Globalization

With President-elect Obama and congressional leaders meeting this week to discuss the economic recovery and reinvestment package, NDN is re-releasing a selection of its economic policy analysis and recommendations from the past few years. I hope you find these essays, memos, and papers helpful.

Background: Economic Recovery and Reinvestment

• Getting the Stimulus Right by Michael Moynihan, 1/6/2009 - Moynihan makes a number of suggestions for ensuring that the upcoming, record-size stimulus package is a success, including a board to oversee the vast expenditures.

• A Vision for a Modernized Electric Grid: Clean Infrastructure for a 21st Century Economy, 11/18/2008 - NDN's Green Project hosted this discussion with Congressmen Jay Inslee and Earl Blumenauer, FERC Comissioner Jon Wellinghoff, Kurt Yeager, and Reid Detchon on the benefits of modernizing the nation's electric grid as part of a clean infrastructure agenda.

• A Stimulus for the Long Run by Simon Rosenberg and Dr. Robert Shapiro, 11/14/2008 – This important essay lays out the now widely agreed-upon argument that the upcoming economic stimulus package must include investments in the basic elements of growth for the next decade, including elements that create a low-carbon, energy-efficient economy.

• Accelerating the Development of a 21st Century Economy: Investing in Clean Infrastructure
  by Michael Moynihan, 10/18/2008 – NDN Green Project Director Michael Moynihan outlines a strategy for investing in clean infrastructure that will help create long-term prosperity.

• Solar Energy: The Case for Action by Michael Moynihan, 8/1/2008 – This major paper on the dynamic solar industry argues that accelerating the deployment of solar energy must become a top economic policy priority of the United States.

• The Green Economic Opportunity and Energy and the American Way of Life, 8/1/2008 - This two-part event featured an address from U.S. Senate Assistant Majority Leader Dick Durbin on the benefits of a low-carbon economy and Roger Efird, Greg Kats, Jack Hidary, and Shyam Kannan discussing green buildings and clean technology.

• Investing in Our Common Future: U.S. Infrastructure by Michael Moynihan, 11/13/2007 - This
  far-reaching paper proposes a set of measures rebuild and advance our aging infrastructure. These proposals include a GREEN Act to require that federal infrastructure and buildings meet a higher set of environmental standards that not only address issues such as global warming but also establish American leadership in green technologies.
• Tapping the Resources of America's Community Colleges: A Modest Proposal to Provide Universal Access to Computer Training by Dr. Robert Shapiro, 7/26/2007 – This innovative proposal details how every American can have access to computer training, thereby upgrading the skills of the nation’s workforce.

• A Laptop in Every Backpack by Simon Rosenberg and Alec Ross, 5/1/2007 – Rosenberg and the One Economy Corporation’s Ross offer a modest proposal for putting a laptop in the backpack of every American sixth grader, as connectivity to and facility with the global communications network are essential for success in the 21st century.

Background: Keeping People in Their Homes, The Bailout

• If Detroit Goes Down, Will It Take the Economy -- and the GOP -- With It? by Dr. Robert Shapiro, 11/19/2008 - Shapiro argues that, since the Bush Administration is at least partially responsible for the economic situation facing the automakers, it should put its weight behind helping the industry and its workers.

• Notes on the Financial Crisis by Michael Moynihan, 9/26/2008 - Moynihan examines the panic fueled by the Bush Administrations inadequate response to the financial meltdown.

• Back to Basics: The Treasury Plan Won't Work by Dr. Robert Shapiro, 9/24/2008 - As the financial crisis unfolded and the Bush Administration offered its response, Shapiro argued that, while major action was needed, the Treasury's plan would be ineffective. 

• Keep People in Their Homes by Simon Rosenberg and Dr. Robert Shapiro, 9/23/2008 – At the beginning of the financial collapse, NDN offered this narrative-shaping essay and campaign on the economic need to stabilize the housing market.

• NDN to Congress: "Keep People in Their Homes" by Simon Rosenberg and Dr. Robert Shapiro, 9/17/2008 - NDN made this leading statement on the need for the federal government to keep people in their homes.

