Vision - September/October 2007 - (Page 2) ShapirO’S Spectrum on the consumer electronics horizon “Few presidential candidates advocate a strategy which recognizes that employers create jobs and business drives the economy.” I The End of the World As We Know It? usually see the silver lining, but today I’m concerned that our economic veneer shimmers thinly. We have to ask some tough questions: Are we living beyond our means? Interest rates creep higher. Adjustable rate mortgages shift up. Home equity and credit card debt rise. With negative savings and home foreclosures jumping triple digits, are we spiraling into a hole of massive debt? As Americans, have we become complacent? What happened to fiscal responsibility? Has the Internet bubble been replaced by the private equity bubble? Private equity is free market economics—but so were the Internet and Tulip bubbles. Too much is being paid for assets which cannot be squeezed for the type of return investors expect. Are we too dependent on one country? We rely heavily on China for products, yet China is under attack for piracy, unsafe products, environmental and labor abuses. Emotional cries for protectionism are drowning out the reasoned voice of free trade. Have we placed all our eggs in a basket that is slowly and surely ripping? Can our political leaders meet the challenge? Partisan politics dominate. On Capitol Hill, compromise has become a dirty word. Our government is paralyzed on domestic issues from social security to September/October 2007 immigration, from health care to energy independence. The uncertain presidential election highlights our near term economic risk. Few presidential candidates advocate a strategy which recognizes that employers create jobs and business drives the economy. Few talk about a national strategy—immigration reform to attract the world’s best and the brightest, policies which encourage technology and new investment, easing ways for entrepreneurship and investing in the physical and human infrastructure which can ensure our future greatness. My bet is at odds with my wishes. I want a strong economy, but I fear that unless we change the tone in Washington, exercise fiscal responsibility, recognize the value of employers, entrepreneurs and free trade, reduce the corporate tax rate and rationalize Sarbanes Oxley, recession is a real possibility. We all cope with change differently. Soon after the second plane hit on Sept. 11, one line from an REM song played through my head—“It’s the end of the world as we know it.” A downturn in our economy may be unavoidable. We haven’t had anything serious since 1981, with some hiccups in 1990–91 and the pull back in late 2001. More than a generation of prosperity! Are we too complacent? I think so. This leader believes that complacency is the enemy of continued success. Eventually the devil gets his due and I hear the devil at the door. We can keep the devil away if we face the facts and mend our ways. • How can the U.S. Stay on Top? The best scenario is that technology driven growth and foreign investment will continue to propel our country. The Microsoft/Google/Apple/HP/Dell juggernaut and their entrepreneurial progeny will retain us as a center of greatness. High octane broadband competition, innovation, new Internet and wireless services will fuel our economic engine. But, alternatively, our nation could drift downward burdened by consumer and government debt. In this case, a weaker dollar and lowered interest rates can keep our economy somewhat stable. www.ce.org Grant Taylor/Getty Images http://www.ce.org
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