factor in expansion or relocation. Its absurd that so many Americans believe the crap they are being fed. Im a small businessman, and my wife a small businesswoman. Give me a tax break and its going in my pocket. The biggest lie ever perpetrated against the fools willing to believe it. What creates a job in my, my wifes, or any business, is a greater demand for our product or service, than what we can provide with present staff. Get real people.
So you bury that cash in a jar in a back yard? Even if you aren't personally creating a job, if you are spending, even if you are putting it in a passport savings account, that money is generating work. The government is a monster. The only solution is to starve it to death.
People too often see a college degree as a necessary entry point in to the business world, but degrees in the hard sciences were seen as too difficult so there has been a big trend towards degrees in soft sciences which are all but useless for innovation. In the meantime, colleges pushing to keep enrollment up in the engineering and sciences departments began to "dumb down" their requirements to get a degree resulting in a lot of degrees on paper going to people who really are not qualified intellectually.
Well said. now lets end the federal govts investment in education like some of these bozos want to do.
While I don't necessarily agree that degrees in the "soft sciences" are useless for innovation, the rest of your post is right on. Half of the kids in these degree programs probably shouldn't even be in college, but schools keep pushing them through so the school looks good. The result is the people who really are qualified have a hard time finding a good job because of the glut of graduates.
Anyone else here notice all of the one liner hate messages from the right, and all of the thoughtful, well researched and "provable" issues the left has brought up? Makes you wonder huh?
No doubt investment is what we need. But investment is a friendly word for "spending." What has happened in our political environment is that the national dialog is being hijacked by people hell bent on "reducing spending" instead of "increasing investment." To these people, I ask, tell me just one way how "reducing spending" is going to create a single job.
Reducing public spending means you increase private spending.
Fareed, people either save money or spend it; you can’t have both.
I agree, we need serious investment for the next generation of growth but you know what that means: less consumption. You want us to save? Fine, then we can’t spend.
And if we can’t spend, you know darn well that is going to keep unemployment rates high. Hoarding cash into CDs and what-not is not music to the ears of retailers and shippers and manufacturers in the U.S. – they see households saving money, and hiring new staff will be the last thing on their mind.
While I agree with you on the need for infrastructure improvement, I think jobs are more critical today than stimulating investment. We need a short-term “quick fix” and that means a temporary but substantial boost in consumption.
Then, once we’ve knocked several points off the unemployment rate, I would implement your investment plan. But not until then.
Don't worry bud. All the big companies that got out tax money, and the banks are hoarding it all. If they don't let it go we are screwed no matter what we or Obama do.
The Jew parasite is sucking this nation dry. There is but one "solution."
Are you kidding? Why don't you go to bed and leave the real important conservations to the grown-ups?
Take a close look at this nation's decaying corpse and you'll find the Jew maggot feeding.
No doubt The Coming Man is an Occutard.
You are such a hateful S#B. Must be another of those good Christians I keep hearing about.
Im signing off, too many idiots here.
Run away, Jew!
Hateful SOB, aren't you?
Well, before we get carried away thinking for ourselves, shouldn't we consider how our economic policies might effect Israel or the precious Jewish-Americans whose opinions are so very very important?
your weak, i'd leave the discussions to those who can actually have them
Should be "you're" weak. I'd leave writing to those who can write.
Mr. Zakaria keeps beating the drum for more science and technology grads, and more college grads. Last time I looked, there were 17 million Americans with degrees doing jobs that don't require degrees, and no shortage of math and science grads. There are some openings in engineering, but that is with companies looking for specific experience who have no interest in hiring new engineering grads. At a time where nearly 40 percent of the jobs in this country are low paying (and the percentage is increasing), do we need more educated people?
Two things would have an immediate impact on the economy:
1. Create a "rent to own" program for the residential real estate held by the quasi-federal agencies. Will clear up the inventory and put the properties in the hands of "potential" buyers who will have an incentive to take this opportunity to become homeowners.
2. Build an infrastructure of massive pipelines to link reservoirs and major rivers within the 48 states.
and cause us to go bankrupt before we reap any benefits
rent to own already exists, it's called mortgages
and a giant pipeline system will just cost money, not earn, plus the costs to maintain it and the nightmare of either having to create a federal agency for it's oversight or having 48 separate state agencies and have them all interconnected, logistical nightmare
Although I agree with most things that Fareed talks about I completely disagree with "That's what this election should be about"! All the issues of economics, unemployment, taxes, price of gas, and what have you mean nothing in comparison with the bigger (far far bigger) picture. The only thing this election "SHOULD" be about and it is not is the "rule of law". When Obama has created a huge class of people that are above the law, has signed the extra-judicial assassination of American citizens (very bad people to be sure) without any oversight and without due-process, when this administration has helped erode the civil liberties of people everywhere, continued the rendition policies and torture policies of the previous administration, and I could go on for ever – should we really be talking about if we should pay a little more or less in taxes? Wake up people!
