The Betrayal of American Prosperity

A colleague recommended Clyde Prestowitz's The Betrayal of American Prosperity.  I got it from the library and finished it last night.  The book isn't that long, but I could only read about 20 pages before I got too mad.  I don't want to give away too much of the book, but Prestowitz presents some convincing arguments as to why the US is no longer competitive and why we're in trouble in the future: loss of manufacturing jobs, unilateral free trade and letting "national security" drive every policy decision.

Rather than go into the reasons why the US is up a creek, I'd rather present some of my own solutions, many of which are inspired by Prestowitz.  I highly recommend his book and believe it will spur you to action.

1. Energy independence
Roughly half of the US' trade deficit is due to importing oil.  We have become utterly dependent on cars for our everyday lives.  It made sense back in the day when the US had 70% of the world's oil supply to use gasoline for fuel, but it makes no sense now.  Gasoline engines are bad for the environment and put us at the mercy of foreign dictators.

My solution is for the federal government to increase the gasoline tax by $2-3/gallon.  This extra money will discourage driving and can be used to fund homegrown alternative energy solutions including all electric cars.  I'm not talking about buying solar panels and wind turbines, but buying American solar panels and American wind turbines.  I want the clean tech manufacturing jobs to come here.  If these industries don't exist, then we need to build them.

Converting all cars to electricity will put a severe strain on the grid as it is so we need to build more power plants, but they should be nuclear (not that dangerous if done correctly), wind, geothermal, solar, etc.  We should also upgrade the grid to eliminate waste.  If people use solid state lighting (another potential industry for US manufacturing), we can "produce" the extra juice needed for cars via conservation.  I guarantee that most of us use a lot more energy than we need to and believe the government should subsidize energy audits.

The next hurdle is to create an efficient battery without toxic heavy metals.  A Prius is no better for the environment than a Hummer because of the lead acid batteries in the Prius.  The US needs to heavily invest in advanced batteries.

2. Greatly reduce our military
We don't need to be the world's policeman and we can't really afford it.  Steaming around the world uses a ton of fuel which goes back to point number 1.  If we're involved in fewer conflicts then we can have a smaller military which will use fewer resources.  We can still be badass and should still maintain an army large enough for self defense and for contributing to UN peacekeeping missions.  I no longer want to read about Americans dying in Iraq and Afghanistan for no frickin' reason.  Saddam and Bin Laden are both dead so it's time for us to get the fudge out.

3. No more unilateral trade agreements
It's hard for the US to compete when we have 5% tariffs on Korean autos, but they have 10% tariffs on our autos.  The WTO allows tit-for-tat so let's use it.  We don't have to be the whipping boy for everyone.  They want to emulate where we were after WWII so let's lead by example.  They'll still be our "friends" even if we take them to court for patent infringement or product dumping.

4. No more technology giveaways
Many countries require technology transfer as a condition for building a manufacturing center.  A lot of cool stuff is invented in the US, but then we turn around and give it away.  Why are we in the business of enriching our competitors?  They're welcome to license or buy our technology, but shouldn't we try to produce it here? Don't give me that efficient market or comparative advantage line because those theories are dead.  Most foreign governments strategically subsidize industry which distorts comparative advantage.  Think of all the products made in Japan or Germany.  It's not because they have the lowest labor costs.

5. No more shortsighted politics
American politics is "corrupted" by special interest money which means we have no plan other than to enrich the donors to politicians' campaigns.  We can reduce the impact of lobbying by limiting donations to natural citizens (not corporations), moving to public financing and/or shortening the campaign season.  Let's get back to debating real issues and not about long birth certificates.

Many countries have former engineers as their leaders so they tend to have long term vision.  Can you honestly say the US has a vision to do anything beyond next year?  Crazy.  Let's get fewer lawyers and economists in politics and get a wider sampling of Americans to bring in some fresh ideas.

And for frak's sake, stop buying the cheapest thing.  You're putting yourself and your kids out of work.  Start buying American whenever possible.  Actually start buying less overall and start saving more.  We all have way too much crap, me included.  I need to make a conscious effort to reduce my spending since I have plenty of gadgets and gizmos.

I encourage everyone to save more and to buy US Treasury Bonds to reduce debt ownership by foreigners.