Part 1 of 4.
By Katie Kieffer
Photo Credit: http://preview.tinyurl.com/yflc6ru
Everyone wants to know, “Where is our economic growth going to come from?”
TIME Magazine reporter, Joshua Cooper Ramo, seems to think one innovative solution for the current U.S. monetary crisis would be to “reshape what it means to work in America.” In his Sept. 21, 2009 cover story for TIME called “Unemployment Nation,” Ramo describes his idea, which is really just another government stimulus program.
Ramo states that our country would need to offer a: “massive increase in job retraining, one that assured that every laid-off worker had a chance to learn a new skill and years of funding to master it—instead of the six-month shots now generally offered. The Administration’s proposal to increase funding to community colleges is a start. But it’s only a start. Ideally, the White House needs to propose an omnibus employment-emergency bill that guarantees jobless workers a basic set of rights for two to three years: healthcare, access to retraining, subsidized mentoring for careers in high-end manufacturing or health services. Handled well, such a program could be a “cash for clunker careers.”
Let’s consider Ramo’s proposal. He’s saying that we’re in an extremely bad recession and there aren’t a lot of jobs available that people are skilled enough to take up. So, we should educate people so that they can perform highly skilled jobs.
My questions for Ramo’s proposal:
- Logistical questions: Who is going to educate? Do the proper schools and teachers exist or would we have to acquire them? How does the government know who to hire as educators? Will the government be able to tap and afford the best and the brightest teachers? Where is the money going to come from to do this? Jobs and innovation create money. Government spending only adds to the national debt, which is already growing at a rate of $3.8 billion every day!
- Freedom and rights questions: What if someone doesn’t want to work in the manufacturing or health services industries? If Americans have a “right” to health care and education for two to three years, don’t they also have the “right” to pursue their passion and do a job that fulfills them – and who knows – might provide just as many jobs in the market place?
- Talent questions: What if they have a brilliant idea that would fall under a different industry, but they can’t justify pursuing it on their own dime while the government is giving out handouts? Is the U.S. ok with losing true entrepreneurs at the same time as it artificially tries to create them?
BOTTOM LINE, when considering another government stimulus as a potential solution to this economic crisis, we have to ask, “Are people incapable of innovating on their own during a recession?” Consider billionaire college dropouts like Bill Gates, Ralph Lauren, Paul Allen, Steve Jobs, Larry Ellison and Michael Dell. Innovators and their genius ideas don’t come from the government – they occur naturally. Education can prompt these ideas to come out, but – as many wildly successful entrepreneurs who dropped out of school prove – it’s not formal education that is the ultimate stimulus for innovation.
I can’t help but raise an eye-brow at Ramo’s line, “Handled well, such a program could be a “cash for clunkers careers.” I’d challenged Ramo to show me one program the government has handled well as of late. Social security? The economy? A successful stimulus package? Cash for clunkers, which primarily pumped funds into foreign brands, Toyota and Honda? Given the resounding failure of these government projects to achieve long-term results, why does Ramo have so much confidence that the government will succeed with handling yet another stimulus package?
Hard times and recessions are an education in their own natural way. They stimulate people to be resourceful and to think about new ways to do things. If the government is playing the role of three-year sugar daddy for millions of Americans, they aren’t as likely to innovate or come up with new, creative solutions.
I’ve recently interviewed a series of incredibly bright, optimistic entrepreneurs who started their companies in the middle of a recession. They work in different fields and faced different challenges. They didn’t rely on educational, mentoring or fiscal resources from the government. They’ve found success for themselves, and ultimately for our local economy, by using the recession as a springboard to come up with new, creative solutions for companies. Stay tuned to hear from these smart, innovative and inspirational entrepreneurs.
I think their proactive, creative approach to the recession is an example for our country and an insight into a long-term solution. Let me know what you think after you read my interviews with these bright young entrepreneurs over the next few days.
Excellent & thought-provoking post, Katie! Entrepreneurs by their very nature accept risk and are forced bt the market and their consumers to innovate. Government often has competing lobbying interests to address that don’t necessarily develop what the market/public wants or needs. Right now government is causing as many problems as it is solving – huge deficit spending and appetite for more taxes. Even harder is when an entrepreneur’s own profits (=tax dollars) are diverted by the government to fund competitive enterprises and downplay the entrepreneur’s innovation potential. A balance is necessary. So is fiscal responsibility. I look forward to reading more of your future posts!
Consider billionaire college dropouts like Bill Gates, Ralph Lauren, Paul Allen, Steve Jobs, Larry Ellison and Michael Dell.
All beneficiaries of the work at the US Dept of Defense, the National Science Foundation, and our universal phone service. These things don’t just happen in a vacuum; it’s not an either/or proposition between no-government and tons-of-government.
While Ramo’s proposal certainly doesn’t create jobs, his impulse is right on. We need government intervention in terms of money for R&D research, to spur as-of-yet uncreated markets. When things aren’t profitable, we don’t get market solutions (fewer “cures” for diseases than treatments for chronic ones from Pharma, fewer electric cars without infrastructure to support the new types of cars, etc). The government sometimes needs to take the lead to create a critical mass of development if there is not one — so the entrepreneurs can then take the lead (we keep hearing about this new green jobs, but the gov’s done very little in helping make that possible or worthwhile for entrepreneurs).
What if they have a brilliant idea that would fall under a different industry, but they can’t justify pursuing it on their own dime while the government is giving out handouts?
Sometimes the “handouts” help create jobs, though. Right now, we got small business and entrepreneurs unable to afford health insurance, so when a catastrophic cost occurs –> they’re out of business. Workers at employers with great insurance are unable to leave to pursue their “big idea” because of the fear of losing insurance. Here, government can help people be more productive allowing them to be more mobile in the labor market.
A successful stimulus package?
Yes, a successful stimulus package. The market’s gone up over 50 percent since March. Jobs lag, but they always do in recessions. This was a big crash, but it looks like Bush/Obama’s stimulus-es worked.