"It's a compelling picture, but the data simply do not support."
I believe you meant to type, "does not" instead of "do not support".
"Data" is plural; "datum" is singular. E.g., "The data indicate ...."
Keep it Fareed, you're fooling us all.
"All this was inspired by the principle–which is quite true within itself–that in the big lie there is always a certain force of credibility; because the broad masses of a nation are always more easily corrupted in the deeper strata of their emotional nature than consciously or voluntarily; and thus in the primitive simplicity of their minds they more readily fall victims to the big lie than the small lie, since they themselves often tell small lies in little matters but would be ashamed to resort to large-scale falsehoods. It would never come into their heads to fabricate colossal untruths, and they would not believe that others could have the impudence to distort the truth so infamously. Even though the facts which prove this to be so may be brought clearly to their minds, they will still doubt and waver and will continue to think that there may be some other explanation. For the grossly impudent lie always leaves traces behind it, even after it has been nailed down, a fact which is known to all expert liars in this world and to all who conspire together in the art of lying."
—Adolf Hitler , Mein Kampf, vol. I, ch. X
i've been waiting for some shmuck to quote from mein kampf, clearly you have no idea what he's truly writing about
Yes, Israel, I'm sure you have a far deeper and more richly nuanced understanding of the Big Lie than the average (goy) "shmuck." Congratulations.
I find that book "What is to be done – 1862" written by Chernyshevsky (a Russian Utopian socialist) was actually more historically significant than any of Hitler's writing. It seems that Nazi Germany copied the Bolsheviks' many tricks from years before and used many of them same Government takeover tactics–Except for blowing themselves up with Nitro and dynamite standing next to politicians as a method of assassination. That is still a Bolshevik trade mark.
it's times like these the words of a great and very shortlived president come rushing into my mind
"ask not what your country can do for you, but what you can do for your country"
seems that for lots of people these words mean nothing, since they expect the government to solve all their problems
talk about having no idea, i've been waiting for some nebbish to misquote Kennedy's inauguration speech, clearly YOU have no idea what HE's truly talking about.
"If a free society cannot help the many who are poor, it cannot save the few who are rich."
The text of the Kenndey speech is as follows:
And so, my fellow Americans: ask not what your country can do for you – ask what you can do for your country.
My fellow citizens of the world: ask not what America will do for you, but what together we can do for the freedom of man.
Kenndy's fu; s[eech was a request for cooperation and, to quote the Bible – Beat swords into plowshares to a degree. We don't seem to be wanting to do that anymore....
No surprise to see the States in trouble. How many trillions did you think you could spend on ill conceived wars before you went broke. You have destroyed millions of peoples lives abroad as well as destroyed your own children's future.
You are over the edge of the Abyss....... no use complaining about it now.
Everyone complains about the US getting involved in the world's business until they have a huge crisis, then they complain that the US didn't come to their rescue.
I know of a ready made way to jump start the economy, double the FBR(Federal Benefit Rate) of $674 a month to $1348 a month and watch the Disabled and Seniors who get SSI(Supplemental Security Income, SSI is not Social Security), People getting Social Security Retirement Income or those getting SSDI(Social Security Disability Insurance) sometimes can get SSI, We spend money in the local economies where and near where We live and that will create a Demand for Jobs as there will be a Supply of Money, Restaurants, Used car dealers, car repair garages, pizza restaurants, etc, etc would all benefit and so would state budgets as they'd collect more tax money and It wouldn't be some temporary fix. But It's an idea, better than cut, cut and recklessly cut some more.
Unfortunately, as compelling as Mr. Zakaria's argument is, I think there are several flaws:
First, the growth we experienced post WWII was not the result of investment. The simple truth is that every industrial nation that could compete with us had its infrastructure destroyed by war. We stood alone, and so we hit the economic accelerator.
Second, his argument about not having enough science and engineering graduates, as others have noted, is not relevant. We really don't need more science graduates – we cannot employ the ones we have now. I have a PhD in Chemistry, and I was early retired from my job. I am having lunch tomorrow with someone who got her PhD in Materials Science and was laid off from the same company three years ago, and also cannot find a job. A more interesting example was Mr. Jake Santos, the gentleman who publically resigned from AIG with a full page ad in the WSJ. If you look at his profile, we has a materials scienctist from MIT. Additionally, with the advancement of computing resources that gives everyone immense power in a relatively inexpensive ox, a single engineer can now design things that would take a battery of engineers a couple of decades ago (Indeed, while I was in graduate school, simply moving from a 386 machine to a 486 cut the calculation time for a curve fit from 45 minutes to about 10 – I think you see my point).
