|President Barack Obama greets staff of Council of Economic Advisers for a group photo in the Rose Garden of the White House, March 27, 2013.
Dr Peter Morici: Easter is a
celebration of springtime rebirth—a good time to enumerate reasons for optimism
and the tasks necessary to accomplish America’s potential. The US economy
is in renaissance. The wrenching recession and halting recovery have masked a
major restructuring ignited by technology and good-old- fashioned market forces.
toys have become a powerful competitive advantage.
The modern office
and consumer technology industries—which began with programmable typewriters,
clumsy dedicated word processers and TV-set ping pong—have blossomed into
enormously-powerful and highly-portable computers, smartphones and more
specialized devices for industrial automation and supply chain management. These
promote transparency in pricing, accelerate the movement of goods and services,
and make nearly anyone who would like to be a global purveyor of ideas and
become millionaires, because the traditional barriers to developing and
commercializing new ideas—access to up-to-date knowhow and capital—have been
greatly reduced or removed. And the commercial applications of new technologies
are quicker and dramatically more scalable, at much lower cost, beyond the
imagination of entrepreneurs 50 years ago.
revolution has unleashed a new bounty of natural gas. It won’t fully free us
from dependence on foreign oil, but it has some potential to substantially
reduce that dependence, and instigate dramatic new growth in heavy
industry—metals, petrochemicals, fertilizer, durable goods, and fuels.
imports, net of exports, about 6.8m barrels of oil a day—much of it from
the volatile Middle East and other unstable places around the world.
compressed and liquefied gas technologies—many already in trial use—have the
potential to replace about 2 to 3m barrels a day in big-city taxi and
fleet transportation, rail transportation, inter-costal marine and Great Lakes
shipping, and inter-city trucking on the East and West Coasts and within the
industrial Middle West. Extending those technologies to even limited personal
automotive use could slice oil imports by nearly half.
rubble of the recession, US manufacturers, which already enjoyed the highest
productivity in world, have widened that gap. They have created smart factories
that have converted the abovementioned technologies into automated material
handling and supply chain management to dramatically decrease labor use.
Along with those
enhancements, the re-pricing of American labor—as disparities in wages and work
rules between unionized and other workers have been reduced—have robbed from
Asia much of its cheap labor advantage. Insourcing is now the big word in
exports remain. Important are the undervalued yuan and yen, high tariffs and
regulations that keep competitive products out of big Asian markets, and
government subsidies that make foreign products artificially cheap on US store
shelves, but some of US disadvantages are self-inflicted—among these are
regulatory barriers that make putting up factories more difficult and time
consuming than in Asia and higher taxes on business.
needs smarter policies to translate the bounties of technology and inexpensive
energy into broader, more rapid economic growth and rising real incomes for
middle class families.
reviews in manufacturing must be streamlined and accelerated. Government needs
to subject environmental protection to the same efficacy standards that the
market applies to commercial technologies—we need environmental protection but
it must be delivered cost effectively and quickly to add genuine value.
America has some
of the highest taxes on corporations and small businesses in the
world—especially considering that businesses are still expected to foot much of
the nation’s health care bill—and too many investment decisions are made to
minimize taxes as opposed to creating economic value.
Tax reform that
shifts gifted human resources from gaming the tax system to making stuff is
Finally, it would
be folly to use the bounty of natural gas for quick profits through unbridled
exports of liquefied natural gas to Asian economies that subsidize energy use in
manufacturing and other commercial activities. Americans would see that gas
returned, incorporated into artificially cheap products on US store shelves,
displacing US jobs and slowing recovery.
Strategically reserving natural gas for truly competitive domestic uses in
transportation and industry could easily create another three million jobs, and
would knock one or two percentage points off unemployment.
other barriers posed by inefficient regulatory and tax systems could keep the
economy growing robustly and at full employment for the next generation.
Professor, Robert H. Smith School of Business, University of Maryland,
College Park, MD 20742-1815,
703 549 4338 Phone
703 618 4338 Cell Phone
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