Background: A New Economic Strategy for America

• The Idea-Based Economy and Globalization: The Real Foundations of American Prosperity in the 21st Century by Dr. Robert Shapiro, 1/23/2008 – In this important paper, NDN Globalization Initiative Chair Dr. Robert Shapiro examines how and why U.S. companies and workers lead the world in developing and applying new intellectual property, and why this leadership in innovation constitutes a critical U.S. advantage in globalization.

• NDN Poll Memos: American Voters' Views on the Economy and Globalization - Clamoring for Change, Persistent Pessimism, Democrats dominating on economic issues, 11/2/2007; Americans’ Views of the Present and Future Economy: Anxiety and Opportunity, 11/6/2007 - NDN’s comprehensive polls of American attitudes in 2007 about the economy make it clear that that the American people understand the current era of globalization, but are frustrated with the inability of their leaders to provide an economic framework that adequately and effectively deals with its impacts.

• The New Landscape of Globalization: The Real Foundations of American Prosperity in the 21st Century by Dr. Robert Shapiro, 6/20/2007 – Shapiro offers this forward-looking paper on the current state of globalization and how America can thrive in this new economic era.

• Meeting the Challenges of the 21st Century: Crafting a Better CAFTA by Simon Rosenberg, Dr. Robert Shapiro, and Joe Garcia, 6/9/2005 - NDN calls on progressive policymakers to face squarely our own vision of how globalization can and should work, as well as how America can best promote economic and political progress by our Latin American neighbors.

Franken - The Minnesota State Canvassing Board confirmed today that Al Franken has won his Senate election, ending a weeks-long recount process that started with the Democratic challenger facing a roughly 215-vote deficit.

Black Swans - A great blog by David Rothkopf on Latin America and foreign policy.  Here, the term "Black Swan" means a recurring theme throughout history in which key events or discoveries of real significance forced a rethinking of the rules and standard approaches that had previously guided society.  And we definitely need to rethink our policies in Latin America.  Excerpt of the piece: 

The best place to begin looking at what might be unexpected is to identify
what most Washington types think is in store for us. As of right now, 2009 looks
like this: deeper, messier recession worldwide, the beginning of the U.S.
pullout from Iraq, worries about Pakistan and Iranian nukes, hopes that Obama
can restore U.S. standing. Oh, and recently a recognition that Israel-Palestine
will continue to be an open wound. But here's five black swans that could arrive and wreak unanticipated havoc: 

1. The failed state next door

At a meeting of leading diplomats from around the Americas I attended not too long ago, the subject that caused the greatest concern was the situation in Mexico. Organized crime has taken a dominant position in a number of provinces and the federal government is struggling to contain the growing security threat. The country is losing oil revenue due to plummeting prices and mismanagement of PEMEX, the national oil company. The Merida Initiative, Plan Colombia-lite for Mexico, has not made the progress some had hoped for and the result is a fragile situation. Add the possible consequences of a very tough 2009 economically and a match is tossed on tinder. In a world in which there is no such thing as foreign policy any more -- every key event has U.S. domestic consequences -- there is no better example than our neighbor. The symptoms of crisis will come streaming over our borders and border-state politics will make it a problem Obama cannot ignore. (Especially with a Homeland Security secretary who is a former border-state governor.) 

The saying goes that when the United States sneezes, the world catches a cold. Recent statistics show that global manufacturing, including in the United States, has indeed caught a pretty bad cold.

From today's New York Times:

From Australia, to Asia and Europe and the United States on Wednesday, the message in the latest economic reports was clear: manufacturing continued to slump amid the worst slowdown since the Great Depression.

In the United States on Friday, a crucial measure of manufacturing activity fell to the lowest level in 28 years in December. The Institute for Supply Management, a trade group of purchasing executives, said its manufacturing index was 32.4 in December down from 36.2 in November.
…

In Europe, a closely watched index of purchasing managers showed manufacturing hit a low in December, falling to 33.9 from 35.6. Any reading above 50 signals growth, while a reading below 50 indicates contraction in manufacturing. Similarly grim readings in Australia, China and India highlighted how the Asia-Pacific region has become caught up in the global turmoil.