Finally, you may want to look up the term service economy sometime. While the term came up in the late 80's, it actually has been around longer. It was found that after WWII more job creation was happening in the services than hard manufacturing. With off-shoring, the trend accelerated – the problem is, service sector jobs did not grow fast enough – the housing bubble created an unusual situation – and now we are in te situation we are in.
Finally, WWII was a situation of massive government investment – most of our industrial base was dedicated to war production, which was paid for by the government – and since we were producing items that were often lost during war – bullets to airplanes to tanks to you name it – tere was a demand built up. Even then, after the war the economy wasn't rosy – we had many ex-servicemen who were unemployed.
Bottom line – Mr. Zakaria does not have the answer. I am not sure what is the answer, short of reducing our economy and standard of living to a thrird world country that is receiving investment.
Excellent points. I have said for a long time we were over-employed and are now dealing the consequences. Companies have realized they don't actually need all these people to do the work. I think we are going to see a return to households with one person working and the other staying at home. I can use myself and my wife as an example because one of us works full-time and the other only part time. We manage our money carefully (we don't live beyond our means) and are quite comfortable. People have to be responsible for themselves.
So wars alone won't do it? We've been in three of them the past 10 years, and now we're going to start a fourth in Syria or Iran, so maybe they should listen to you.
Very right point pulled out by Jakaria. The infrastructure is becoming worse e.g in Phoenix which is the 5th largest city in USA you find that public transportation is minimal and the government is not even creating tourist spots etc to attract tourists. They still depend on the natural beauty but people cannot just keep seeing natural beauty alone. This is just an example, USA is a country of work and not talk I feel lately USA citizens are increasingly talking more than working hard.
So I guess the answer is more infrastructure and more public sector unions and burdensome public pensions so that we can be more like Western Europe.
Guess again, bucko....
I believe that the weak economy is mostly due to the loss of manufacturing jobs to other countries and that there is little that can be done about it until these "other' countries standard of living (wages) approaches ours. This is just starting to happen in China. Manufacturing jobs are key to an economy. Making something from nothing which includes information tech. like video game designing and also conventional stuff like auto and furniture building. Tariffs would slow the bleeding but in the long run have a neutral to negative effect on the economy.
So far, Todd, you're the only poster on this website with a clue.
anchor babies are diluting our European blood with colonies of fruit pickers and laborers. Unless we can build our rockets out of tortillas, The face of our nation is going to change into the face of Mexico and central America.
So the real problem is not taxes because they're already low, but education and infrastructure.
And the Republican solution is, of course, to cut education, cut infrastructure, and give more tax breaks to the rich.
The Organization for Economic Cooperation and Development is a left wing think tank.
You were just lied to.
Again.
Although investment into infrastructure is definitely playing a role, I'm sorry, but I still feel the primary issue is Debt. The thing is, it's not Government Debt that's the primary issue; it's private debt.
Currently the total debt (Government/ Business/ Private) to GDP ratio of the US is approx. 350%. This is about the same as it was in 1930. The debt looks very different now; in 1930 most debt was Business and Private, Government only had a small percentage. Today, if you combine State and local government debt to Federal, it exceeds Private debt.
Still, it's the shear amount of debt that's holding us back. 40 years of excessive spending and living beyond our means at all levels have contributed.
We are resolving this; albeit slowly. Our total debt/ GDP is decreasing at roughly 10% per year, primarily due to foreclosures, people paying off debt when they can afford to, and resolving unsecured debt. There was a similar process in the Great Depression, only the process occurred much faster; roughly 50% per year. By the time 1940 came around, the debt to GDP was a much more manageable 150%, and we could afford to go to war, which kick started the economy back to life.
My point is: at the rate we're resolving our Debt/GDP ratio, it will be another 10 years or so before the debt reaches a more manageable level. Until then, we need to spend money wisely, at all levels. No more "Cash for Clunkers" giveaways. No more out of control consumerism like we saw on Black Friday.
Investing in our future makes a lot of sense. Roads, energy production, conservation, education, etc... . Frankly, I'd like to take 50% of the money used in unemployment and use this to create construction jobs, adult education retraining, etc... .
