Transcript
BERNARD SCHWARTZ: This subject is more important and more relevant than ever before because today's global landscape is more competitive than ever before. Rising economies like China and India represent new challenges to our position on the playing field as they introduce millions of new workers into the labor market, millions of dollars of investment into scientific programs which prior to this have been an area where the Western nations had a more important role to play. They are accumulating large savings because of their entrance into the economic scene which has placed a certain imbalance in the conventional relationships between international countries.
But simultaneously in America we see while they are growing fast, the emerging countries are emerging extremely strongly, we see a low savings rate, we see decreasing investments in technology and research and development, soaring fiscal deficits, rising health costs and pension liabilities, concern about the weakening dollar, insufficient Ph.Ds in academic producing important players in the hard sciences, a faltering K through 12 school system, and, finally, a credit system that is reliant on the kindness of foreign countries. All of these factors seem to point to a most formidable challenge for the United States.
Our critics foresee a hard landing and losing the race in our competition with China and India. Nevertheless, I remain optimistic about America's economic prospects even while admitting that some of these criticisms are valid. America still enjoys a wide range of incredible advantages including cutting-edge scientific innovation, labor mobility, free and large capital markets, leading technological performance, world-renowned higher-education programs, a high rate of job creation, low unemployment, abundant liquidity for investments, robust corporate profits, and strong balance sheets. These are not unimportant. And as an optimist, I see a winning scenario, not a zero-sum gain.
So where is the disconnect between these two scenarios? Is one correct and the other wrong? Can both be right? In fact, is there a new paradigm at work today that we have not yet been able to calibrate? And is there indeed from this paradigm an appropriate challenge to the current economic orthodoxies? I think that today's panel will be adding some insight and giving some answers to these very tough questions.
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