Our McFuture

The China Olympics are thrilling to watch.  Our whole family gathers nightly around the sacred tube and cheer our brains out.  It’s a lot of fun.  Viewing China in all its new material glory is also interesting even as Russia invades independent democracies in an apparent attempt to bring back Soviet Union 2.0.  What makes this more remarkable to me is how quickly we as a nation have squandered our power and influence, so today we can do little more than contrast our declining real estate values, growing underemployment and exhausted military with the newly muscular Russia and the wildly successful Chinese.  What irritates me is not so much the rise of others as the ridiculously bad leadership we’ve had for decades that have pushed policies that have led us to a time where for the first time in our history, most Americans don’t believe their children will have as high quality of life as they do.  Yuk.

Our decline simply is due to many insanely bad choices, some of which are intentional.  Our trade policies with China allowed them to keep their currency low making their labor and their imports unrealistically cheaper than anyone can compete with.  We also allowed them to pirate, rip-off, and steal decades of technology and research we paid for to automate their factories for free.  Meanwhile we refused to seriously reeducate our manufacturing workforce in the engineering and technical skills they needed to operate 21st century factories.  We could have chosen a different path.  Germany has lost only 2% of its manufacturing jobs in the past 20 years.  They are the largest exporter of advanced technology products in the world.  And they have the world’s best paid manufacturing workforce.  It’s pretty simple.  Businesses can afford to pay employees well if those employees are producing high economic value.  This takes education and a culture committed to excellence.  A few American companies still have that.  When labor is educated and united with high technology it becomes extremely productive.  Nucor Steel comes to mind.

Perhaps our core problem is that our leaders value money more than people.  Ever since the 1960’s when inflation was blamed on high, unproductive labor costs the drive to find the cheapest labor in the world has been relentless.  In fact, real labor rates in the U.S. have not increased in the U.S. since 1979.  Yet nearly all inflation since 1980 has been due to financial manipulations flooding our economy with cheap credit that makes prices rise or our “benefit the big boys” energy policy.

My point is that China’s rocket-like growth and our continuing stagnation was not inevitable.  It was all a choice based on a worldview that there is money to be made from strip mining the core strength of our nation’s future by creating a consumer economy instead of a productive one.

So what now?  First, we have to quit looking at labor as the source of cost and view it as a source of value creation.  Second, we have to create a much more efficient educational infrastructure of life-long learning emphasizing the skills of science, technology, engineering and math.  This doesn’t require full college degrees; it requires hand-on applied skills of these four emerging sources of value creation.  Third, we must stop countries from stealing our secrets.  Fourth, we need leaders who have a vision of re-enthroning a productive economy based on invention, innovation and excellence rather than a future economy based on Wal-Mart and McDonald’s employees selling junk to each other.  None of this will happen on its own.  It’s all a choice.  It’s all a choice we should demand.

To visit American Dream Project’s homepage, click here.

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