In China, the purchasing managers' index by the brokerage firm CLSA showed the manufacturing sector had contracted for a fifth consecutive month. The survey showed the steepest decline in its history.

For more bad news about the global economy, and the steps being taken to right the ship, the full article can be found here. China announced its first response in November: a $586 billion stimulus package focused heavily on rail - and the incoming Obama administration is in the process of formulating what is being reported as a two-year package of $675-775 billion.

In November, Simon Rosenberg argued that American foriegn policy must be oriented toward overcoming the massive economic problems facing the global economy, and, in December, Dr. Rob Shapiro took a look at the global implications of the dismal science practiced by the current architects of American economic policy.

The Bush administration, long known for faith-based initiatives, has embraced a new form of faith-based economics to address the financial crisis and cascading recession: We’ll call it an economic version of Christian Science, prescribing modest steps to make the patient comfortable while largely leaving us to heal ourselves.

It’s only an analogy, but play along. A succession of debilitating infections has left the American economy in critical condition. The specialists (the Treasury and Fed) have prescribed the application of salves (the bailouts) wherever the infections break through the skin (financial institutions facing bankruptcy), while the actual infections (rising home foreclosures, lax or absent regulation, and the credit freeze) are left to heal themselves. As the patient deteriorates, the family (Congress and the White House) faithfully hang on every word from the specialists; and like everything in modern medicine, the price tag is astronomical. Months into this regimen, the treatments have done little to control the infections, and the patient’s condition is critical.

The current regimen also leaves the economy vulnerable to new shocks to its system, and they’re almost certainly coming. Lucky for everybody, this patient can’t pass away – but the economy could require life support for another year and come out of this with long-term disabilities. This week’s shock came from Bernard Madoff and his accomplices. In normal times, the banks and other institutions that gave Madoff tens of billions of dollars to invest would write down the losses with modest effects on their other activities. Or, if the bailout regimen had included serious measures to stem the housing foreclosures still eroding the value of mortgage-backed securities, the institutions could better absorb the new Madoff losses. But more than half-year into this crisis, the Drs. Bush, Paulson, and Bernanke have still left hundreds of large banks and funds exposed to additional rounds of mortgage-backed-security losses, and thus all the more vulnerable to unexpected losses from sources like Madoff’s schemes. It’s not too late for Congress to address the underlying infection here, with a 90-day moratorium on foreclosures, and a commitment by Fannie Mae, Freddie Mac and the institutions collecting taxpayer bailout money to renegotiate the terms of the distressed mortgages they hold.

The Great Recession we’re all living through will inflict additional, damaging shocks on the economy. For example, the budget deficit is growing at a record pace, fueled by the accelerating decline and stimulus packages that include virtually every idea any member of Congress has considered over the last decade. The new catch is that as the effects of the economic decline spread to the countries which finance most of our deficits, especially China and Japan, the global pool of savings is contracting. On top of that, the recession has taken hold in much of Europe, driving up their deficits. The inevitable result will be intense competition next year for a shrinking global savings pool, which in turn will put upward pressure on our interest rates in the midst of deep recession. And that will further slow the resumption of normal lending – because, once again, the bailout regimen simply applied a salve of taxpayer infusions for financial institutions without addressing their dogged resistance to using those funds to resume normal lending.

The good news in all of this is that the nations that regularly make trouble for the U.S. – Russia, Iran, and Venezuela – all find themselves in terrible straits. The global recession has driven down their oil revenues (and the value of their government bonds) faster than an American 401K. Unfortunately, as Harvard’s Ricardo Hausmann points out, the global crisis also is cutting off foreign capital flows to most developing nations, including stable and friendly places such as Mexico, South Africa, Turkey, Brazil, and Malaysia. President Obama may well find Vladimir Putin and Hugo Chavez much weakened adversaries. But he and Secretary of State Clinton could well also face new problems triggered by economic upheavals in many parts of the developing world. The silver lining for us is that much of the capital that would have gone to developing countries will flow here instead, hopefully moderating the upward pressures on interest rates. In order to take advantage of it, however, Congress will have to go beyond the administration’s salves and attach explicit lending requirements to the next round of bailout funds.

