Lots of good thoughts here, but I have a few comments:
1. I think it might be the case that the US has a problem similar to China in needing to integrate its interior regions with the successful coastal areas. The solutions in the two countries are probably different because the political systems differ. But it's also the case that the Republican party has championed false economic doctrines since at least the end of WW1 and yet the failure of US politics allows them to immiserate the majority of states (not people, thankfully) while blaming the Dems and "those people" for the misery.
2. It's hard to talk about Trump and the MAGA movement without mentioning the dysfunctional provisions of the US Constitution. After all, the Dems have been winning presidential and Congressional majorities for the better part of 30 years, but bad luck and bad faith (by the Rs) have combined to frustrate the policies needed. It's not democracy which is failing us, it's the very *lack* of democracy.
3. I'm pretty skeptical of the idea that engineers will save us. It seems that libertarian theology has taken a firm hold in much of the US technical community and that bodes poorly for the future. And yes, the economics profession bears a great deal of blame for this, as you -- being one of the enlightened -- have pointed out repeatedly.
In your theses on America's Economic and Political Problems. I could not agree with you more about the danger of the Republicans "program". It would turn the US into third rate plutocracy. Handcuffing education and science in the name traditional values, is a certain route to national decline. How many scientists and engineers do you think will be produced by Florida schools in the next ten years?
1. The emperor problem is also found in family firms. As the old saw goes, the founder builds it, the founder's child maintains it, and the founders' grandchildren sell it or destroy it.
2. More significantly, I am less optimistic than Brad about America's ability to build a community of engineering practice. Pay is determined by social consensus, not "marginal productivity" (whatever that means in a group effort.) Our social consensus is that engineers are worth much less than financial engineers and less than middle management. Consequently, we have a chronic "shortage" of engineers, since most competent techies would make good lawyers, bankers, and managers, and many of them head to where the simoleons are running. This would be okay if we imported more H1-B bracero engineers. (Their kids would become lawyers, bankers, and managers, and we could import some more.) But we don't.
2.5. Plus, the miserable state of US vocational training.
Back to Theses on the Economic & Political Problems of America. American blue collar workers are just not intelligent enough, not adaptable enough for the new economy. They can’t handle overseas outsourcing of their jobs, understand financial repression resulting from credit default swap crash and the Great Recession, understand how survival has become a chore. To top it off, the new age of AI and robotics is bound to finish them off. In short, the Trump-supporting 49% of the population are becoming an annoyance. For some reason, they are not joining the military.
The sad part is Americans have been conditioned to think that Dollars are the measuring stick of a successful life. The sadder part is that most have learned that Dollars are the source of survival. The saddest is that there is no one teaching them otherwise, that there can be much more to be had outside of the Dollar. IMO the US economy can afford to be redesigned with a different value system.
The GI Bill gave a lot of factory workers' kids a path out of the mills. By the time of the US industrial collapse, mainly dullards were left behind. The union movement required human capital, and that is in short supply in many areas.
#4b on manufacturing. But specifically, what? _I_ can only think of a) not running dollar-overvaluing fiscal defects and b) not bargaining harder to open foreign markets to US _goods_ instead of IP protection. Expensing R&D? Block grants to research universities?
We could go back the high tariffs we had when we were industrializing. They hurt the consumer, but they helped the working man. The problem with that is that manufactured goods have gotten extremely inexpensive thanks to cheap labor, cheap natural resources and cheap transportation. How big a tariff can we put on a $15 dress? We'd still have "haul" videos at $30, just maybe slightly smaller hauls.
Alternatively, we could do things like the CHIPS Act and push for local centers of high technology and build up something like Germany's Mittlestand. The first lithium ion batteries were made in a Boston area factory, but no on in the US followed up on the technology. Even the Japanese didn't follow up. Once they had the batteries they needed for their camera industry, they stopped pushing the technology.
One possibility is picking a set of products and pushing for fully automated production, perhaps things like heat pumps, running shoes and window assemblies. We've been funding robotics, but we haven't been funding a manufacturing application. We should expect several rounds of failure and unexpected spin offs.
Rather than high tariffs that favor only importable traded goods, go for a general Dollar undervaluation that makes both importable and exportable more expensive relative to non-traded goods and promote capital outflow instead of inflow. The revenue from the tax on net CO2 emissions would help get us the needed fiscal surpasses. That means basically fiscal surpluses to push resources into investment (in tradeable goods). A smaler scale version of that would be potential fiscal surpluses used to subsidize only a range of tradables, not across the board.
