2016 Postmortem
In reply to the discussion: I fear Democrats are laying the groundwork for future losses by refusing to learn from defeat [View all]
JHan
(10,173 posts)there are a couple of reasons Germany, for example, lost less jobs than we did, despite increased automation - note they also lost jobs but at a lesser pace. ( Btw Germany, Sweden and Korea are all strongly unionized)
The culture in Germany is different to ours - here, our business approach is to place too much stock in shareholder value, which is great for profit in the short term but terrible for sustained wealth creation. This culture permeates our approach in everything - and contributed to spending and lending habits and ultimately the crash..The problem in the U.S is that we don't invest in human capital, prioritising profit above all else. The two quotes here are from articles that explain it better than I could:
Illustrating Germany for contrast:
“ Germany set about enacting a range of comprehensive economic reforms to increase the competitiveness of Germany’s economy throughout the 2000s, including making its tax code more competitive, articulating The High-Tech Strategy for Germany, increasing investment in apprenticeship programs, increasing investment in its Fraunhofer network focusing on investments in industrially relevant applied R&D, and during the Great Recession introducing the Kurzarbeit (short-time work) program. Kurzarbeit helped German companies respond to the drop in global demand engendered by the Great Recession not by firing workers outright (as was too often the case in the United States), but by cutting their work to part-time and using the remaining time to retrain/reskill them (through a program collaboratively funded by German industry, labor unions, and state and federal governments) and so when global demand recovered German firms were fully staffed, and with a workforce reskilled to leverage the technologies and manufacturing processes of the future. And of course, Germany is not alone; many more of America’s competitors—including Japan, Korea, Holland, Taiwan, and even China—worked feverishly throughout the 2000s to bolster their science, technology, and innovation ecosystems that underpin the competitiveness and innovation potential of their private sector enterprises."
We didn't adopt much of those strategies. "Competitiveness at a crossroads" explains it all in detail:
http://www.hbs.edu/competitiveness/Documents/competitiveness-at-a-crossroads.pdf
"international firms became less invested in “the commons”—shared resources such as pools of skilled labor, supplier networks, an educated populace, andthe physical and technical infrastructure on which U.S. productivity and competitiveness depend."
This is where the elites failed - the problem wasn't Globalization , per se, but our rapacious, opportunistic response to it, and failure to mitigate its harmful effects, particularly on the middle class:
"How did America respond to pressure on its middle class? Unfortunately,our society did not mobilize to invest so that the middle class could compete in the global marketplace. Instead, America and Americans maintained an illusion of growing prosperity. Abetted by lenders and government institutions, consumers with stagnant incomes borrowed more to buy houses and fund consumption.
Government itself made unsustainable promises to the middle class, pledging to cover more healthcare expenses of future retirees, to employ more individuals in government jobs, and to pay generous pensions to many in the public sector, while reducing effective tax rates across the board between 1980 and 2010. These promises, coupled with a deep recession and two wars, have left government finances in a fragile state.
As debts and unfunded liabilities have risen, federal, state, and local government expenditures that support long-run growth in productivity and competitiveness—on items such as infrastructure, training, education, and basic research—have stagnated or fallen as a portion of GDP. Moreover, a resulting need to make tough, unpalatable choices has contributed to paralysis in our political process."
Addressing some of those harmful effects was all over the democratic platform this year - however protectionism and demonizing trade deals will not solve it - this is a management problem and a culture problem which requires creative solutions across the board - not demonizing trade deals, not pushing protectionism and acknowledging that the manufacturing sector is changing.
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