The BURDEN? The BURDEN is that we are no longer manufacturing any7thing here. We cannot provide employment for the millions who are out of work with research jobs, public works make-work jobs and tax-dependent programs. We need to stop buying everything from the Chinese and the Mexicans and the Indonesians and the Indians and the Taiwanese and START MANUFACTURING OUR OWN GOODS AGAIN! We need strong import tariffs of imported finished goods, We need to stop giving tax breaks to companies who outsource goods and services.
Good to see someone has paid attention to the actual cause of America's economic death spiral. Free trade agreements forced our manufacturing base and its middle class jobs overseas. When you invest in an American based company it doesn't create any jobs stateside as its manufacturing division is located overseas which is where your investment goes. Your stock may perform well but it wont create any jobs here.
Where is the stuff you are all buying for Christmas Presents MADE? In CHINA! THAT's our "Burden"
Please explain why investors with capital are not starting new business. Can you perhaps site another government staistic that says the Obama admiinistration is doing everything just about right?
Really CNN, you need to think about getting out of politics and into news reporting before it's too late.
People ARE investing in American companies Scott but the manufacturing base of those companies is located overseas which is where the investment capital goes. The Stock market is doing just fine as our companies are making profits but that no longer helps the average American as it creates no jobs stateside. Obama had nothing to do with this, think Bush, Clinton and Bush.
I said it before and I will say it again, we are in all aspects becoming another Mexico, simply because we have people like "Newt Gingrinch" and George Bush, and Cheney in our government
they spent something like 4 trillion dollars fighting a personal / corporate war, and we cant even retrofit our bridges.
That's right Fareed, just ignore the giant sword of Obamacare hanging over our economy and business. I'm sure your liberal kind would prefer to blame ANYTHING else. It must be repealed for our economy to respond to free market influences again.
Fareed, this may be unrelated to your article, though I would like to present an example of the US workforce development:
Many companies hire both full-time and part-time workers, and many of these workers (US citizen and foreign) are hired on a project basis, rather than permanent full or part-time. Someone working full-time with benefits today, may not have these benefits six months later. Many people working today are nothing more than "Christmas help" whether they are working in December or May.
Technology will continue dominate cost cutting measures to such a point where companies will squeeze everything they can out of their workers. I would not be surprised at all if companies such as Walmart implemented real-time scheduling systems, where they "hire" as many as 1000 people who are "on-call" and install automated calling systems to call "employees" in to work based on the number of customers in the store. Sure they hired 1000 people, but how many hours per week are those 1000 people really working? This is an exaggerated example, though I am sure that many businesses currently use some sort of system similar to this.
Both sides have it wrong. Burdensome and expensive government interference and regulation absolutely does hamper economic growth. Anyone who says it does not, has never ran a business. However, by the same token, removal of government regulations does not automatically guarantee or jump start economic growth either. You do not manufacture something because a regulation was lifted or you got a tax break. You manufacture it because someone will buy it. I can tell you in all truthfulness, that I personally know business owners who fired employees to free up cash in order to comply with the new healthcare law. That's a fact, like it or not. Removing some of the overreaching federal regulations would be helpful, but alone cannot generate economic growth. The federal government can only set the playing field and create the best conditions that they can afford and then let the private sector do the rest.
I really miss the days where companies needed good people and they would bend over backwards to keep them employed.
War bonds were not an "investment". They were a loan to the gov to make war. War does not create wealth but destroys wealth.
Ideological wars certainly which is what USA has done mostly of the last 60 years EVen the "War to End War". Romans warred Carthage to get the grain fields of Sicily & control of the sea. USA wanted a canal thru Panama. I am not saying it is right but there were often material benefits perceived.
What a joke. Yes, high tech degrees are dropping. Why? Who in their right mind would run up 150K plus in student loans only to have to compete with engineers/scientists etc in Asia that are paid pennies on the dollar?
It is simple corporate greed, and greed in general. The American worker has been systematically devalued and tossed aside for profit for the last 20 years.
there is some truth in that but the general decline in the quality of life has more to do with our alienation as a nation than anything else. today, you can get processed thru any government program without anyone actually know a thing about you. It is the depersonalization which has contributed to the general moral decline. Also an aging propulation and the enormous strain of social security. But this happens to every tribe. They reach their zenith and then decline. An Indian chief summed it up neatly long ago when he said 'Tribe follows tribe, nation follows nation, like the waves of the sea. It is the way of nature, there should be no regret'.
We had a great run. We should happy about that.