Lots of good thoughts here, but I have a few comments:
1. I think it might be the case that the US has a problem similar to China in needing to integrate its interior regions with the successful coastal areas. The solutions in the two countries are probably different because the political systems differ. But it's also the case that the Republican party has championed false economic doctrines since at least the end of WW1 and yet the failure of US politics allows them to immiserate the majority of states (not people, thankfully) while blaming the Dems and "those people" for the misery.
2. It's hard to talk about Trump and the MAGA movement without mentioning the dysfunctional provisions of the US Constitution. After all, the Dems have been winning presidential and Congressional majorities for the better part of 30 years, but bad luck and bad faith (by the Rs) have combined to frustrate the policies needed. It's not democracy which is failing us, it's the very *lack* of democracy.
3. I'm pretty skeptical of the idea that engineers will save us. It seems that libertarian theology has taken a firm hold in much of the US technical community and that bodes poorly for the future. And yes, the economics profession bears a great deal of blame for this, as you -- being one of the enlightened -- have pointed out repeatedly.
In your theses on America's Economic and Political Problems. I could not agree with you more about the danger of the Republicans "program". It would turn the US into third rate plutocracy. Handcuffing education and science in the name traditional values, is a certain route to national decline. How many scientists and engineers do you think will be produced by Florida schools in the next ten years?
Ouch!
I have two completely unrelated comments:
1. The emperor problem is also found in family firms. As the old saw goes, the founder builds it, the founder's child maintains it, and the founders' grandchildren sell it or destroy it.
2. More significantly, I am less optimistic than Brad about America's ability to build a community of engineering practice. Pay is determined by social consensus, not "marginal productivity" (whatever that means in a group effort.) Our social consensus is that engineers are worth much less than financial engineers and less than middle management. Consequently, we have a chronic "shortage" of engineers, since most competent techies would make good lawyers, bankers, and managers, and many of them head to where the simoleons are running. This would be okay if we imported more H1-B bracero engineers. (Their kids would become lawyers, bankers, and managers, and we could import some more.) But we don't.
2.5. Plus, the miserable state of US vocational training.
Back to Theses on the Economic & Political Problems of America. American blue collar workers are just not intelligent enough, not adaptable enough for the new economy. They can’t handle overseas outsourcing of their jobs, understand financial repression resulting from credit default swap crash and the Great Recession, understand how survival has become a chore. To top it off, the new age of AI and robotics is bound to finish them off. In short, the Trump-supporting 49% of the population are becoming an annoyance. For some reason, they are not joining the military.
The sad part is Americans have been conditioned to think that Dollars are the measuring stick of a successful life. The sadder part is that most have learned that Dollars are the source of survival. The saddest is that there is no one teaching them otherwise, that there can be much more to be had outside of the Dollar. IMO the US economy can afford to be redesigned with a different value system.
The GI Bill gave a lot of factory workers' kids a path out of the mills. By the time of the US industrial collapse, mainly dullards were left behind. The union movement required human capital, and that is in short supply in many areas.
#4b on manufacturing. But specifically, what? _I_ can only think of a) not running dollar-overvaluing fiscal defects and b) not bargaining harder to open foreign markets to US _goods_ instead of IP protection. Expensing R&D? Block grants to research universities?
We could go back the high tariffs we had when we were industrializing. They hurt the consumer, but they helped the working man. The problem with that is that manufactured goods have gotten extremely inexpensive thanks to cheap labor, cheap natural resources and cheap transportation. How big a tariff can we put on a $15 dress? We'd still have "haul" videos at $30, just maybe slightly smaller hauls.
Alternatively, we could do things like the CHIPS Act and push for local centers of high technology and build up something like Germany's Mittlestand. The first lithium ion batteries were made in a Boston area factory, but no on in the US followed up on the technology. Even the Japanese didn't follow up. Once they had the batteries they needed for their camera industry, they stopped pushing the technology.
One possibility is picking a set of products and pushing for fully automated production, perhaps things like heat pumps, running shoes and window assemblies. We've been funding robotics, but we haven't been funding a manufacturing application. We should expect several rounds of failure and unexpected spin offs.
Rather than high tariffs that favor only importable traded goods, go for a general Dollar undervaluation that makes both importable and exportable more expensive relative to non-traded goods and promote capital outflow instead of inflow. The revenue from the tax on net CO2 emissions would help get us the needed fiscal surpasses. That means basically fiscal surpluses to push resources into investment (in tradeable goods). A smaler scale version of that would be potential fiscal surpluses used to subsidize only a range of tradables, not across the board.
Good ideas for a hard problem.
Agree with everything but #7. There was nothing magical about #5. Marcus Aurelius' error was not adopting another, meritorious son.