The current regimen of Christian Science economics is working no better in this financial crisis than the medical version would work in a deadly epidemic. The American economy will not get well on its own. Fortunately, however, the architects of this approach will retire in a month, and the country then can turn to more able doctors.

It has now become conventional wisdom that the housing crisis is at the root of the financial meltdown – an argument NDN has been making since September. 60 Minutes gave voice to that shared sentiment last night, devoting almost the entire program to housing issues and President-elect Barack Obama discussed the very same topic in his weekly YouTube address.

The first 60 Minutes segment, an interview of House Financial Services Committee Chairman Barney Frank, discusses the broad range of issues facing the influential Massachusetts Congressman, including the current financial and housing crises.

Yesterday my family went shopping at a local Apple Store for a new iPod for my wife (she chose a Nano). In between chasing my kids as they ran through the store, we were all greeted with a remarkable sight - a youngish Apple employee patiently teaching a class of 10 or so middle-aged adults about all this new fangled technology pouring out of Apple these days. Since then, I've thought a a lot about that image of seeing learning happening at a retail store right in the middle of the holiday rush. To me, it could become an inspiring image for this new age of Obama - America and its people retooling, together, for the new economy of the 21st century. 

The new economy of the 21st century will be many things, but we know it will and must be technology-rich, built on a low-carbon foundation and with the rise of nations like China, India, Brazil and Mexico, much more globally competitive. Successfully transitioning America and its people to this new economy is one of the incoming President's most daunting challenges, and one he seems to understand. 

NDN was pleased and excited last week when the incoming President embraced some ideas we've been aggressively advocating for - investments in greening government buildings, health IT, creating universal and ubiquitous broadband and computer access, including in our nation's public schools and overall investment in our nation's aging infrastructure. These are smart investments, ones that will not only help address the short-term challenges we face but also help accelerate our transition into this new economy.  

As he and his team consider other measures that have similar dual short- and long-term benefits, we hope that they take a serious look at another idea NDN has been promoting - offering free computer training to all Americans. NDN first proposed this idea in a compelling paper by Dr. Rob Shapiro last year, Tapping the Resources of America's Community Colleges: A Modest Proposal to Provide Universal Access to Computer Training. In it he wrote:

It is time that America ensures that all workers have real opportunities to build
the skills necessary to operate one of the most important new technologies of our time, computers. Young Americans are increasingly adept at working with computers, but many American workers still lack those skills. Here, we propose a direct, new approach to giving U.S. workers the opportunity to develop those skills, by providing federal government grants to America’s community colleges to keep open their computer labs three nights every week, staffed by instructors who will provide basic instruction to any person in the community who walks in and requests it.

The primary way any nation can ensure that its people enjoy broad‐based upward mobility is to raise the productivity of its workers and businesses. Achieving that goal, as the United States has done throughout most of its history, depends largely on three critical factors. First, the economy must promote the development and spread of new technologies, new ways of organizing and operating businesses, and other innovations that create new value and new efficiencies. Second, companies must invest in those technologies and in other business and economic innovations, so workers can use them to perform their jobs more productively. Finally, workers, companies, and the government must provide continuing support for all workers to acquire the skills to operate new technologies and perform well in innovative business environments.

The program proposed here, fully implemented, could provide that support and enable all American workers to learn basic computer skills at a total annual cost of less than $125 million a year.

Later in 2007, Senator Obama's campaign embraced the idea, and Democratic Caucus Chair John Larson has been working on a bill that would introduce the idea in the House. We discussed this idea, and a sister idea - putting a laptop in every backpack of every American child - at a forum last year with Rob, Rep. Larson and Transition Advisor Alec Ross.  

There is great societal power in this program, well beyond its surface appeal. Imagine if the President launched a multi-year campaign to challenge Americans to upgrade their skills, and become fluent in the new ways of the Internet and computers. That he would offer training, ubiquitous access and in exchange, we would all go back to school - making it patriotic to retool around these new technologies and this new way of working. Older public officials could take these classes and encourage their fellow citizens to do so. Community leaders could engage in public chats with students in newly wired schools. And so on. It could become a national, communal effort to move our society and people to this new economy, together, embodying this new ethic already articulated by President-elect Obama that what must be done must be done together, that there is a limit to what government can do.  That by embracing this national effort to retool we will ensure that no American is left behind in this new economy of the 21st century.

