Sunday, January 11, 2009

The Gathering Storm: What Economic Stimulus?

Soon, a new President and an anxious Congress will pour another trillion dollars into tax cuts, infrastructure, highways, mass transit and new energy systems, and whatever ... to "stimulate" the U.S. economy. But most economists who have weighed in on the subject don't believe another trillion dollars will do anything to bring us out of recession. They note that the big public works projects of the 1930's did not bring the country out of the Great Depression -- it took a war in Europe to do that. And, in case anybody missed it, sending $350 million to Wall Street hasn't done anything but bail out investment bankers -- who are part of the problem, but not the solution.

Today, New York Times op-ed columnist Thomas Friedman observed "If we spend $1 trillion on a stimulus and just get better highways and bridges — and not a new Google, Apple, Intel or Microsoft — your kids will thank you for making it so much easier for them to commute to the unemployment office or mediocre jobs."

"... a bridge is just a bridge. Once it’s up, it stops stimulating. A student who normally would not be interested in science but gets stimulated by a better teacher or more exposure to a lab, or a scientist who gets the funding for new research, is potentially the next Steve Jobs or Bill Gates. They create good jobs for years. Perhaps more bridges can bail us out of a depression, but only more Bills and Steves can bail us into prosperity."

Friedman's op-ed piece makes the point that the U.S. educational system is seriously in the toilet, and particularly so in its failure to attract students and teachers into science and engineering careers. He urges the politicians to read the National Academies' 2005 report, "Rising Above the Gathering Storm: Energizing and Employing America for a Brighter Economic Future," published in book form in 2007. Friedman goes on to say:

"Gathering Storm was the outstanding 2005 report produced by our National Academies on how to keep America competitive by vastly improving math and science education, investing in long-term research, recruiting top students from abroad and making U.S. laws the most conducive in the world for innovation. You see, even before the current financial crisis, we were already in a deep competitive hole — a long period in which too many people were making money from money, or money from flipping houses or hamburgers, and too few people were making money by making new stuff, with hard-earned science, math, biology and engineering skills."

"The financial crisis just made the hole deeper, which is why our stimulus needs to be both big and smart, both financially and educationally stimulating. It needs to be able to produce not only more shovel-ready jobs and shovel-ready workers, but more Google-ready jobs and Windows-ready and knowledge-ready workers."

Here are some quotes from the Executive Summary of The Gathering Storm.

"If you can solve the education problem, you don't have to do anything else. If you don't solve it, nothing else is going to matter all that much." former Federal Reserve Chair Alan Greenspan.

"We go where the smart people are. Now our business operations are two-thirds in the U.S. and one-third overseas. But that ratio will flip over the next ten years." Intel Corporation spokesman Howard High.

"If we don't step up to the challenge of finding and supporting the best teachers, we'll undermine everything else we are trying to do to improve our schools." Louis Gerstner, former Chairman, IBM.

"When I compare our high schools to what I see when I'm traveling abroad, I am terrified for our workforce of tomorrow." Bill Gates, Microsoft.

You can download a pdf copy of Rising Above the Gathering Storm, for free, on the National Academy of Science's website. Read it ... but you may be frightened by what you learn.

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