Bill Gross is a prominent California based money manager who oversees the management of $1 trillion in investment securities. He has just published a timely commentary on what ails America and how we are failing to address the serious competitive issues facing us globally.
Although a bad idea, at least in my opinion, Gross wants greater government involvement for the next few years to address our competitiveness issues. While I disagree with his prescription for bigger government, even temporarily, his argument about the lack of American competitiveness is on the mark and must be addressed.
(My view is straightforward about the role of government in economic matters. I agree with what President Reagan said that government isn't the solution to our problem; it's our problem.)
Nevertheless, Gross makes a strong case that we have a long term structural as opposed to a temporary cyclical unemployment problem. Unfortunately, it's due in large part to our relatively high paid and low skilled American manufacturing work force. In simple terms, we largely lack the required technical skills required to compete in today's global environment.
Accordingly, our competitiveness issues are long term in nature and will take years to solve, even if we do all the right things to solve them. And eliminating deficits and balancing the budget, while quite necessary, won't bring sorely needed American manufacturing jobs back. The commentary is titled "School Daze, School Daze Good Old Golden Rule Days".
In arguing that our work force is too expensive and poorly educated for today's global marketplace competition, Gross says that "we are left untrained, underinvested and overindebted relative to our global competitors." Accompanying that debilitated condition is that a college degree today is in not a ticket to success, since many of our graduates lack the necessary educational and technical skills to compete in the world market. As a result, manufacturing companies will continue to invest "over there" where it's less expensive than "over here".
Finally, U.S. employment based on real estate and related asset appreciation/finance isn't anytime soon, if ever, going to be the job producer it was until the real estate related bubble burst in 2008.
As a result, we need a manufacturing renaissance to restore American competitiveness and create the necessary employment for Americans. And that will be both a serious and difficult problem to solve. In sum, Gross presents a sobering point of view that can no longer be ignored.
It's time we as a society look closely at the future and how we restore American leadership in education, technical skills and our "lost" manufacturing jobs.