My hope is that this moment I witnessed in the Apple Store yesterday - Americans learning, retooling - becomes a a model for an entire generation, and that together we work to make sure all Americans have the tools they need to live, learn and prosper in the new economy of this daunting new century.

On virtually everything economic, the Bush Administration and much of Congress have become the gang that can't shoot straight -- and their stray bullets could take down a good piece of the nation's economic prospects. They have directed hundreds of billions of taxpayer dollars to financial institutions (and soon, auto companies), and they're getting ready to direct several hundred billion more at the overall economy. In all of these instances, a political drive to display the will and capacity for large actions has overwhelmed deliberate thinking about the specific consequences of those actions. The Obama presidency and the country may pay a big price for this scattershot approach.

The latest example of this dangerous development is the ever-expanding size of the long-awaited next stimulus. We're in a deep and serious recession and a major stimulus was certainly needed -- mainly six months ago, when the Bush Administration and Congress provided tax rebates which were largely saved and had little stimulative effect. Now we know how bad the downturn is turning out to be, and Congress and the Administration-in-waiting is preparing another stimulus of a size commensurate with what's already unfolding, once again, as if this were six or eight months ago. A stimulus providing another $200 billion to $300 billion in new federal spending makes sense, mainly as insurance for another shock to the economy. But a $500 billion to $750 billion package like the one now under discussion will miss its target by many months and mainly indicates that the new rule is that anything goes when you win and damn the consequences.

Congress seems intent on responding to this recession as if everything known about how the business cycle works can be ignored, and the consequences could be serious. The Obama team is focused on long-term investments in 21^st century energy and transportation infrastructure, modernizing health care records, expanding training and education, and extending broadband and IT access for poor children. That's all good news for the long-term health of the economy and for the incomes of many households.  The catch is, long-term investments entail not a one-time boost in spending, but continued funding. So when we raise the ante on those investments from $100 billion or so to $300 billion, $400 billion or $500 billion, we're implicitly choosing either to foreswear any other commitments, such as health care, or to embrace another round of dangerously large, structural deficits.

Since the new politics seems to involve never saying no, the likely result of the current course, on top of the extraordinary infusions of credit by the Federal Reserve, is serious inflation once the downturn begins to resolve itself. This pattern is disturbingly similar to the short-sighted and cavalier approach to long-term risks that got the nation into this mess. And it continues to develop alongside the Treasury and Congress' continuing inability to address the rising foreclosures still driving the financial crisis and the credit freeze accelerating the downturn. Yet real responses are within reach: place a moratorium on foreclosures while Fannie Mae and Freddie Mac renegotiate the terms of millions of troubled mortgages and link financial bailout funds to a commitment to use them to extend credit to businesses. If we do that, the economy won't need so much fiscal or monetary stimulus. 

The current approach presents other serious risks. This pattern of fast-rising spending, on top of the bailouts already done and those to come, as well as more tax cuts, could push the U.S. deficit to levels that even the United States will have trouble financing. The Asian and Middle Eastern governments that provide much of our public financing could stop -- either because they'll see inflation coming, too, or because the global downturn and falling oil prices sharply reduce their savings and thus, their ability to lend them to us. The U.S. Treasury will always find the funds it needs, but it may have to pay a lot more to borrow them, which means higher interest rates. So the current approach risks an interest rate spike on top of everything else, which at best would lead to a substandard recovery. With all of its talent and broad public support, the Obama presidency should be able to do a lot better than that.

