Peabody Award winners on Fresh Air:
We have this debate in America that is almost a theoretical debate about the role of government in the economy and whether government should be involved, and I worry that while we’re having this theoretical debate, on the other side of the world, the Chinese government is vigorously promoting industry after industry, the German government is vigorously promoting its manufacturing center, the South Korean government is vigorously promoting its manufacturing sector — and by the time we’ve resolved our debate, there won’t be any industries left to compete in. It is absolutely clear that government plays a key role, as a catalyst, in promoting long-run growth.
— Fareed Zakaria, on the relationship between government and innovation. [complete interview here]
The tallest building in the world is now in Dubai, the biggest factory in the world is in China, the largest oil refinery is in India, the largest investment fund in the world is in Abu Dhabi, the largest Ferris wheel in the world is in Singapore. And … more troublingly, [the United States is] also losing [its] key grip on indices such as patent creation, scientific creations and things like that — which are really harbingers of future economic growth.
— On today’s Fresh Air, Fareed Zakaria explains why America is lagging behind other countries on indices that indicate long-term economic growth.
The problem with the U.S. government is that its allocation of resources is highly inefficient. We spend vast amounts of money on subsidies for housing, agriculture and health, many of which distort the economy and do little for long-term growth. We spend too little on science, technology, innovation and infrastructure, which will produce growth and jobs in the future. For the past few decades, we have been able to be wasteful and get by. But we will not be able to do it much longer. The money is running out, and we will have to marshal funds and target spending far more strategically. This is not a question of too much or too little government, too much or too little spending. We need more government and more spending in some places and less in others. The tragedy is that Washington knows this. For all the partisan polarization there, most Republicans know that we have to invest in some key areas, and most Democrats know that we have to cut entitlement spending. But we have a political system that has become allergic to compromise and practical solutions. This may be our greatest blind spot.
Tomorrow: Fareed Zakaria talks about America’s decline and the rise of the rest of the world.