Comfort can be good. For the first time we began to seriously consider that we as a nation, were wealthy enough to ensure that no American should ever starve.  But that comfort also brought new challenges. I believe it is in that comfort we started to lose focus on how we gained our wealth.  I think we got soft and in some ways lost an essential part of our national identify.

6.  We began to say, ìIt's OK if we don't make the best steel.  It's dirty, low wage work anyway.  We will import steel and build great cars.î

7.  We said it's OK if we don't make fuel-efficient cars, tanker ships or even passenger trains.  The new wisdom was that, our labor costs are too high anyway.  We'll focus on high margin products and source heavy labor, low margin products and technology from Japan and Asia. With their new cash, we can sell them high technology robots and computers.

8.  We then started to say it's OK if we don't make computers in the US.  It's commodity equipment requiring low wage work anyway.  We'll make computers in Asia and sell the world our semiconductors.

9.  Then we even said it's OK if we don't make semiconductors in the US.  We figured we would fabricate chips in Europe and Asia. American jobs would still be OK because of the the higher wage technology work that designs chips and software.

10.  Today we say it's even OK if we don't even grow information jobs in the US.  “We'll just outsource software to India and Eastern Europe and own the companies that take advantage of their low cost labor.”

11.  And here we are today.  

12.  We wonder how our financial institutions can have paper values of billions of dollars, and then seemingly go out of business overnight.  We wonder what happened to all those good jobs we used to have in Ohio, Pennsylvania and the rest of our union.

13.  We wonder how the United States got in the habit of borrowing to pay our bills.  In the last few months, the US has borrowed to stimulate our economy, borrowed to pay for our military efforts overseas, and yes, borrowed to bailout troubled companies.  

14.  We wonder why our Executive Branch, that must borrow one to two billion dollars ($1,000,000,000 USD) each and every day to fund our deficit spending, no longer asks us to buy American products. instead, we are encouraged to keep the economy strong by purchasing goods that create millions of jobs in the lands of our lenders.

15.  So here is what I've been reluctant to say ...
what no politician wants to say ...
but deep down, I believe we all know ...

16.  That our nation’s strength is declining ... our jobs, our economic wealth, our power and status in the world ... for the simple reason that we don't produce nearly as much as we consume.

17.  And until we, as citizens of this country wake up ...  and engage our businesses and citizens in producing here, much more of the goods the world and our country needs ...  then our country's greatness and our place in history may be at risk.

18.  Now, you may be thinking, "If the only way to get out of this mess is to produce more in America, then we are in real trouble.î

Don’'t you know US wages are too high?î
Don'’t you know that in a global economy we will never again be able to compete with low wages around the world?

19.  And now we get to the reason I decided to address you today.  I think the knowledge that we as a country must produce more to compete and to survive has been in the backs of our minds for some time now.  

20.  I think many of us started getting worried when steel mills began closing in the 70's and grew even more worried as decade after decade, in market after market, we simply punted and listened as our country's leadership said,
We just can’'t compete.
ìThose jobs are never coming back.î
ìIt's OK, globalization is a good thing.î

21.  Deep in our hearts, we knew something wasn't right.  We knew that building a car and watching a computer grill a burger were not equally important to our destiny.  Even if we hadn't read Adam Smith's "The Wealth of Nations."  We began fearing that as markets spread our jobs around the global economy ... that if we didn't somehow produce as much in our farms, factories and skyscrapers as we consumed in our malls, homes and on our plates that someday we would simply run out of money.

22.  But as Roosevelt once said, "The only thing we must fear is fear itself."

23.  I believe that if we face our fears, and carry them into the light of day, this country will see them for what they are ...
just a few additional challenges that are neither too tall or beyond our capacity as a people to address ... one day at a time.

24.  So let's talk about a few of our deepest fears:

Fear #1

"We owe China, Japan, the Middle East and other countries trillions of dollars.  If we start saying we will begin a concerted effort to educate our children and make more products in America, they will just stop investing here and will make our debt problems even worse."

Light of Day Answer:  "This won't happen.  The reason goes back to the fundamentals of the global economy.  The US provides brains, natural resources and consumers important to the global economy.  We also provide the backbone for the global economy, one that has worked since the concept of globalization was little more than a dream.  A healthy US helps other economies grow.  Also, a healthy US will pay back the trillions owed.  Foreign countries won't stop investing in the US if we start growing our economy ... but they most certainly will stop investing here if we don't.

Fear #2  

"We can't complete with low wage countries like India.  A contract software developer in India costs a third of an American programmer."

Light of Day Answer:   "It is true that programmers in India cost less, but it is not true that America cannot compete.  Let’'s look at what really happens when a company needs an information worker.  Let's assume your company needs a junior programmer.  You can either contract a programmer in the US from a company like IBM for $150 per hour, or you can hire a programmer as an employee in the US for about $60 hour, or you can contract a programmer in India for $20 hour.  

The problem facing America is not that we don't have several million young adults willing to work for $20/hour which equates $40K per year.  

The problem is that unlike their counterparts in India, our young people don't have (in quantity) the engineering degrees and other skills needed for these jobs.

That's why it is essential that we ensure our people can afford and attend college, and that is why I have proposed that after a student receives a degree made possible with government and/or private sector assistance, that the student pay in part for that education by working in an essential high demand, military or national service job.

Fear #3  

"Even if we can reclaim the information work, we can't competitively make steel, trains, ships, computers, toasters or other similar products."

Light of Day Answer:  "First, we can and DO make great steel, large powerful ships and super fast computers ... but we make far less in the US than we should.  I think part of the problem is a lack of leadership ... leadership that helps US consumers and businesses understand the true cost of abandoning markets leadership that invests in infrastructure and development zones that promote innovation not only in new products, but innovation in how we cost effectively make those products and complete with the global market."

25.  If we don't face the fundamental issues of competitiveness and production in this country, then I think we are deluding ourselves about our prospects.  If an inventor in PA is able to find an engine maker in Shenzhen China easier then an idle worker in New Jersey, we have a problem.  If we don't make skills a priority such that our children see the importance of learning about engines, metal work, plastics, glass and ceramics, we have a problem.  If our children don’'t study engineering and science in our colleges, we frankly will not be able to produce the green, sustainable products that will drive our job growth in the future.

26.  Let me be clear.  I believe the short-term efforts we are taking to stabilize our economy must succeed.  I also believe that our long-term success as a country requires our full participation in the global economy.  But I also believe that my most important task as your president may be to return this country to the basics, ... to provide a focus for young and old alike on education, innovation, and production such that this country again pays its way in this world.

27.  You have often heard me predict the road ahead will be difficult.  Unfortunately, the current economic crisis is working to ensure that this prediction comes true. But do not be dismayed.  Yes, it may be that our young people will have to study more.  Yes, it may be that new couples will need to save longer before purchasing that plasma television.  And yes, it may be that as consumers we must all need to start looking for the “Made in the USA” label again.  But I believe that our shared commitment today toward facing these challenges will ensure a better tomorrow for our children.  I also believe that our efforts to overcome this crisis will make this country not only stronger and more prosperous, but may provide a new sense of purpose for generations to come.
 
God Bless

Tags: Politics, Economics