Barack Obama: The Audacity Of Hope. Chapter Five: Opportunity; Part Two. Solutions For The Future: Education, Science and Technology, Energy Independence, Infrastructure and Health.
With the advent of a complex industrialized society government was needed not only to invest in but also to regulate the economy.
Financial markets grew exponentially and the products they sold could be a two edge sword. They were a necessary method of raising capital for business expansion and they also provided a way for the average person to have a stake in the economic life of the country by stock purchases. However the down side was that stock prices could be manipulated by dishonest operators. The value of a company could be distorted by fraud or the average investor could be disadvantaged by insider information. To make the stock market more efficient and free, President Franklin Roosevelt created the Securities and Exchange Commission to regulate stock market activity.
Also while our industrial economy was based on free market principles other regulations were needed to curb illegal activities to protect American consumers such as the Pure Food and Drug Act, the Meat Inspection Act and the Federal Deposit Insurance Corporation to name a few.
The government also is needed to invest in areas where the private economy is unwilling (i.e. The Tennessee Valley Authority or rural electrification) or unable to invest (i.e. the national highway system).
The free market also needs reasonable regulation to avoid bubbles and other glitches in the system.
With the rise of giant businesses came the need for unions to represent the interests of labor. Government recognized and regulated Labor and government participated in creating humane working conditions with adequate compensation and benefits. The result: a large and viable middle class, the corner stone of Democracy.
Also the government created the Unemployment Insurance System to ease the ups and downs of the business cycle and the creative destruction of Capitalism. Obliviously workers had to eat and children had to be cared for while adjustments in our free market economy took place.
Many of these changes took place because of the Great Depression. President Franklin Roosevelt faced with the specter of the rise of Communism, Socialism and Fascism in Europe spearheaded these changes and can be credited with our country remaining a Capitalistic Democracy while other countries became Fascist dictatorships, toyed with adopting Communism or became Social Democracies. Thus social changes were needed as a result of the disruption caused by the Great Depression and the propensity for wealth to accumulate disproportionately.
These things helped in the past but the World is not standing still. New challenges like Globalization and technological change now face us. Capital migrates to where it is most useful; many manufacturing companies have left the United States in pursuit of cheap labor. Heath care costs keep rising and we continue to import far more that we export.
Republicans believe lower taxes, less regulation and a smaller safety net will solve our problems. Solutions they gained in the Eighties. Democrats are trying to preserve the gains they made during the New Deal. Unfortunately none of these solutions by themselves will work anymore. We cannot compete against India and China by cutting taxes, eliminating regulation and without a social safety net or else we would end up with smog choked cities polluted rivers and people begging and dying in the streets. That is not the America we want for ourselves or our children.
Lincoln once said,”We will do collectively, through our government, only those things we cannot do as well or at all, individually or privately.” In other words we should be guided by what works.
Some government investments that can make us more competitive in the Global Economy are: education, science and technology, infrastructure, health care and energy independence. Throwing money alone at these things alone will not work.
In education the parents as well teachers and pupils must be motivated and pupils in particular must be able to see that, if they study hard, a good job and a better life will be their reward. However sticking to the same old system with its protections for the people in charge and no accountability for student improvement will not work.
Obama sees that making education work for everybody is a principle way of making our society more competitive globally. Also we must keep our scientific and technological edge by aiding education and funding grants for research in our schools and colleges.
A well maintained and up to date infrastructure is a no brainer.
We must gain energy independence if we are to eliminate the import deficient and stop sending money to OPEC countries some of whom are enemies. Solving this problem will also help us reduce defense costs necessary to protect our sources and supply lines for oil.
Finally a sound health system where all have equal access will guarantee that our citizenry will be healthy and fit for work and the enjoyment of life.
Thus if we focus on improving in these key areas, education, science and technology, energy independence, infrastructure and health we will be globally more competitive in the years to come.