If i could have lunch with anyone in the world, I'd choose Alan Greenspan. My choice might not make me the most exciting guest at a cocktail party, but I have been wrestling with a question and would really like to know if he has an answer. How will the U.S. economy survive after all of our middle-income jobs have been outsourced to Asia and we no longer manufacture much of anything? I hope he has plan, but I suspect he doesn't.
In today's global economy, our middle-income workers are competing with labor throughout the world. They face an uncomfortable proposition -- do they work for less or see their jobs go abroad? How will our economy support this pool of displaced workers looking for jobs that no longer exist? One logical solution is to expand their skill set with significant investments in educational programs. I'm talking about a serious, simply huge investment in retraining workers. Sound expensive? Consider the alternative -- significant redistribution of wealth. I'm not talking about a modest, run-of-the mill Democratic tax increase, but a dramatic, philosophical shift in policy designed to redistribute wealth, similar to tax and entitlement programs in Europe today. The rich will continue to get richer, and the poor will continue to get poorer. Our government will have little choice but to play Robin Hood.
Innovation and entrepreneurship alone cannot stabilize the U.S. economy against Asia's long-term strategy to steal our country's manufacturing base. Asian investments in U.S.-based manufacturing and changes in currency policy do mitigate the effects short-term. However, these strategies are designed for political appeasement and will not change our ultimate destiny.
China is experiencing its own industrial revolution. With 350 million people already in industrialized cities and another billion migrating from the countryside for work, China's seemingly endless supply of low-cost labor will sustain it for decades. Look for the 2008 Olympics to be a defining moment. By then, the world will recognize China as perhaps the world's most efficient form of capitalism. Besides low-cost labor, they are also free from a costly legal system and environmental controls. I'm not advocating for the Chinese justice system or absence of environmental controls, but recognizing them as economic advantages is reality.
|Valassis Communications Inc.|
At A Glance
On second thought, I have a couple questions for Alan Greenspan.