Zakaria: “The real burden on the world and US economy”

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I cannot remember that I have ever read about any politician walking on water or making water into wine. The strange thing is we want them to do all that, see in the future, and much, much more. It is even a worse political sin when an opposition politician, one we loath because of various reasons, cannot fix the failures of political policies and a politician or politicians we admired and therefore elected and re-elected before, even when it was clear these choices were the most flawed in history. It is a human trait, it so hard to take responsibility for our own bad choices.

The last time I checked, it is not the job of the government in a capitalistic country to safe failing businesses, especially when those businesses failed because they made toxic investments with other people’s money, and the only reason they are still in business is because they were to big to fail. These scoundrels, managers, did their investments in the know that government will have to bail them out. No risk! Not only was this immoral enough that they made untaxed or low taxed fortunes, these scoundrels did not loose a penny, they made fortunes from these failures, and bestowed huge bonuses to themselves as if their management skills saved these failed businesses.

In a capitalistic society it is the function of business to create jobs. If business cannot create jobs in the 5th most competitive economy to do business then the problem is with the business people, the champions of business, and not the government, and especially not Obama.

Research and development spending has risen under Obama, but the basic trend has been downward for two decades. In percentage terms, the federal share of research spending - which funds basic science – is half of what it was in the 1950s. (Obama has been in office the last 10 years? No, he was not Bush was.) (Source)

In other words, the big shift in the United States over the past two decades is not a rise in regulations and taxation but a decline in investment – in physical and human capital. And investment is the crucial locomotive of long-term growth. In our interview, Michael Spence, the Nobel Prize-winning economist, pointed out that the United States got out of the Great Depression because of the spending associated with World War II but also because during the war, the US dramatically reduced its consumption and expanded investments. People spent less; they saved more and bought war bonds. That surge in investment – by people and government – produced a generation of growth after the war. If we want the next generation of growth, we need a similarly serious strategy of investment.

Fighting two major unfunded wars, and “t(T)he drop in human capital is even greater than the drop in physical capital. The United States used to have the world's largest percentage of college graduates. We're now number 14, according to the most recent OECD data, and American students routinely rank toward the bottom of the developed world in international tests. The situation in science education is more drastic. Even with the increase in college attendance over the past two decades, there were fewer engineering and engineering technologies graduates in 2009 (84,636) than in 1989 (85,002).
(Source)

All the above happened under Obama’s watch since Tuesday, January 20, 2009.

Last time I checked, Obama was trying to bring these wars to an end. No, these problems did not. They were bad policies by previous administrations. Obama did not export all those jobs to China. Those were business decisions.It is called globalization and free trade. In my opinion, one must get business people to live up to their part of the social contract if we want the world economic problems fixed. If business people can make it big in a socialist country like China, then the question is what is wrong with the business managers in the rest of the capitalistic world?

Uit: Zakaria: The real burden on the U.S. economy

Greetings,

Christoffel

 

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