Essay Help : Fixing the U.S. Economy - Essay Samples

Fixing the U.S. Economy - Essay Samples

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The performance of the U.S. economy reflects, at any time, three sets of forces: first, the short-term fluctuations of the business cycle and government's success in regulating this cycle by manipulating the levers of fiscal and monetary policy; second, external forces, such as energy or raw materials shortages, international debt crises, or the emergence of new industrial competitors; and third, internal public policies and public and private investments that shape those institutions and resources that underpin and sustain our economy--including the building and maintenance of public infrastructure, preparation and recycling of human resources, and the evolution of public and private institutions that define and regulate the marketplace. Until recently, noisy debates about the first two sets of influences on economic performance have drowned out most discussions of the third. However, the last of the three is likely to have much greater influence than the others on the nation's long-run economic vitality. This collection of essays focuses mainly on the fundamental sources of U.S. economic performance and the public policies that can sustain or weaken them.

We must be clear about what is happening to the U.S. economy, trying to separate out secular shifts from shorter-term cycles. Some basic U.S. industries that require large plants and large skilled work forces-autos, primary metals, and textiles in particular--have recently declined in terms of absolute production and, especially, employment. At the same time, other U.S. industries--including services and high technology manufacturers--have shown great strength. (Michael Kouparitsas 2015) In the face of declining U.S. price competitiveness in international trade, U.S. exports of high technology steadily rise. Plant closings and high unemployment among experienced manufacturing workers do not necessarily suggest that the United States is "deindustrializing." A more reasonable interpretation would emphasize the nation's declining competitive advantage in certain mass production industries and its failure to actively manage this and other structural shifts in order to reorient capital, labor, and impacted regions toward emerging economic functions. Previous generations were forced to come to grips with the decline of obsolete, transformation of evolving, and birth of new industries. Analysts and policy makers--faced with shifts of similar magnitude today--are reexamining the fundamental bases of our economic system. (Betty W. Su 2014)

Private investment determines the economic fabric of society: the decisions of thousands of individual and institutional investors and the activities of entrepreneurs determine which industries will rise, decline, or evolve. Many observers, after evaluating our present economic malaise, believe that the public sector, through selected interventions in the marketplace, can engineer or influence "desirable" outcomes stemming from current trends in industry. This raises several questions. Can government successfully stimulate and channel private investment to emerging industries or to troubled industries that can adapt and survive? Which industries should be targeted for assistance, and how are they to be indentified? What would be the political implications of a new corporatist linkage of big business, big labor, and the federal government to manage such an "industrial policy?" (Arturo Gonzalez 2018)

The transformation of our industrial base is influenced by national economic policy, whether intentionally or not. These policies are, in turn, shaped-directly or indirectly--by professional economists, whose advice reflects the best conventional wisdom of the moment. However, the science of economics is in a state of intellectual turmoil, with some arguing that, as mathematical sophistication has increased, understanding of actual economic problems has diminished. Will economists provide useful new conceptualizations of the problems of reindustrialization and the public policies needed to manage economic transformation?

References
Arturo Gonzalez; Mexican Americans & the U.S. Economy: Quest for Buenos Dias. Tucson: University of Arizona Press, 2018. 165
Betty W. Su, "The U.S. economy to 2012: signs of growth," Monthly Labor Review, February 2014, pp. 23-36.
Michael Kouparitsas, "Is the U.S. current account sustainable?" Chicago Fed Letter, No. 215 (Federal Reserve Bank of Chicago, June 2015).