I am not overly concerned about the continued economic strength and position of America. Thomas Freidman, one of our great thinkers, is still bullish on America, so who am I to be otherwise. But he is constantly warning us, as it relates to our economic position and strength in the world, to stay alert and be aware of developments in the world around us. Freidman would agree with me that America has some real, critical, and structural economic problems to attend to.
First, Americans have attitudinal problems related to consumption versus production. I am not referring to the fact that there are too many people in the cart and not enough pulling it. I am referring to the fact that for too long, a large percentage of Americans have purchased goods they did not need, with money they did not have. I sense that changing. But since so much of our economy is based on consumption (and credit), this, while somewhat positive, has big implications for our economy.
In addition, our annual trade imbalance exceeds $40 billion (we are buying $40 billion more in goods from the world we are selling to the world). What are we going to produce and manufacture in the future that Asians are going to continue buying (and buy more of)? In China, students study engineering, science, and technology. 27 million Chinese students are in technical school and technical college, the most in the world. American students study sports management, journalism, and the humanities.
Americans have not produced equal to their consumption for quite a few decades. We should be thankful that we have lived in the era of the microchip, the Internet, the personal computer, and other technological advances which have exponentially increased productivity. But where is the next wave of productivity coming from? What sector? What product or invention? What ideas? What world event?
Peggy Noonan, in an excellent Wall Street Journal opinion piece this week, talked about how Americans, for the first time, no longer assume that their children will have it better than they did. This is a huge departure from the past, she points out. This country was born on the idea that the next generation would always have better lives than their predecessors. "That was what kept people pulling their boots on in the morning after that first weary pause: 'my kids will have it better." Parents now fear something has happened. They are not sure what. Neither are top investment people and top economists.
The income gap between the upper and lower socioeconomic groups is widening at an unprecedented pace. Political leaders seem to have very little sense for the fear, the uncertainty, the pessimism that people are feeling deep down. There seems to be a detachment, a growing gulf, between America's thought leaders, and those living normal lives on the ground in America. This is very disconcerting to everyday, struggling Americans.
This sense of pessimism and powerlessness among mainstreet Americans, combined with major structural economic problems, is not a good place for America to be. I have confidence in the intelligence and ingenuity of America. But it is interesting to remember........the concepts and precepts on which America is founded are still experimental.