Gov. Bill Richardson made a quick personal trip to Mexico this weekend.  The Commerce Secretary nominee attended a regular meeting at the Universidad de las Américas, Puebla (UDLA)- my alma mater - in his capacity as a member of UDLA's Corporate Advisory Board.  The Governor met with the current President of the UDLA, former Mexican Minister of Foreign Affairs, Luis Ernesto Derbez, as well as a group of prominent executives who serve as advisors to the UDLA.  During the meeting, Gov. Richardson would not answer specific questions with respect to President-elect Obama's plans for NAFTA or any other area of trade or foreign policy, other than to say that the President-elect is very conscious of the importance of the U.S. relationship with Mexico and with Hispanics in general.  Gov. Richardson has not only been a prominent advocate for a more engaged relationship with Latin America, he's been a grassroots activist as well: his history with the UDLA began when he studied abroad there, becoming an alum.  Years later, as a U.S. Congressman, he worked to expand exchanges between students in the U.S. and the UDLA to create a network that would "build better bridges of understanding" between the future generations of the two countries.  More recently, Gov. Richardson was the commencement speaker for the 2003 graduating class, at which time he received an Honoris Causa Doctorate degree from the UDLA.  Gov. Richardson also has a long history working with NDN, speaking about the kind of new partnership that should be forged with Latin America.

In his Saturday address this morning, Barack Obama started filling in details of his emerging economic strategy.  Major elements of this speech - massive investment in our infrastructure, putting computers in our schools and making universal connectivity to the internet a national priority, health IT and making our government buildings more energy efficient (for both see here) - should be familiar to NDN readers, as they are ideas NDN has been championing for some time.  

Needless to say we are pleased with the direction the President-Elect is taking, and are anxious to work with him to turn these powerful words into reality next year.  

Here is the full text of this important speech: 

Good morning.

Yesterday, we received another painful reminder of the serious economic challenge our country is facing when we learned that 533,000 jobs were lost in November alone, the single worst month of job loss in over three decades. That puts the total number of jobs lost in this recession at nearly 2 million.

But this isn't about numbers. It's about each of the families those numbers represent. It's about the rising unease and frustration that so many of you are feeling during this holiday season. Will you be able to put your kids through college? Will you be able to afford health care? Will you be able to retire with dignity and security? Will your job or your husband's job or your daughter's job be the next one cut?

These are the questions that keep so many Americans awake at night. But it is not the first time these questions have been asked. We have faced difficult times before, times when our economic destiny seemed to be slipping out of our hands. And at each moment, we have risen to meet the challenge, as one people united by a sense of common purpose. And I know that Americans can rise to the moment once again.

But we need action - and action now. That is why I have asked my economic team to develop an economic recovery plan for both Wall Street and Main Street that will help save or create at least two and a half million jobs, while rebuilding our infrastructure, improving our schools, reducing our dependence on oil, and saving billions of dollars.

We won't do it the old Washington way. We won't just throw money at the problem. We'll measure progress by the reforms we make and the results we achieve - by the jobs we create, by the energy we save, by whether America is more competitive in the world.

Today, I am announcing a few key parts of my plan. First, we will launch a massive effort to make public buildings more energy-efficient. Our government now pays the highest energy bill in the world. We need to change that. We need to upgrade our federal buildings by replacing old heating systems and installing efficient light bulbs. That won't just save you, the American taxpayer, billions of dollars each year. It will put people back to work.

Second, we will create millions of jobs by making the single largest new investment in our national infrastructure since the creation of the federal highway system in the 1950s. We'll invest your precious tax dollars in new and smarter ways, and we'll set a simple rule - use it or lose it. If a state doesn't act quickly to invest in roads and bridges in their communities, they'll lose the money.

Third, my economic recovery plan will launch the most sweeping effort to modernize and upgrade school buildings that this country has ever seen. We will repair broken schools, make them energy-efficient, and put new computers in our classrooms. Because to help our children compete in a 21st century economy, we need to send them to 21st century schools.

As we renew our schools and highways, we'll also renew our information superhighway. It is unacceptable that the United States ranks 15th in the world in broadband adoption. Here, in the country that invented the internet, every child should have the chance to get online, and they'll get that chance when I'm President - because that's how we'll strengthen America's competitiveness in the world.

