Why America's Economy Is on the Brink of Going Down the Tubes ... for Good

The fundamental problem with America's economy is a decline in the capabilities and motivation of our workforce. True economic growth stems from innovation.
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Recessions, especially the deep downturn that started in 2008, always cause us to scramble. Companies routinely slash spending while governments do the opposite, trying to shock the country's economic heart into beating again through heroic measures such as the recent stimulus package. Concern about a possible "double dip" recession have the hands of corporate CFO's and Washington officials hovering over the panic button again, mere months after the last push.

But our scramble to reduce the impact of the latest disaster distracts us from addressing the deep-seated problems that inexorably create the next disaster, and the one after that. Why waste energy on the distant future, we reason, when we'll never get to that future if we don't solve the problem staring us in the face?

We all focus on addressing here-and-now emergencies because we have no choice. What limits our options are not outside events, such as economic downturns, but internal events that go on inside our brains. As a neuroscientist, I've learned that our brains are hardwired to avoid near term threats and to ignore long term opportunities , because our brains are identical to those of our distant ancestors who faced a daily struggle for survival. When our brains evolved into their present form, about 50,000 years ago, the environment was incredibly harsh and risky, limiting life expectancies to 20-25 years. Diverting attention from day-today survival in those Paleolithic times would have invited disaster. Neuroscientists call this hard-wired preference for quick fixes over long range pursuits temporal myopia: everything past the immediate future looks fuzzy, or even invisible, and is therefore irrelevant.

Unless we overcome our temporal myopia, we'll continue to put band-aids on this economy and it will continue to deteriorate: in other words, we'll continue to treat symptoms and never go for a complete cure.

And what would such a cure look like? Let's start by looking at disease that afflicts us. The fundamental problem with America's economy is a decline in the capabilities and motivation of our workforce. True economic growth -- not the artificial kind spurred by fiscal policy -- stems from innovations such as Google's search engine that create entirely new businesses and markets. Such innovations grow out of technological advances, which in turn emerge from earlier scientific discoveries.

Alan Greenspan, former Chairman of the Federal Reserve Bank, reinforced this idea when he said "Capitalism expands wealth primarily through creative destruction -- the process by which the cash flow from obsolescent, low-return capital is invested in high-return, cutting-edge technologies."

And where do cutting-edge technologies come from? Modern

But the National Academy of Science report, "Is America Falling off a Flat Earth?" points out that science, technology and math education of the American workforce has been in steep decline for decades, as students now choose careers in business, law or media over the high tech jobs that were so attractive in the post-Sputnik 60's and 70's. In stark contrast, workforces of countries such as China are becoming much more tech savvy, such that China now rivals the US and Europe in patents and technical publications. S. James Gates, a physicist who served on the President's Council of Advisors on Science and Technology said, "If you look at U.S. performance on various international metrics, depending on which one you use, we come out something like 24th or 25th in the world."

In my own informal survey of middle school and high-school students, conducted during school speaking engagements to increase the allure of science, most kids tell me that they plan to steer clear of science because it's "way too hard." Other kids observe that "scientists are nerdy." As a result of these widespread attitudes -- nurtured by Hollywood's portrayal of scientists as socially clueless eccentrics -- innovation-fueled economic growth will increasingly take place outside America's borders, and our economy will spiral into relative decline for the foreseeable future.

We can pull out of this dive, however, if we see through our temporal myopia to some hard facts: we will never motivate the majority of America's youth to give up "cool" careers that promise to make lot of money for "nerdy," un-cool science and technology careers that require hard work in school. We have simply grown too comfortable as a society and lost the fire in our belly.

During World War II, and right after Sputnik, did students, teachers and parents let the prospect of hard work learning science, math and engineering deter them? No, because we faced obvious crises. Harvard Business School Professor, John Kao, author of Innovation Nation: How America is Losing Its Innovative Edge, Why It Matters and How We Can Get it Back said, ""Fifty years ago the Soviet satellite Sputnik burst the nation's bubble of complacency and challenged America's sense of global leadership. But we rose to the challenge with massive funding for education, revamped school curricula in science and math, created NASA and put a man on the moon." Today we face a brain race vs. a space race that is every bit as problematic for America as the first Russian satellite, but this crisis amounts to a "silent Sputnik" that flies under America's radar. Out of sight, out of mind.

I believe that Americans are unlikely to notice, let alone react to such a stealth threat. The only answer is to reach out to motivated Americans, in places like China and India, who don't yet know they're going to be Americans. Let's gear up a recruiting system that combs secondary schools in China, India, Russia, Europe and South America for top science and technology talent, just as college football programs look for the best high school athletes. We'll offer these kids -- who do have fire in their bellies because they've grown up in countries that haven't gotten complacent -- full scholarships to American colleges and a fast track to US citizenship once they complete their studies. This will, in the long run, inject new vitality into our workforce and our economy and help cure our deep economic ills.

Spending taxpayers' money on educating other countries' students will be a tough sell in Washington, but not a tough as getting taxpayers to swallow one trillion dollar stimulus package after another.

Dr. Haseltine, a neuroscientist and former Associate Director of National Intelligence for Science and Technology, is the author of Long Fuse Big Bang: Achieving Long-Term Success Through Daily Victories

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