CautiousInvestor

America's Multiple Choice Economy

Steve, I think we are seeing the beginnings of a statistical recovery and it may continue for some time but it's the long term structural issues which concern me. We all know about the delevering of the consumer, government borrowing crowding out private investment, increased regulation higher taxes, a falling dollar, continued weakness in housing, stubbornly high unemployment collapsing international trade, an aging workforce and other economic imbalances.

It's the unseen structural issues lurking below the radar that concern me; it's the things we can not see that trouble me because when we see them they will appear as surprises, catching us unprepared. For example, more and more US companies are undertaking R&D overseas and I just recently read that many highly educated Chinese and Indians plan to return home rather than pursue careers and/or business interests here in the states. The cost of both could be enormous but the latter could be a sea change and a game changer in terms of innovation and sources of future jobs:

"But a growing body of evidence indicates that skilled foreign immigrants create jobs for Americans and boost our national competitiveness. More than 52% of Silicon Valley’s startups during the recent tech boom were started by foreign-born entrepreneurs. Foreign-national researchers have contributed to more than 25% of our global patents, developed some of our break-through technologies, and they helped make Silicon Valley the world’s leading tech center. Foreign-born workers comprise almost a quarter of all the U.S. science and engineering workforce and 47% of science and engineering workers who have PhDs. It is very possible that some of the smart Indians who sat in the room with me holding their hand up on Columbus Day will start the next Google or Apple. Many of them will build companies which employ thousands. But the jobs will be in Hyderbad or Pune, not Silicon Valley."