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At the St. Petersburg exposition center, showing off the Russian economy, the two biggest display
booths belonged to Gazprom, the state-controlled oil and gas company, and Sberbank, Russia’s largest
state-owned bank. Russian companies that actually made things that the world wanted were virtually
nonexistent: Two-thirds of Russia’s exports today are oil and gas. Gazprom makes the money, and
Sberbank lends it out.
As one Western banker put it, when oil is $35 a barrel, Russia “has no choice” but to reform, to diversify
its economy and to put in place the rule of law and incentives that would really stimulate small business.
But at $70 a barrel, it takes an act of enormous “political will,” which the petro-old K.G.B. alliance that
dominates the Kremlin today is unlikely to summon. Too much rule of law and transparency would
constrict the ruling clique’s own freedom of maneuver.
China is also courting trouble. Recently — in the name of censoring pornography — China blocked
access to Google and demanded that computers sold in China come supplied with an Internet nanny filter
called Green Dam Youth Escort, starting July 1. Green Dam can also be used to block politics, not just
Playboy. Once you start censoring the Web, you restrict the ability to imagine and innovate. You are
telling young Chinese that if they really want to explore, they need to go abroad.
We should be taking advantage. Now is when we should be stapling a green card to the diploma of any
foreign student who earns an advanced degree at any U.S. university, and we should be ending all H-1B
visa restrictions on knowledge workers who want to come here. They would invent many more jobs than
they would supplant. The world’s best brains are on sale. Let’s buy more!
Barrett argues that we should also use this crisis to: 1) require every state to benchmark their education
standards against the best in the world, not the state next door; 2) double the budgets for basic scientific
research at the National Science Foundation, the Department of Energy and the National Institute of
Standards and Technology; 3) lower the corporate tax rate; 4) revamp Sarbanes-Oxley so that it is easier
to start a small business; 5) find a cost-effective way to extend health care to every American.
We need to do all we can now to get more brains connected to more capital to spawn more new
companies faster. As Jeff Immelt, the chief of General Electric, put it in a speech on Friday, this moment is
“an opportunity to turn financial adversity into national advantage, to launch innovations of lasting value to
our country.”
Sometimes, I worry, though, that what oil money is to Russia, our ability to print money is to America.
Look at the billions we just printed to bail out two dinosaurs: General Motors and Chrysler.
Lately, there has been way too much talk about minting dollars and too little about minting our next
Thomas Edison, Bob Noyce, Steve Jobs, Bill Gates, Vint Cerf, Jerry Yang, Marc Andreessen, Sergey Brin,
Bill Joy and Larry Page. Adding to that list is the only stimulus that matters. Otherwise, we’re just Russia
with a printing press."
That paragraph about bailing out our dinosaurs is pretty strong stuff for a liberal like Friedman, which
probably makes me all the more appreciative of his comments.
There are some things in his article I might quibble with but on the whole, I think it is right on the mark. And
that brings me to a point I think is important. Not only are we printing money to save the old economy but
we are also printing money to pursue politically correct new technologies, specifically “green” energy
initiatives. Now it might be a perfectly good investment in the future but it seems as if we are placing all of
our bets on this one venue.
Why aren’t we channelling money to nanotechnology, robotics, genetic engineering or any of a number
ofother promising technologies. The one thing that can be counted on is that the next big wave of
invention and innovation is more likely to come from someplace we least expect as opposed to the
technology we try to force feed.
Anyway, a hat tip to Friedman for some very good thoughts.
Original Article
| Inventing Our Way to Prosperity by Tom Lindmark, June 29, 2009 |
I’m not a big fan of Thomas Friedman but I must say I was taken by his opinion
piece in the NYT today. In it Friedman argues that the way out of the mess we find
ourselves in is to invent and innovate. Here from the Times is the essence of what
he has to say:
"Russia, it seems to me, is clearly wasting this crisis. Oil prices rebounded from
$30 to $70 a barrel too quickly, so the pressure for Russia to really reform and
diversify its economy is off. The struggle for Russia’s post-Communist economic
soul — whether it is going to be more OPEC than O.E.C.D., a country that derives
more of its wealth from drilling its mines than from tapping its minds — seems to
be over for now.
piece in the NYT today. In it Friedman argues that the way out of the mess we find
ourselves in is to invent and innovate. Here from the Times is the essence of what
he has to say:
"Russia, it seems to me, is clearly wasting this crisis. Oil prices rebounded from
$30 to $70 a barrel too quickly, so the pressure for Russia to really reform and
diversify its economy is off. The struggle for Russia’s post-Communist economic
soul — whether it is going to be more OPEC than O.E.C.D., a country that derives
more of its wealth from drilling its mines than from tapping its minds — seems to
be over for now.
| ButThenWhat.com is an attempt to connect dots and figure out what is going on in business and politics, stripping away personal interest. Lindmark's Bio Visit the blog at ButThenWhat,com. |
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