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Innovation/Global Crisis Blog

The Speech Obama Won’t Make But Should: “Our Economy Will Thrive Only When We
    Make What We Invent”

by Shlomo Maital 

  President Obama will make a key speech to the nation tomorrow night (Sept. 8), about his plans for creating jobs.  Here is what he should say.

    I have an announcement. I will not stand for re-election in 2012.  I am taking responsibility for the mess America is now in.  Instead of tackling the real issues – job creation – I wasted all my energy and political capital on health care reform, which in fact was the least of America’s worries at the time. My advisors told me not to, I didn’t listen, and so I am choosing not to run again for President.  This will enable me to tackle the job issue without critics saying I am playing politics. 

   In the remaining days of my term of office,  I will do the following.  First, state the truth. America’s GDP, 80  % services, must restore manufacturing to 25% of the economy (it’s now 12 %) within a decade.  America’s wealth and greatness came from inventing products, then making them. Today we do only half – we invent things, and let China make them.  It isn’t working.  We have a $500 b. deficit in manufactured goods.  That means we have to borrow from China, to enable us to buy the goods that China makes, so China can have low unemployment.  If we made these manufactured goods ourselves, we would have 10 million new well-paying jobs, directly, and 30 million more generated by the spending of the newly-employed.  That is enough to wipe out unemployment and rebuild the incomes of the middle class, as well as kill the looming double-dip recession. 

    I will introduce legislation that eliminates all the huge tax advantages American companies enjoy by producing abroad. I will also initiate a plan to create a German-style vocational high school stream that creates a cadre of young people with skills useful in factories.  I will offer a tax holiday to companies like Apple, if they bring their piles of cash home from abroad and invest it.  Despite our deficits, I will double federal grants for R&D and link these grants to the condition that any devices emerging from this R&D must be made in the U.S.  I will impose a tariff on all Chinese goods that brings their price to the level it would be, if the yuan were 3.5 per dollar rather than 6.8 per dollar.  The World Trade Organization will scream, but its screams will be music to my ears.  I will ask all Americans to buy red-white-and-blue – check the label, and buy only products that are Made in America.  If you do, you create jobs for others, and ultimately for yourself. 

   Our economy can thrive only when we make what we invent.  It’s so simple.  China is working feverishly to invent what it makes.  Good for them.  We will work equally hard to make what we invent. May the best country win. 

 * this speech is based on the New York Times Op-Ed by Susan Hockfield, MIT President, “Manufacturing a recovery”, August 29, 2011.    


Blog entries written by Prof. Shlomo Maital

Shlomo Maital
September 2011
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