He neglects to mention an aging population, the enormous burden of social security and elderly health care and
a general decline in moral values and confidence in one's fellow man. Personally, I think we should open our
borders to anyone willing to come in and do some work. The quality of the immigrants is generally higher than
the quality of the native-born. But instead we have the Perry's and the Gangrene's lobbying for border fences.
Pathetic, pathetic, pathetic ... I hope Gangrene wins.
The loss of human capital that Mr. Zacharia is quite palpable to those of us with children entering the University level. Places like the University of California turned away hordes of good, motivated students because of budget cuts. These student were sent to community colleges that are not capable of absorbing the extra load, and as a result, these students are sitting on the sidelines, waiting up to 4 years so that they can transfer to a UC campus or another private University. If this is how we waste the talent of young people in their prime, it is not surprising to see our decline with respect to other industrialized countries. Unfortunately, we elected our representatives, and therefore have nobody to blame but our own nearsightedness.
The waste of human capital occurs when we do not employ it after college, not before.
One thing Fareed Zakariya will never point out, as he is is a staunch Indian, is that one of the most important factor damaging the outsourcing of all quality jobs in the technology sector to India. I myself is an engineering executive who witnessed this exodus of technology and engineering jobs to India during the last ten years or so. When hundreds of thousands of engineering jobs are transferred to India and only sales, marketing and product management jobs are available for Americans in US then there is little incentive for students to study engineering or engineering related majors as no one want to plan to be jobless after they graduate. This is a simple plain truth which Fareed Zakariya and other Indian Americans will never speak about.
Typo in my typing above
*one of the most important factors damaging the economy is the outsourcing of all quality jobs in the technology sector to India.*
I agree to a point. Most of what I have seen in engineering outsourcing is due to the search for lower cost. There are many problems with using outsourced engineering and I believe that companies are beginning to recognize it and will begin to bring it back to the US.
Obama is THE burden on the US economy. He will bankrupt us if given another chance next term.
Higher taxes on the wealthy would help at least somewhat.
Agree that we should ensure that we have everyone contributing what they can but honestly this is only a partial answer since the government tends to spend more than it takes in. The thing I worry about is they really won't cut and two years down the road they'll be asking for more
Investing in our country...what a novel notion. You better no tell the GOP, they will say we are wasting it. If it doesn't go towards invading a country, or keeping money among the elite, they are so against spending.
I believe that Mr. Zakaria has taken effects and tried to make them causes for our lack of growth. In the last 20 years we have seen globalization as never before in human history and tremendous productivity gains in US manufacturing – more with less people. The globalization has resulted in outsourcing to and investment in low-cost countries where the population is educated and has a decent work ethic. This investment and the jobs created would have been for Americans if US cost had been in line with foreign manufacturers. While this loss of jobs and investment is negative, the outsourcing to low-cost countries has kept inflation relatively low for the lower technology goods imported to the US. However, we have come to a tipping point where the lack of investment in the US has not created new private sector jobs that can contribute to government revenues so that we can build or repair our infrastructure. I believe we are in a downward spiral and we need to do something about the trade imbalance that would allow companies to reinvest in the US because it is profitable again. Regardless of what the Tea Party or the Occupy movements want, economics always prevails and companies will not knowingly do things that put them out of business. They will do things to preserve themselves even if it looks "greedy" to most people.
I believe there are several ways bring back jobs including tax incentives for investing in the US (sounds a lot like the Republican mantra), managing the FX rates so that we have a fair trade (not free) and slowly cutting government spending so that our borrowing cost can be reduced so that this can be used to improve infrastructure
"In other words, the big shift in the United States over the past two decades is not a rise in regulations and taxation but a decline in investment – in physical and human capital": Good luck trying to convince even one big business or big money person, or any of their ilk, as they have and continue to vehemently argue (often petulantly and abusively) that this isn't the case at all and that the root of all evil is social programs to actually help people and taxing even one penny of their gargantuan mountains of loot. If GOD HIMSELF or perhaps a highly advanced alien race came down and told them directly they still would refuse to accept this because it cuts into their obscene profits and anything that does that is to be resisted to the bitter end, which may be revolution and civil/global war with, at some point before during or after, a global economic collapse that will render all of their money worthless in a righteous act of poetic justice.
The United States pulled out of the depression after World War II becuase the rest of the major industrial poweres had been destroyed by the war itself and we still had cheap access to raw materials like oil. Wars are typically bad for the economy- unless the war is short and the victrous country gain strong strategic and econmic advantage. The wars of Vietnam and Iraq have decimated our economy.
Don't forget about the Cold War. The US govt continued to spend huge amounts of money after WWII fighting the USSR. This was a major reason the economy didn't collapse again when the "hot" war ended.
