President Obama has become the first president in 22 years to issue a formal order blocking a foreign investment into the United States on national security grounds. The decision, which denies the acquisition of a small Oregon wind farm project by a Chinese-owned company, will unfortunately be seen as yet another signal – this time from the highest possible level — that the United States does not really want Chinese investment. And for an economy still struggling to create jobs, that’s the wrong signal to send. Read more »

In an era in which companies enjoy unprecedented mobility to invest where they choose, one of the toughest issues for governments at the federal, state, and local level  is deciding what to do to attract and retain those investments. Governments should want to compete for investments that bring jobs, spin-off businesses, and tax revenue. And corporations – often with many suitors — can and do demand tax breaks, cheap energy, help with training programs, improvements in road and air access and other favorable legislation, and regulations that only governments can supply. Read more »

One of the more serious and lasting consequences of the Great Recession and its aftermath has been the sharp rise in the number of long-term unemployed.  Nearly 45  percent of the unemployed –or more than five million people — have now been out of work for six months or more.  That is up from less than 20 percent in 2007. Persistent joblessness atrophies skills and discourages risk adverse employers who are unlikely to take a chance on someone out of work for so long.  Few federal programs provide help for the long-term unemployed, though the recent growth in social security disability insurance may be a response to persistent joblessness. Read more »

Many of the things the United States needs to do to strengthen itself economically are hard. Improving education is a lengthy, complex undertaking with no obvious road map. Bringing the deficit under control involves politically perilous decisions to cut spending and raise taxes. Streamlining burdensome regulation requires difficult trade-offs between business efficiency and environmental and consumer protection. Read more »

Inequality in the United States today is substantially higher than almost any other developed nation, and even some developing countries such as Russia and India. According to the Congressional Budget Office, the average real after-tax household income for the top 1 percent of Americans rose 275 percent from 1979 to 2007, while income for the majority of the population–21st through 80th percentiles–grew just 37 percent over the same period. Read more »

The world’s high-income countries are in economic trouble, mostly related to growth and employment, and now their distress is spilling over to developing economies. What factors underlie today’s problems, and how appropriate are the likely policy responses? Read more »

I spent a fascinating day this week at the Techonomy conference in Detroit, and came away with a new appreciation for why I should get out of Washington more than I do. The conference, the brainchild of Techonomy founder David Kirkpatrick and co-hosted by the Detroit Economic Club, was a fascinating and inspiring look at some of the efforts under way to revitalize a city that has probably been hit harder than any other in the country by, among other things, international trade competition, technology that has shed workers, poor governance, and the exodus to the suburbs. The focus of the conference was the current, accelerating wave of technological change and how it can be made to work in revitalizing American cities. Read more »

If there’s any issue in the immigration debate on which there is a broad consensus, it is that everyone wins when immigrants come to the United States and start new businesses. Successful entrepreneurialism cuts through all the convoluted debates over whether immigrants are taking jobs that might otherwise be done by Americans. Come to America, build a business, hire employees, and everyone is happy. Read more »

I will be traveling to Detroit this week to speak on a panel at the Techonomy conference, which is an annual event normally held in Arizona. It’s a gutsy decision by the organizers to shine the spotlight on a city that Techonomy founder David Kirkpatrick noted is usually considered “a gritty, depressed, financially troubled city that seems well past its glory.” The conference will highlight the transformative economic potential of modern technologies, and as Kirkpatrick writes: “If technology is the key ingredient to rejuvenating the American economy, it has to work where the problems are biggest and the task the hardest.” Read more »

Before the Class of 2012 stepped off the dais and shed their caps and gowns, their prospects for a seamless transition into the American workforce looked poor. According to the Economic Policy Institute, the unemployment rate for recent college graduates (ages 21-24) hovered around 10 percent for the last year, while the underemployment rate (the proportion of grads that have either suspended their job search or aren’t working up to their capacity) was nearly double that at 19 percent. Read more »