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If we act boldly, then our economy will be less vulnerable to economic disruption, our trade balance will improve, the pace of U.S. technological innovation will accelerate, and the American worker will be in a stronger position to adapt to the global economy," states Barack Obama, the Democratic U.S. Senator of Illinois, in his new book "The Audacity of Hope". Senator Obama lays out a vision for reclaiming the American Dream aided by a government built on our best traditions, representing our everyday lives, uniting our common hopes and dreams, and creating an unbreakable bond.
Senator Obama has recently been picked to represent the Health, Education, Labor and Pensions committee, along with the Homeland Security and Governmental Affairs committee. He says keeping the American people safe should always be our top priority. He will also work for the Foreign Relations committee, and the Veterans' Affairs committee. Working simultaneously in four different committees is an honor, a measure of respect, and a remarkable feat for any U.S. Senator. He was also on the cover of Time Magazine hinting of a run for the presidency in 2008.
Three Innovation Opportunities
Senator Obama is not only focused on promoting economic growth and bringing good paying jobs to Illinois, but also creating substantial innovative opportunities in education, science and technology, and energy for America. In his book, he talks about how "investments in all these three key areas (education, science and technology, and energy) would go a long way in making America more competitive." He agrees that none of these investments will produce immediate results; these investments will actually cost money and resources in the near term. However, he believes that such investments in R & D and education, increasing fuel efficiency of American cars (e.g. Tesla), instituting performance pay for public-school teachers, understanding the feasibility of school vouchers and evaluating the viability of hydrogen fuel cells are necessary.
"But while the means we use to accomplish these ends should be subject to vigorous and open debate, the ends themselves shouldn't be in dispute," states Senator Obama in a prose reminiscent of President Abraham Lincoln. He emphasizes that "like those before us, we should be asking ourselves what mix of policies will lead to a dynamic free market and widespread economic security, entrepreneurial innovation and upwards mobility." He even asks us to be guided by President Lincoln's simple maxim: "that we will do collectively, through our government, only those things that we cannot do well or at all individually and privately."
Globalization
Whereas Senator Obama observes that globalization has brought significant benefits to American consumers such as lowered prices on goods including big-screen TVs and winter fruits, increased the purchasing power, kept inflation in check, boosted stock returns, created new markets for U.S. companies overseas, and even reduced poverty in foreign countries; however, globalization has also increased economic instability for millions of ordinary Americans as more U.S. companies have automated, downsized, outsourced, and offshored. Obama believes the effects of globalization create a so-called "winner-take-all" economy where a rising tide doesn't lift all the boats. Knowledge workers such as engineers, lawyers, consultants, doctors, marketers are doing well now; however, blue-collared workers whose skills can be automated, digitized, outsourced or offshored for less are clearly hurting.
Senator Obama asserts that "our greatest asset has been our system of social organization, a system that for generations has encouraged constant innovation, individual initiative, and the efficient allocation of resources." The classic paradox is whether we should consider our free-market system as a given and let it ride naturally - "laissez-faire", or whether our government should take action to open up opportunity, encourage competition, and make the market work better. In the past government has been called upon to build the infrastructure, train the workforce, and lay foundations necessary for economic growth. For President Lincoln, the essence of America was opportunity, the ability of "free labor" to advance in life.
Government Innovations
Senator Obama provides several examples on how our government has provided individuals the tools to adapt and innovate in a climate of constant technological change. From the GI Bill that made college education available to millions, to the creation of public schools, universities and institutions of higher education, formation of National Academy of Sciences, Homestead Act, Hoover Dam, interstate highway system, Tennessee Valley Authority, Darpa, Internet, Human Genome Project, Federal Reserve Bank, Food and Drug Act, Meat Inspection Act, FDR's New Deal, Securities and Exchange Commission, FDIC insurance, tax cuts, Social Security, forty-hour workweek, child labor laws, minimum wage act, National Labor Relations Act, and the Great Society programs including Medicare, Medicaid, Welfare, EPA and Occupational Health and Safety Administration -- countless innovations through out the history led by our great leaders.
Senator Obama makes a fundamental point that "capitalism is not standing still." The unavoidable globalization, competition, and technological revolution stifle our economy and frustrate our people. He makes a strong case for investments that can make America more competitive in the global economy: investments in education, science and technology, and energy independence. He provides examples of schools in Chicago where students only get a few hours of school each day: the number one issue being the school district cannot afford to pay the teachers for one whole day. He talks about workers who have lost their jobs because companies want more profits or can't compete. He discusses the rising gas prices and our dependence on oil to the tune of $800 million dollars every day.