This author simply isn't very bright, is he?
let's see....at the peak of the baby boom for college graduates – yep, 1989 or so – 90,000 science/engineering graduates.
let's see....in 2009, long after the boomers cleared the gates, about 87,000 science/engineering graduates. Hmmmmm. As a fraction of the total pool, Author Sir, we have actually INCREASED the numbers of students graduating in these fields.
The fact that Affirmative Action and the "everyman," approach to higher education (funded by the taxpayers, of course) makes a 2009 graduate worth about 30% that of a 1989 graduate is another topic entirely....but one that is clearly embraced by Mr. Obama....the penultimate example of an Affirmative Action project if I ever saw one (Michelle is the ultimate example, and Lantraicia and Shamika (or whatever the hell their names are) will be #3 and #4 on the list.
Buffoon.
Your contempt for our President and his family and your blame of Affirmative Action (or "everyman" approach) devaluing our students is a pinpointed spotlight on your views. You don't need come out and confirm or deny it, you sir, are quite racist to presume that the only students of worth are those who came from white families. And just because I said what you implied does not mean you can somehow flip this interpretation upon me. If you think that you're educated enough to call Mr. Zakaria a buffoon you better live up to the fact that you understand the subtext of your comments. Hope you cut the eye holes on your white sheet well enough that you can read the computer screen through them.
I don't always agree with Mr Zakaria but he's spot on here. By refusing to invest in ourselves America has lost ground. Education, basic research and infrastructure are our most important assets. I knew we were in trouble the day people cheered over the demise of the Superconducting Super Collider project in Texas. Our Space program now has to buy rides to the space station from the Russians. Basic research and exploration created trillions in wealth yet now we no longer believe in science it seems. We have become selfish, greedy and short sighted to our own determent.
"the Obama administration has not reviewed or issued significantly more rules than its predecessors"
So... Does this mean that if I gain an average of just 5 pounds a year that I will never be obese? After all, I didn't gain any more in any one year than any other year.
Laws and regulations add up. At some point they become burdensome. Have we reached that point? I don't know. But saying that we haven't because the rate they are being created hasn't increased is just stupid. This is either poor journalism or decietful. Possibly both. Either way, shame on any readers who don't look deeper, think for themselves, and ask the basic questions required of a thinking reader – who says so, who ELSE says so.
In your example, you're gaining an average 5 pounds a year because you're taking in more calories than you can afford; perhaps more exercise is in order. Don't have the time or money? Make the time or readjust your finances if you're so concerned about the weight gain.
I work in the environmental consulting industry. Often-times, the most anemic portion of a business organization is their environmental staff; this is a function of those in the corporate structure who will not apportion some of their profits to addressing regulatory needs. I sympathize with the fact that there are some poorly written / poorly executed regulations out there (Boiler MACT and Stationary Engine rules (NESHAP ZZZZ, NSPS IIII/JJJJ)). When I hear businesses say they are burdened with regulations, it's like hearing a whiny high schooler saying they don't have time for homework, but then waste hours on Facebook, Video Games, and everything else other than their homework. Well written regs find ways to place the burden on large businesses / emitters and leave the small businesses with fewer or no regs to have to comply with. The blanket statement that regulations are bad is too simplistic. I want anti-regulation candidates to identify regs they find burdensome and then say what they would do instead.
Huge increases in debt, throughout the history of this nation, were tied directly to war. Look at the large jumps in the national debt. All of them match war.
Chickenhawks got us into this mess.
The other thing that is at a low since the 1950s is American production. We have allowed the vermin that run the corporations to send American production and jobs overseas to what amounts to slave labor factories where people are paid 1 dollar a day or less all in the name of the ultra rich being that much richer.
What made this country the strongest in the world at the end of WW II was our production base. All we make now are cars and weapons. Consumer items, food, electronics and many other things that used to be made in this country are now made elsewhere. We have become a service economy as opposed to a production economy. No wonder we get our heads handed to us in trade deficits.
But hey, as long as our CEOs can all have private jets instead of having to fly first class, or get that 5th vacation mansion or 3rd yacht, that's all that matters right ?
Not the economic policies or the government are the problem. The problem is the american people. This nation used to be made of highly courageous, independent, and hardworking people, who left their countries and came here for a better life. Unfortunately, their offspring are a bunch of illiterate, obese, lazy, and ignorant people who destroyed everything their prededessors created.
I take extreme offense to this as I am the descendent of both original English colonists and European immigrants who came here in the early 20th century. I worked very hard to get through school and continue to work hard for my career and community (as do most of my friends). We are financially responsible and socially stable, in our late 20s, and fairly liberal. While there are people who game the system and want something for nothing, one would be hard pressed to say they are the majority. Negative sound bite comments like that do nothing to further a constructive discussion.
