Innovation Hub: The American Economy Is in Better Shape Than Ever
Despite increasingly good job numbers, pessimism about the economy persists. According to Gallup, almost 60 percent of Americans think the economy is still getting worse. Last week, Clayton Christensen told Innovation Hub that America was on its way to becoming Japan—a country that has been wrestling with stagnation for a quarter century.
But Joel Kurtzman, senior fellow at the Milken Institute and author of Unleashing the Second American Century, disagrees. Kurtzman says that America is in surprisingly strong shape economically.
I spoke with Kurtzman about his outlook for the American economy, and why he believes that we are in much better shape than people think.
[This interview has been edited and condensed. For audio of the full conversation, visit www.innovationhub.org.]
Kara Miller: Do you think we have returned to the position of strength that we were in before the recession?
Joel Kurtzman: I think we’re in a very, very good position as a country, and our economy is really very strong. It’s been ignored, for the most part. If people were to look at the facts at where we are economically, I think the confidence that is lacking right now would return.
KM: When you look at the polls, people do not feel that good about the economy. Why is that?
JK: People are pretty despondent. If you look at the surveys, that sense of gloom cuts across all segments of the economy. I saw a recent study that said that only 2 percent of the country would define themselves as optimistic right now. What worries me is that if you are very strong—and the U.S. is very strong—but you make decisions as if you are weak, you’re going to make the wrong decisions.
KM: Will creativity continue to be concentrated in the U.S.?
JK: The next Apple will be in the U.S. The last Apple was in the U.S. And the companies before Apple were in the U.S. The U.S. has dominated the world economy. During the presidential election, there was this inane, incorrect statement that was made over and over again, which is, “We don’t make anything here anymore.” I looked into this. And it turns out that, in fact, the United States is the world’s largest manufacturing power. It’s the most advanced; it’s the most productive. We make the most sophisticated things in the world. We have a two-ton SUV that is navigating its way around Mars. Who else can do that?
KM: We often worry about the outsourcing of technical jobs like engineering. Is that a valid concern, and will that negatively impact the economy?
JK: Well, that’s true. We can’t fill the jobs that we have in the STEM areas. But people want to come to the United States to work. They want to start companies here. When you think about China or India, there are an enormous number of very smart people there. But these countries are not producing new, innovative companies. Once the bright minds come to the United States, they actually start companies here. We get the benefit of that education. Forty percent of companies started in Silicon Valley were started by immigrants.
KM: Are we headed in a direction where we might have a strong economy, but a lot of people won’t feel the benefits?
JK: I have a LIFE magazine from July 19, 1963. The cover story is about automation, and how it will kill jobs. That’s what they were thinking in 1963. Well, after that, we had the largest job creation explosion the U.S. has ever seen. We created millions and millions of jobs in sectors that, in 1963, no one even thought about. It was pre-Silicon Valley. And so, it’s very difficult to forecast where the economy is going. I’m sure some people will be left behind. But as we grow and as our economy expands, we will see more jobs created in fields that we never thought of.
Oliver Lazarus contributed to this report.
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