What Are the Element of a Growing National Economy?

Once again the United States is facing another economic down turn.  It is not a new phenomenon.  According to a report by CNBC there have been 21 recessions since 1900.  However there were recessions in the 1800s too.  They called them “panics.”

The one part of all successful economies has been their ability to provide a product not a service.  The products have been mined, grown, or manufactured.  The United States has been blessed with resources to produce products from all three of these sources.  Somehow the United States lost its way and no longer is the leader in any of these categories.

This country has become a “service” economy.  While manufacturing still exists here it is no longer a major part of our gross domestic product.  More than 40% of GDP are services.  Autos (3.6%) and furniture (3%) are part of an 8% manufacturing sector of GDP.  What is making matters worse is that those service jobs are going overseas along with manufacturing jobs.

An additional issue is that the remaining jobs do not pay as well as manufacturing jobs.  The nearby General Motors assembly plant was shut down about 20 years ago.  It was replaced by a shopping center that provided sales clerk jobs that offer pay of less than one half of those at the GM facility.  Where have all those jobs gone?  Look in Mexico, China, Japan, Taiwan, Indonesia, India, Bangladesh, etc.  The clothes you wear and most of the other commodities you use were made elsewhere.  Walmart, Costco, Target, and others buy most of the items they sell from another country.

I do not expect that Barack Obama or John McCain personally know how to resolve this very significant issue.  They need wise economic advisors who should step forward now with the way forward.  John McCain saying that “the fundamentals of our economy are strong” is no answer.

Herbert Hoover said the economy is fundamentally strong.  Is McCain really Herbert Hoover reincarnated?