The rest of the world is growing. There was a time, after the Second World War, that when a nation was looking for industrial goods there were few options outside of the North American market. John Deere made the world's tractors, GM its automobiles. We all know the fable. Through the seventies and eighties, manufacturing jobs began to dry up as America became a pricier place to build stuff and other parts of the world had cultivated the infrastructure and knowledge base to do many of the things we were known for better and cheaper, but the American economy still grew almost uninterrupted during those decades, fighting off energy crises, financial disruptions and macroeconomic earthquakes. Into the nineties, America discovered something else it was good at: computers. Fortunes were made on this new product that no one did as well as we did. Of course there is still an automobile industry here, and of course most of the world's software applications originate on our shores, but our strength in these enterprises has undergone a pernicious implosion and nothings seems to be in the offings to take their places.
Blame it on globalization if you like. You may be right. Free trade lets others undercut anything we've ever been good at, but the fact is that without it, we wouldn't have had anywhere to sell the massive amounts of stuff we've produced over the years. There is another dimension to this problem. There is the capital investment that our nation made to become a world power, the counstruction not only of roads and powerlines, but also of some of the finest educational systems in the world. For a time, no one did it better. It was these investments, made in the context of zeal for entrepreneurship, that placed us at the center of the world economy. We could not have gotten where we are today without either of those two inputs.
The cold war created a false dichotomy in American thinking. In this thinking, economic development can be either capitalist or socialist. Many people believe that government and the private sector are mortal enemies of one another; either it is the government that strangles business from solving all our problems, or it is business that conspires to kick the little guy to the curb if he doesn't work without complaint. But we couldn't have one without the other. Free enterprise will fall apart without the investments in roads and rails, in cultivating and maintaining a healthy, educated workforce. Likewise, government as we know it was created first and foremost by business and for business; kings represented dukes who needed to agree on how to defend an area and share resources so their peasants could grow their barley and they could go on the crusades. Only later did government ever become by the people and for the people, but when it did we began not only to invest in the most rudimentary libertarian state, but in one that supported the endeavors of many, and, as it says on the nickel in my pocket, out of many we became one. We have governments in order to provide an environment habitable to enterprise and we have enterprise in order to live and to live well.
So today we find ourselves where the two humors of government and enterprise are out of sorts. Our state has ceased to invest in its people and places with the vigor that made us competitive, and our enterprise is at the beginnings of producing either inferior or non-existent products. Over the past month the world's stock market has plunged across the world as we are coming to the startling realization that the past decade's growth has been leveraged almost entirely on credit, with all production stemming from what looks increasingly like bad debt. This is really bad. We're good at spending money but we just don't make anything anymore.
The time has come for a renewed investment in our public institutions. There is nothing socialist about this. No one is calling for nationalizing industries and no one should. But government spending when done wisely can be a directed shot in the arm for industry. Sponsoring foreign engineers to come here for school, paying for schools, making sure our airports, interstate system and local roads keep goods and people moving where they need to go is a good step. Developing a large-scale initiative for the development of innovative sources of energy is something that seems like an all-American kind of project. Finding an affordable way to cover people's health needs without placing all the onus unrealistically on the individual, the small business man or for that matter, the government is another good idea. GM spends more on health care per car than it does on steel. We can fix this. We can, but we need to be realistic that these investments will take increased taxes, increased cuts in superflous or inefficient federal programs, or more borrowing. Personally, I think we can probably do a lot to make the government work better and we should, after all it's our's. I also think that given our current credit problems it's unwise to borrow another cool trillion in T-bills from the Chinese. That leaves us with one option.
At the end of the day, we may have to pay more taxes to get this right, so it's time to stop taking the toddler's mentality of "this is my money, leave me alone." Raising taxes should not be a radioactive political issue, especially in a nation that has the lowest tax take in the western world. It is selfish and realistic to think that the market will somehow magically keep our good fortune going here and that we don't have to make any sacrifices for the greater good to maintain this dream for our children. It takes hard work, yes, but it also takes cooperation to make something as vast as the American engine of productivity. As voters we need to take control of the government and enterprise that have shut us out of the discussion like children after dinner. It's time to recognize that sharing some money to do some wise things can pay off for everyone, not just the few kings and dukes who will always be able to buy their way out of our failing institutitions. This is our country, let's keep it great.