In addition to connecting our libraries and schools to the internet, we must also ensure that our hospitals are connected to each other through the internet. That is why the economic recovery plan I'm proposing will help modernize our health care system - and that won't just save jobs, it will save lives. We will make sure that every doctor's office and hospital in this country is using cutting edge technology and electronic medical records so that we can cut red tape, prevent medical mistakes, and help save billions of dollars each year.

These are a few parts of the economic recovery plan that I will be rolling out in the coming weeks. When Congress reconvenes in January, I look forward to working with them to pass a plan immediately. We need to act with the urgency this moment demands to save or create at least two and a half million jobs so that the nearly two million Americans who've lost them know that they have a future. And that's exactly what I intend to do as President of the United States.

Thanks for listening.

More Background: Note this passage from an essay Rob Shapiro and I released in early November, A Stimulus for the Long Run: 

This change should be directed toward creating a 21st century, low-carbon, innovation-driven economy, as the development, spread and efficient use of economic innovations will continue to be the most important factors driving all our future progress in growth, productivity, and incomes. For example, productivity gains are increasingly tied to an employee's capacity to operate effectively in workplaces dense with information and telecommunications technologies. Within a decade, workers who cannot perform in such work environments will be marginalized economically. Therefore, the stimulus should help businesses and workers prepare for the ideas-based economy, through grants to community colleges to keep their computer labs open and staffed in the evenings and on weekends for any adult to walk in and receive free computer training, a plan Obama endorsed as Senator. The stimulus also could include an innovative program to provide inexpensive laptops to every sixth-grader in America and spread broadband installation to schools, local libraries, and human services offices that currently lack it.

There is already a broad consensus on the need to include infrastructure investment in the stimulus, but instead of addressing only roads and bridges, America can also take this opportunity to invest in a new generation of clean infrastructure. The federal government can lead the way, through greening its buildings and vehicle fleets and putting 1,000 megawatts of solar power on its roofs. It also can provide funding to help modernize the electrical grid and build a new generation of light rail systems for urban areas, as well as greater support for research and deployment in renewable energy and energy efficiency technologies, and tax credits and other incentives for greening America's homes and private buildings.

Aside from energy, the other rapidly rising business cost squeezing wages and jobs is health care. To help hold down these costs for the long haul, the stimulus can provide support for hospitals, clinics and physicians to purchase and install the hardware and software for standardized electronic medical records systems. This will serve as a first down payment for 21st century health care reform, and will ultimately reduce costs and promote best-practices at the nation's hospitals.

These are all investments we know we have to make if we intend to make the U.S. economy more efficient, innovative and sustainable. They also are all investments that will ultimate pay for themselves several times over. Congress and President-elect Obama can use this opportunity not only to create more jobs, but to do so in ways that will help drive the development of a real, 21st century workforce and genuine 21st century economic infrastructure. And taking this course by passing a stimulus for change could be an early and important opportunity for him to practice both his new politics and a new form of economic leadership.

Rough stuff from this week's edition:

FOR American and European savers it has been a lost decade. After two booms and two busts, stockmarkets have earned them nothing, or less, in the past ten years. Low interest rates have made bonds and bank deposits unrewarding too. Were it not for the tax relief they receive, contributors to personal pension plans would have been better off keeping their money under their mattresses. It will be little consolation to Westerners that savers in Japan have known this empty feeling for far longer.

This year's figures are enough to put anybody off saving. American mutual-fund assets have declined by $2.4 trillion-a fifth of their value-since the start of 2008; in Britain, the drop is more than a quarter, or almost £130 billion ($195 billion). The value of global stockmarkets has shrunk by maybe $30 trillion, or roughly half. These figures put the losses on credit-related securities-where the financial crisis began-into the shade.

Nor has the bad news been confined to equities. This year the value of all manner of risky investments, from corporate bonds to commodities to hedge funds, has been clobbered. The belief that diversification into "alternative assets" could prevent investors losing money in bear markets has proved false. And of course housing, which many people counted on for their retirement nest-eggs, has lost value too (see article).

As a result, saving seems like pouring money into a black hole (see article). Any American who has diligently put $100 a month into a domestic equity mutual fund for the past ten years will find his pot worth less than he put into it; a European who did the same has lost a quarter of his money.

Find the rest of this compelling editorial here.