Education Innovations
It is evident that Senator Obama deeply cares about education. He emphasizes innovation and bold reforms in education. He recommends that we should "identify those reforms that have the highest impact on student achievement, fund them adequately, and eliminate those programs that don't produce results." He provides some examples of education reform and suggests that we have many good ideas, but we don't do a great job of executing on them. For instance, challenging and rigorous curriculum with emphasis on math, science and literacy skills; longer hours and more days to give children the time and sustained attention they need to learn; early childhood education for every child, so they're not already behind on their first day of school; meaningful, performance-based assessments that can provide a fuller picture of how a student is doing; and the recruitment and training of transformative principals and more effective teachers. He believes that teachers should be held accountable, and at the same time rewarded for their effectiveness -- even salaries of $100,000 a year based on experience, performance and qualification. Obama also emphasizes need for higher education reform, especially for science, engineering and technology, and management of rising cost of public college tuition that has risen 40 percent over the last five years. Finally, direct help in meeting college expenses in the form of grants, low-interest loans, tax-free educational savings accounts, or full tax deductibility of tuition and fees.
Science And Technology Innovations
Senator Obama has a concrete plan for maintaining our scientific and technological edge that will spearhead future innovations: the plan will cost $42 billion over five years. He recommends that "if we want an innovation economy, one that generates more Googles each year, then we have to invest in our future innovators -- by doubling federal funding of basic research over the next five years, training one hundred thousand more engineers and scientists over the next four years, or providing new research grants to the most outstanding early-career researchers in the country." He believes this is necessary to maintain America's competitive edge. He refers to the Morrill Act signed by President Lincoln that created the system of land grant colleges, institutions of higher learning, and nation's primary research and development laboratories. He asserts that these institutions have inspired and created nation's innovators, and applied research from such institutions has resulted in commercial applications.
Energy Innovations
Finally, Senator Obama calls for energy independence. He believes that if we are to become more competitive, we have to build an energy infrastructure. U.S. demand for oil will jump 40 percent over the next twenty years; further our dependence on foreign oil only serves the interests of volatile regimes. Oil erodes the environment. When U.S. has only 3 percent of the world's oil reserves, and uses 25 percent of the world's oil, alternatives must be sought: create renewable, cleaner energy sources for the twenty-first century. He proposes that "we should end every single tax break the industry currently receives and demand that 1 percent of the revenues from oil companies with over $1 billion in quarterly profits go toward financing alternative energy research and the necessary infrastructure." Obama touts Brazil as a good example where a mix of regulation and direct government investment has developed a highly efficient biofuel industry and 70 percent of new vehicles run on sugar-based ethanol instead of gasoline. Obama believes that regulation when applied with flexibility and sensitivity to market forces can actually spur private sector innovation and investment in the energy sector. Fuel-efficient cars and alternative fuels are the future of the auto industry. Obama proposed legislation called "Health Care for Hybrids" that makes a deal with U.S. automakers: "In exchange for federal assistance in meeting the health-care costs of retired autoworkers, the Big Three would reinvest these savings into developing more fuel-efficient vehicles." Obama thinks that investments in alternative fuel sources will lead to creation of thousands of new jobs.
Uncommon Insights
Senator Obama shares with us insights from Robert Rubin, the former U.S. Treasury secretary under President Bill Clinton, and Warren Buffet. Rubin suggests that "there's no limit to human ingenuity." The insight gained from Rubin is that we can slow globalization, but can't stop it. For instance, when one buys an American good, it could be developed by overseas software programmers and packaged outside our borders. Billionaire Buffet shares an uncommon insight that he will be paying a lower effective tax rate than his receptionist. Not only that, he is paying a lower rate of tax than the average American. Buffet believes that "some of that wealth (rich people) has to be plowed back into education, so that the next generation has a fair chance, and to maintain our infrastructure, and provide some sort of safety net for those who lose out in a market economy." What Buffet is essentially reverberating is a "change in spirit, a willingness to put our common interests and the interests of future generations ahead of short-term expediency."
Bottomline:
Senator Obama is a visionary of the future, grounded in history and tradition, analytical yet convincing, and progressive in his prescription for change. He is a creative innovator who believes in an active government creating an environment that facilitates reforms in education, science and technology, and energy. He believes that strategic investments in these three key areas will empower America to battle globalization, and create a stronger economy that will create countless new opportunities for innovators and workers alike.
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