What's baffling about the Presidential election is the excitement over the Republican candidates when virtually everything that comes out of their mouths is either fodder for late-night talk shows or pretty deplorable. Rick Perry doesn't know the voting age, Michele Bachmann believes she must submit to her godly husband and philandering former candidate Herman Cain believes a measly 9 percent VAT tax will remedy our economic woes -- despite the fact that all but two of the 27 countries in the European Union feature VATs of 19 percent or more, along with higher tax rates on the rich.
But the most important deficiency among Democrats and Republicans alike is the lack of awareness of the "inconvenient economic truth" that the time-honored remedies to our woes -- whether they are tax cuts or government stimulus packages -- are irrelevant in this global economy, in contrast to the 20th century, when we were Number One. We also don't realize that the economic winners in today's global economy are countries where business and government are a team rather than combatants.
As former SEIU President Andy Stern pointed out in a recent op-ed in the Wall Street Journal, China just announced its 12th five year plan -- has the U.S. EVER had a five-year plan? -- which aims for a 7 percent annual economic growth rate by making a $640 billion investment in renewable energy and high-tech/high-end manufacturing, among other efforts. China's approach is very similar to Japan's in the 1960s and 1970s when the Ministry of International Trade and Industry (MITI) launched a joint government and business effort to develop new industries, including the semiconductor industry.
Despite President Clinton's insistence that China's entry into the World Trade Organization would be a "win-win" that would support U.S jobs, a total of 2.8 million U.S. jobs were eliminated or displaced between 2001 and 2010, more than 69 percent of which were in manufacturing, according to the Economic Policy Institute. It's not just blue-collar jobs that are in jeopardy: Alan Blinder, former vice chairman of the Board of Governors of the Federal Reserve estimated that between 30 million and 40 million high-end U.S. service sector jobs could be outsourced.
China not only surpassed the U.S. as the world's largest export nation in 2004, but only five years earlier the U.S. exported double the amount China did.
Team USA not only doesn't have a plan, but we don't perform regular "checkups" to see how our economic health is affected by globalization. Or when we do, we censor the results if the findings make the president look bad. According to the excellent book, Manufacturing a Better Future for America the only known report on outsourcing, conducted by the Commerce Department and scheduled to be completed in July of 2004, was never published due to Bush Administration's fears that it would hurt the president's reelection campaign.
Along with not measuring our economic health, we don't invest enough in training our workers to adapt to a 20th century economy. According to Manufacturing a Better Future, the United States spent a paltry 0.02 percent of GDP on workforce training and education in 2007, the lowest among all 20 OECD member countries.
Aristotle first argued in the 4th century B.C. that the world was round yet it wasn't until 1492, when Christopher Columbus set sail, that the notion of a round world was established. As Andy Stern pointed out, the Agricultural Revolution took about 3,000 years, the Industrial Revolution lasted 300 years, and this technology-led Global Revolution will take only 30-odd years. Time is of the essence to remedy our economic malaise.