The Coming Economy Shift
By Justin Gardner | Related entries in EconomyAs Bloomberg puts it, countires are weening themselves off the American teat and doing quite nicely…
Demand in the world’s largest economy is slowing as the U.S. housing market falters, a development that the International Monetary Fund on Sept. 14 called a key risk to global expansion. If so, it’s a risk that the biggest exporting nations are better prepared to weather now than five years ago.“Domestic demand in so many other parts of the world is picking up,” says Jim O’Neill, head of global economic research at Goldman Sachs Group Inc. in London. “If there ever was a good time for the U.S. to slow, this is it.”
The share of global exports purchased by U.S. consumers and businesses fell to 17.9 percent in 2005 from 21.8 percent in 2000 as demand increased in the European Union, Japan and emerging markets in Asia and Eastern Europe. Exporting nations in Europe and Asia are poised to grab a larger share of world markets with trade agreements that don’t include the U.S.
If we keep ignorning education, if we keep devaluing the middle class in favor of enriching the wealthiest 1%, we’re going to eventually fail. Maybe not today, and maybe not 10 years from now, but sooner rather than later.
Protectionism obviously isn’t the answer, but neither is letting the free market run wild. And we MUST start paying our teachers better and revamping our education system. The most important investment we can make right now is in our children because they’re going to be running things in 40 years.
What are your thoughts? How do we fix this?
This entry was posted on Thursday, November 2nd, 2006 and is filed under Economy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
November 2nd, 2006 at 12:09 pm
Thru the middle of the last century, we could get bright women into teaching, even at low pay, because there were relatively few other jobs available to them. Once that constraint went away, the problem became: who would go into a low paying job like that? Certainly some people went into teaching because they loved the work. But too many others went into it because they couldn’t hack it elsewhere. And those people are still there.
So we have a conflict: How can we get good people into teaching without better pay? vs Why should we pay more to people who are already in place and demonstrating that they can’t get the job done? The only way I can see to square that circle is to have schools available which can pay their teachers a higher wage but are not forced to hire from the existing teaching corps. (Not restricted from hiring there, just not required to.)
In fairness, you cannot require people to pay double (or more), just to get their children into decent schools. So you have to spend public funds for at least part of the cost of the new school systems. If that sounds like what vouchers do, it is; but vouchers are not necessarily the only approach to achieving that end.
Naturally the teachers’ unions will scream bloody murder. After all, their members (at least the ones who are nto particularly good at teaching) are the ones who will suffer. The objections will be phrased in terms of defending tenure, supporting public schools, fairness to lower economic groups, etc. But the only real objection that they have is that their members will not be rewarded for poor performance.
Maybe there is another way to reform the current inadequate system. But I haven’t heard it yet.
November 2nd, 2006 at 12:34 pm
Maybe the percentages are evening out because other countries’ markets are growing, rather than us failing. Consider how fast our GDP has grown from 2000-2005. The American economy certainly has not failed over that period of time, it has become more robust.
Justin, you seem to want to close the gap between rich and poor within the United States, yet maintain it internationally. What gives?
November 2nd, 2006 at 1:15 pm
Um, Jimmy is right, this isn’t a problem of global free trade, it’s a feature. The global economies are doing better domestically because their populaces’ standard of living is starting to go up. It’s starting to go up because so much of our manufacturing left to go over there and so they get new sources of jobs and money. Eventually their workers will start to demand more money as well and our domestic situation will improve because it’ll be cheaper to make most things over here than over there. All the while, the global economy as a whole will be better than it would have without free trade.
I personally think the biggest problem is that there isn’t enough “fair trade” where profits stay in the originating countries. The places that have benefited the most from a global economy – Japan, China, Taiwan, India and some emerging Eastern Europe countries – it’s because the majority of our trade with them is through native companies. This is as oppossed to Africa, South America and much of the Middle East where they just act as staging grounds for foreign companies. The second biggest problem is the huge amount of subsidies that Europe and the US still give to their companies (especially agriculture). I think the “solution” is to actually accelerate free trade; when there is more global parity not only will it be better from a humanitarian standpoint, it’ll also be better from an economic one.
What we need to focus on most is how to weather the two-five decade storm that will arise from this. The number one thing is to tackle the debt, because when our economy starts slowly we won’t be able to grow our way out of the interest. China WILL eventually stop buying our money and/or dumping their dollar reserves. This will cause a huge devaulation of the dollar and we need a plan. The second thing is to have social institutions in place where we can stay competitive by making unique products. These will be things that everyone needs, but require an exorbitant amount of capital to invent. To me the obvious things are biotech, nanotech and next gen energy production. The Secretary of the Treasury has actually suggested that staying out of Kyoto will hurt us economically because a) we won’t use our energy as efficiently but also b) we will lose out on selling the technology and pollution credits to emerging economies. Finally, we need some sort of system to help reintegrate people into the economy when their jobs are lost to the foreign market.
November 2nd, 2006 at 3:41 pm
What? Increasing teacher’s salaries is going to…what? I don’t get it.
Our education system needs to be private, end of story. Sorry, but the NEA & Dept. of Ed sucking up massive amounts of tax dollars is going be as useful as a turd in a fish bowl. Have you learned nother from the last 40+ years?
November 2nd, 2006 at 8:16 pm
Have to agree with Dos…. public ed is a joke, and throwing good dollars after bad isn’t going to fix it. Privatize the school system. And start by NOT hiring “tenured” teachers. Start by hiring people who can EDUCATE – whether they have degrees or not. Anyone can get a “teacher degree” (heh, yes, that’s what the local kids – male and female – call it, and they go on to point out that it’s a really easy way to make a living…. hmmm….) but that doesn’t mean s/he can teach. It means only that s/he managed to get through the coursework with a passing grade and the student-teaching quarters without blowing it.
November 3rd, 2006 at 2:32 am
So basically you’re saying that rich people who can afford private education deserve a great education and everyone else…what? Gets trained to work in the local McDonalds?
November 3rd, 2006 at 11:33 am
Sleipner, He means poor people who can’t afford to send their kids to private school get a stipend from the government to pay the fees required, instead of being assigned a public school based on where they live.
That way the rich white kids don’t get the “great education” exclusively. They go to the same classes as “everyone else.” Public funds for education are attatched to the kid, not to the school. This is the method used in many countries like Japan and Belgium, with great success.
November 3rd, 2006 at 2:31 pm
The problem is that usually the stipends the government provides only pay a portion of the private school fees, and many poorer families cannot afford to pay the remainder, not to mention the transportation problems getting the children to school every day.
Also, during the “transition period” all of the kids at the old schools get slammed even worse because all of the money is being bled out of their already impoverished schools.
Finally, the biggest supporters of voucher programs are almost always Christian evangelical types who want to suck even more taxpayer dollars into religious schools – which is illegal and immoral.