Zera's Blog

A Citizen's View from Main Street

Have We Really Seen This Recession Before?

People keep comparing this recession to past recessions here and in other countries. Other debates argue about what policies worked or failed. But how valid are the statistics and assumptions of the past, when applied to today?

After WWII, we were still a creditor nation. THE creditor nation. Our debt was held domestically. We are now THE debtor nation. Interest payments on the debt now leave our economy, not reinvest in it.

We had the largest undamaged industrial capacity, countries in need of rebuilding, and a trade surplus. Now those countries have been rebuilt, regained their economic independence from us. We are shipping manufacturing capacity off-shore, further weakening our economy. China has replaced us as the economic Titan of the world. The trade surplus has turned into a deficit that undermines the economy even more than budget deficits.

We benefited from the “Brain Drain” of German scientists and engineers, to achieve technological supremacy. The new brain drain has worked against us. We have educated the rest of the world to our level. We have exported our tech base along with our jobs. We have driven some of our best and brightest overseas through lack of research funding. Companies are calling for more H-1B visas with the claim that we no longer have the experts their companies need. Our education system has fallen far behind much of the rest of the industrialized world.

All the economic advantages we held during the Cold War have been erased by globalization and excessive conservatism. Continue reading

August 5, 2010 Posted by | Budget, Capitalism, Direction, Economics, Labor | , , , , , , , , , , , , | Leave a comment


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