It is fitting that the G-20 meet in Pittsburgh at this time. As White House spokesman Robert Gibbs explained, “[Pittsburgh] has seen its share of economic woes in the past, but because of foresight and investment is now renewed, giving birth to renewed industries that are creating the jobs of the future.”
Gibbs is right, in part. Pittsburgh has come back from enormous setbacks in its dominant industry, steel. A combination of deliberate planning, public investment, and partnerships between government and private industry created a new, mixed economy better able to compete in challenging new conditions.
But optimism is only half the story. As we documented in our earlier report, “Pittsburgh, The Rest of The Story,” Pittsburgh’s comeback reveals the limitations of local efforts. In the absence of a national industrial strategy and a different approach to trade, the U.S. will be lucky to end up where Pittsburgh is now. It’s not the cellar, but it isn’t the Super Bowl either. Pittsburgh’s population is declining and its young people are leaving. Many high-paying jobs in manufacturing were replaced with low-paying jobs as waiters or hotel clerks, and many were never replaced at all. Real attention is needed to address the unsolved half of the problem.
America grew up as an industrial superpower, from mass-produced automobiles to the Arsenal of Democracy. But our once-robust system of economic production — the invention, design and manufacture of products — has been steadily eroded. In its place has come an economy based on asset bubbles and foreign borrowing. We’ve shifted from production to consumption, from high wages to low wages, from creditor to debtor. Even when the economy was growing, we ran a current account deficit in excess of $700 billion every year. We borrow $2 billion every day to cover the difference.
That strategy was never sustainable and is no longer available. Now is the time for a new economic strategy, one based on balanced growth for the nation and living wages for the people. As President Barack Obama said in April, we need a larger vision of America’s future:
“…. a future where sustained economic growth creates good jobs and rising incomes; a future where prosperity is fueled not by excessive debt, or reckless speculation, or fleeting profits, but is instead built by skilled, productive workers, by sound investments that will spread opportunity at home and allow this nation to lead the world in the technologies and the innovation and discoveries that will shape the 21st century.”