Photos from my recent visit to the Air and Space Museum in Washington, D.C. The power of technology in the United States is absolutely amazing, and in the case of the Enola Gay, pictured above, frightening. We need as many young people as possible to come to places like this and to be inspired to create the next big thing.
This was a great interview on MSNBC’s Morning Joe! America’s best days are still ahead of us.
Our economy is evolving, just as it evolved in the period after 1963, when it changed from a highly unionized economy to become the world’s most creative services economy, with little unionization, attached to a manufacturing economy with soaring rates of productivity growth and negligible employment growth. Just as little fishies evolved out of the oceans, grew feet, and went to work on Wall Street, our economy is evolving now and we are creatively adding new capabilities.
My interview on Yahoo’s Daily Ticker with Aaron Task about Unleashing the Second American Century. We discussed five myths about the U.S. economy, which has stirred a lengthy debate on Yahoo! Finance.
Much has been written about the decline of the U.S. as a world leader since the financial crisis. But despite relatively high unemployment and a widening income gap between the rich and everyone else, growth is accelerating, debt is declining and the banking sector is relatively healthy.
Economist Joel Kurtzman, who is also a senior fellow at the Milken Institute, says America is not in decline and actually on the verge of resurgence.
The author of the new book Unleashing the Second American Century: Four Forces for Economic Dominance, Kurtzman cites “four transformational forces” that will lead that to resurgence: tremendous creativity—“we produce more new ideas … than any other country” — tremendous energy reserves, reserves of capital and a re-shoring of manufacturing.
He visited The Daily Ticker to dispel five major myths about America, as you will see in the video above.
Myth #1: America is broke
America’s private sector is in better shape than it’s been in years, and the American consumer is healthier than she or he has been in the past 35 years, says Kurtzman. “On the private side of the balance sheet America is doing just fine,” says Kurtzman. The public side is another story, but it’s improving. The money America uses to pay its debt has been declining as a portion of GDP every year, “and it’s very manageable,” says Kurtzman.
Myth #2: High unemployment rates are here to stay
Kurtzman says the high jobless rate is concentrated in people without a college education and those under 25. The unemployment rate for someone over 25 who’s college educated has held steady at around 4%.
Myth #3: China is ascending while America is declining
"China is coming of age at probably the worst time in history for a country that wants to be a manufacturing power," says Kurtzman. China’s strategy involves having 200 million people a decade working in manufacturing, says Kurtzman. "They can’t accommodate that," says Kurtzman. The U.S., meanwhile, has moved from a manufacturing-centric economy to a service-focused one—a transition that China will eventually have to make, says Kurtzman. "That will be very difficult for them."
Myth #4: America is a spent power
Kurtzman says the U.S. is in a great position for growth because it remains the world’s leading military and manufacturing power, has trillions of dollars in capital to deploy and is now less dependent on imported oil given the development of its own energy reserves.
Myth #5: America doesn’t make anything anymore
This is simply not true, says Kurtzman. America is the dominant manufacturing power in the world if you include what we make overseas. But if you just look at just what we make in America, we make 20% of everything produced. That’s about the same as China but China makes low value-added products such as towels and clothing. We make airplanes, radar, turbines — the big expensive stuff.
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Video from my interview on MSNBC’s The Cycle about the direction of the U.S. economy and my new book, Unleashing the Second American Century: Four Forces for Economic Dominance.
Crowdfunding in Perspective
Trailer for my latest book, Unleashing the Second American Century: Four Forces for Economic Dominance
An Updated View of Thought Leadership
Columnist David Brooks, writing on Dec. 16, 2013, in The New York Times, took on the topic of thought leadership and didn’t like what he saw. He wrote, “The Thought Leader is sort of a highflying, good-doing yacht-to-yacht concept peddler.” He further wrote that “Not armed with fascinating ideas but with the desire to have some, he launches off into the great struggle for attention.”
As the person who, rightly or wrongly, is credited with coining the term thought leader, I agree with Brooks.
In the mid-1990’s, when I used the term to describe people I interviewed for the publication, Strategy + Business, which I started for Booz, Allen & Hamilton, the consulting firm, the people we selected really were original thinkers, largely in economics and business, with important ideas. Among them were the following: Stanford economist, Paul Romer; the Santa Fe Institute’s Brian Arthur; the late C.K. Prahalad, a strategist from the University of Michigan; British social and business philosopher, Charles Handy; Harvard’s Howard Gardner; and others.
Parting Thoughts: The Essence of Combacks
Europe is arguably the biggest comeback story in modern times. In the aftermath of World War II, amid rubble, rationing and lingering enmities, a group of visionary leaders built an organization — the European Coal and Steel Community. That organization, launched in 1951, evolved into the European Union decades later. The European Coal and Steel Community was the first of many steps leading to Europe’s resurgence as an economic and technological powerhouse, and as a stable political entity.
What’s so interesting about this story, and reflective of all successful comebacks, is that the resurrection was an improvement on what preceded it. Before the European Union, the Continent was divided into nation-states, guarding their sovereignties and vying for political and economic power through constantly changing alliances. After the E.U., Europe is a strong, stable, partially integrated community of states that have voluntarily surrendered some their sovereignty for the greater good. The present is based on, but transcends, the past.
Sometimes, science truly does come from the classroom. NASA is working with a creation similar to a design used in the popular egg drop contests used in science classes throughout the world to create a possible new rover for Mars or other unmanned explorations.
We spend 18 percent of GDP on healthcare (advance country average is about 8 percent) and have about the same life expectancy as Cuba.
The Cleansing Effect of Recession
Commentators rant about the sorry state of the economy, and bloggers pile on. But a funny thing happened on the way to our decline. The economy recovered and is poised for a long period of above average growth. We’re seeing some of that now with GDP growing 3.6 percent in the third quarter of 2013.
As difficult as recessions are – and the 2008 recession was a doozy – they also have a cleansing effect. In the case of the last recession, all that pain and suffering did three things: 1) It enabled corporations to renegotiate their debt on much better terms; 2. It moved debt off of private balance sheets and onto the government’s balance sheet; 3. It reduced substantially the amount of money households spend servicing their debt, providing consumers with greater purchasing power.
As the chart below shows, the share of a household’s income that goes to paying off debt is at a 30 year low. In fact, the share of income going to pay off debt is less than during the Clinton years, when the economy boomed, unemployment was low, and growth was strong. And, it’s more favorable than during the Reagan years, about which so much has been written.
Two Kinds of Unemployment
I’ve often thought having a single category for the unemployed is a mistake. It implies making money and work are the same thing. They’re not.
A poet may spend months writing a poem that moves or even inspires but receive no money for it. An artist might paint for years, without a single sale. Actors, writers, photographers, and others, are vital to society. But few of them can support themselves, at least at first. They work for short spells in jobs they hate, get laid off or quit, and live on what they’ve saved. Or, if they qualify, they get unemployment insurance so they can work at perfecting their craft. It’s a well known pattern that recognizes work and money are not always the same thing.