Can some corporations be lying when they say they can't hire engineers, etc? Recently Xerox CEO Burns spoke about thousands of "unfillable " engineering type jobs on a Soledad O'Brien CNN show. BUT ... Go to the Xerox job site and you got a DIFFERENT STORY. Search their jobs for "engineer" I got seven - 7 !!! - hits. Xerox has 92, 000 employees so how are seven engineering jobs something that panics the CEO and keeps her up night? The thing most disturbing about the story is that journalists such as Soledad O'Brien do not even bother to do simple fact checking like we have just did.
... Od course it's "like we have just done."
I can't speak for engineering, but we are cranking out a huge number of graduates with science degrees – biology, chemistry, physics, etc. Here is the problem. A student finishes graduate school with a degree in biology. Due to the large number of graduates relative to the available jobs the student (if he/she is lucky) becomes a postdoc in a research lab where they work extremely long hours for less pay than a tech with a bachelor's degree in the same lab is making. The postdoc becomes increasingly irritated with the cattiness, lack of professionalism (everyone is afraid someone else will steal their ideas – with good reason), and constant squabbling for the few available research grant dollars. This combined with the long hours, low pay, and poor benefits causes the postdoc to become increasingly dissatisfied and unproductive and eventually they leave the field completely in search of greener pastures. The problem is not the number of students graduating with degrees, it is the dysfunctional system they are expected to work in.
I believe him to be right, but how can Leave it to Beaver work in a Beavis and Buthead world?
Fareed, Sorry to say, but this is a huge logical fallacy.
We are dealing with the fallout of a huge asset bubble. Following 9/11, Greenspan kept interest rates too low for too long. Fannie/Freddie and Wall St invested in building too many houses. This caused too low of unemployment and too many houses to be built. People used their houses like piggy banks as prices went up. Now we pay the price with high unemployment and foreclosures.
NAFTA gave us a short term boost by having cheaper goods, but in the long term, off-shored too many jobs. With no jobs, now there is no demand for products and services.
Bush's tax cuts also gave a short term boost to the economy, but now we are paying the price with huge debt and cannot raise interest rates to encourage saving or we will be crippled by the taxes to pay the debt. The tax cuts also gave a huge handout to the wealthy at the expense of lower and middle class. This again decreased demand. With no demand we go into recession. We need to raise taxes on the wealthy to pay the debt and ease the burden on lower/middle class to create more demand. Then raise interest rates to encourage saving.
As for over-regulation, Fareed, do you run a business? Business starts is not a measure of over-regulation. Try counting the number of employees dedicated to human resources and regulatory and compliance and accounting compared to employees doing productive work. Count how many hours are spent on silly things like getting emissions checked on vehicles.
As for infrastructure, maybe we could invest in infrastructure if the unions weren't getting such fat pensions.
Yes, it is true, we are having a hard time finding GOOD engineers. This is partly the irony of the technology becoming more accessible.
Why is everyone so d#@# blind to the fact the #1 hit on everyone in this country in the last decade is fuel prices which has caused enormous inflation. I mean come on they have raised these prices sky high from what they use to be ten years ago. Most of us have a far commute we have no choice but to get fuel. Now they are saying the US is exporting gasoline so what the why can't we lower these prices lock it from being speculated on this will fix everything mostly Im telling you if they went back to prices ten years ago I would have a extra $400 a month no lie that would help us a whole lot and I know I'm not the only one.
You said: "One theory heard a lot these days is that the economy is burdened by excessive government regulation, interference and taxes. Cut them, the Republican candidates all say, and the economy will be unleashed.
It’s a compelling picture, but the data simply do not support it."
I disagree with your conclusion from the data you present. The Republicans are correct regarding how to get the economy moving again. Our anti-business Government is our #1 current growth problem. However, I do agree with your conclusions on infrastructure & investment. Government should handle infrastructure but major tax reform for both personal & business is necessary to improve investment in the real economy.
"The Republicans are correct regarding how to get the economy moving again. Our anti-business Government is our #1 current growth problem."
Based upon YOUR statements, I fail to come to the same conclusion. It's a pretty scathing accusation to call our government anti-business; especially when you account for all the subsidies that they hand-out to already profitable industries. Smart businesses find ways to deal with regulations; sometimes it means shaking up the status-quo. It's safe to assume most of these people that run these businesses are intelligent, correct (that's the Randian perspective)? So then, why aren't they smart enough to figure out how to make due in new regulatory environments that all they can do is throw their hands up and scream like insolent children?
