Back in April, Stephen Moore wrote about the fundamental economic challenge facing our nation. His title and subtitle explain the core issues:
We’ve Become a Nation of Takers, Not Makers
More Americans work for the government than in manufacturing, farming, fishing, forestry, mining and utilities combined.
It isn’t just government. I’ve been told that here in Rhode Island there are more people working in nonprofit organizations than for profit businesses. We should also consider all the folks collecting social security, welfare or one form or another of government support, as well as all the businesses that subsist on government contracts and subsidies. And numerous private sector jobs are obviously questionable in terms of adding fundamental value to our society. It is truly amazing how many folks our society has to support that aren’t engaged at all in producing the goods we all consume relative to those who do help grow and make things.
Of course our domestic makers don’t do it alone. Makers in other countries are providing most of the manufactured goods we consume in the US as well as many of the raw materials. And we are paying for it all with massive unsustainable levels of private and public debt that will eventually have to be repaid through our own productivity as a society.
We live in an interconnected global economy and as a nation we have to produce goods and services for trade in order to pay for the goods and services we import and consume. Because our nation consumes so much more than we produce, we are experiencing unfortunate realities like real wages stagnating for the last forty years and declining recently.
I do not mean these comments to question or negate the value of the work of people who work in government, in non-profits or in industries outside those that directly produce the goods we consume. Nor do I suggest that we should be less compassionate to retired folks or others who depend on government support. These days I am working in the heavily subsidized field of solar energy and would definitely have to be counted as a taker myself when it comes to our national balance of trade.
We need to recognize that our economy is in the worse crisis since the 1930’s because the path we have been on is completely unrealistic and unsustainable. We have to be more self sufficient as a nation and create more value for export. We can’t possibly keep borrowing to fund consumption without increasing our production. We simply can’t afford to support so many people in our society who don’t help make all the stuff we consume. If we want a healthy economy, we need far more makers.
Moore’s comments on productivity are particularly important. His conclusion might be help point the way toward meaningful solutions in the unemployment debate that politicians in Washington are poised to enter next week:
President Obama says we have to retool our economy to “win the future.” The only way to do that is to grow the economy that makes things, not the sector that takes things.