We were told by the GOP – repeatedly over the last four decades – that if we deregulated and cut corporate taxes, businesses would reinvest the money into capital improvements and worker training. Instead, they claimed the windfall as profits, took larger CEO salaries, and shipped jobs overseas. THIS is what the so-called "job creators" actually did. Excuse me if I don't buy the same lie in a different package.
In World War II we sold war bonds to finance the war. What if we gave people who make more than, say $500,000 a year, the option to either pay a bit higher tax rate or to dedicate an equivalent or perhaps slightly higher amont in a special type of bond that would finance the improvement of infrastructure and education? That way, instead of gambling on derivatives they would invest in America.
Despite the fact that we did it before, that would be socialism now... ARGHHHH SOCIALISM!!! zOMG!
Here is short summary of what Pakistan did for USA.
1) Choose US over Russia as Ally since the creation of Pakistan.
2) Pakistan Join CENTO (Alliance again Russia), just to please USA
3) Pakistan did not took part directly in Arab-Israel wars, again just to please USA
4) Pakistan lost half of the country (Pakistan was at fault) and did not get any direct military support from USA and at they end they had to raise white flag and accept defeat.
5) In 1980’s after Russia’s invasion of Afghanistan Pakistan was brainwashed by USA that Russia is going to invade there land, USA provided full military and some what financial support to Pakistan to train Mujahidin’s against Red Army in Afghanistan, at the end Red Army left and its economy collapsed, USSR was also broken into several countries, it is not wrong to say that former soviet Union was defeated by Mujahidin’s and the won the war for USA.
6) Pakistan is home to millions of Afghan refugees due to ongoing wars in Afghanistan in which USA is directly or in directly involved. Afghan refuges also brought drugs and weapons which resulted in thousand’s of death in Pakistan.
7) After 9/11 Pakistan shook hands with USA again to eliminate al-Qaida and Taleban from Afghanistan, the outcome of this is 30,000 thousand deaths in Pakistan and loss of 60 billon $.
"
"stop the war in or around Pakistan"
We can’t win Afghanistan war without winning Pakistan, says Panetta"
PAKISTAN.....The
New Gateway to Central Asia and Europe.
With a
population of over 180 million most of whom are well educated, english
speaking, entrepreneurial, a cultural and social fit with Central
Asians...Pakistan will now become the new face and gateway to Central Asia and
Europe. Pakistan will thus span this region and provide the impetus for growth,
prosperity and unity among these countries. These are new and exciting times
for Pakistanis who should now look forward to their new leadership role aligned
with Central Asia and Europe rather than the Subcontinent. We wish them much
success as they have sacrificed the most during the past 30 + years creating a
new world order
I have been advocating all along the same answer for USA to rise above it's present pessimisticf doldrums. Michael Spence is practically and realistically brilliant.
Americans must stop this old and prolonged , health wrecking, unaffordable habit of eating – and spending- more then they need.
If the current 65% obese, fat, Americans cut down on their consumption – and start saving money wasted on them, USA is on the road to healing its economy and strengthening its financials.
During the Grea Depression Americans were niec, slim and healthy, but after WWII ended fatness crept into American society again.
The important thing is to invest in profitable things. You can't blow it all on cash for clunkers or aid to some country who hates us. You ought to spend on something with returns.
A general comment that if an organization is mentioned and the results of their study, it would be nice to have a link to an abstract of the organization. Information as to their charter, mission and how they sustain their organization would help in deciding their purpose in conducting the study. I am sure we all can cite studies that make a case.
The real burden on the US economy is the public sector unions and their obscene pensions.
What do you think is killing Europe?
It's the pensions.
I don't hear people suggesting novel ideas to get us out of the doldrums. The truth is that we are not in a position to use government spending the way it was used in WWII due to the size of the debt, relative to the GDP. However, that doesn't leave us powerless.
What we need is capital spending in the U.S. to create jobs. The way to get it is to fix the capital gains tax. Six months is not really long term capital gains, nor should people receive tax breaks on foreign capital gains.
I propose that capital gains be taxed at 18% after one year, 16% after two years, 14% after three years, etc. until reaching zero. Furthermore, the capital gains tax rate should only apply in proportion to the percentage of assets that a company has within the U.S. These moves would have a big effect on where people put their money and how long they hold it there. The stock market would be more stable and companies would be encouraged to build within the U.S.
It would take a populist movement to get this kind of change.
Hey Fareed. How is the war in Iraq going? Declared victory yet? You were all eager for the war before it started.
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