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Explaining the Great Recession and Anemic  Job Recovery: The Role of Faltering U.S.  International Competitivenes
Explaining the Great Recession and Anemic  Job Recovery: The Role of Faltering U.S.  International Competitivenes
Explaining the Great Recession and Anemic  Job Recovery: The Role of Faltering U.S.  International Competitivenes
Explaining the Great Recession and Anemic  Job Recovery: The Role of Faltering U.S.  International Competitivenes
Explaining the Great Recession and Anemic  Job Recovery: The Role of Faltering U.S.  International Competitivenes
Explaining the Great Recession and Anemic  Job Recovery: The Role of Faltering U.S.  International Competitivenes
Explaining the Great Recession and Anemic  Job Recovery: The Role of Faltering U.S.  International Competitivenes
Explaining the Great Recession and Anemic  Job Recovery: The Role of Faltering U.S.  International Competitivenes
Explaining the Great Recession and Anemic  Job Recovery: The Role of Faltering U.S.  International Competitivenes
Explaining the Great Recession and Anemic  Job Recovery: The Role of Faltering U.S.  International Competitivenes
Explaining the Great Recession and Anemic  Job Recovery: The Role of Faltering U.S.  International Competitivenes
Explaining the Great Recession and Anemic  Job Recovery: The Role of Faltering U.S.  International Competitivenes
Explaining the Great Recession and Anemic  Job Recovery: The Role of Faltering U.S.  International Competitivenes
Explaining the Great Recession and Anemic  Job Recovery: The Role of Faltering U.S.  International Competitivenes
Explaining the Great Recession and Anemic  Job Recovery: The Role of Faltering U.S.  International Competitivenes
Explaining the Great Recession and Anemic  Job Recovery: The Role of Faltering U.S.  International Competitivenes
Explaining the Great Recession and Anemic  Job Recovery: The Role of Faltering U.S.  International Competitivenes
Explaining the Great Recession and Anemic  Job Recovery: The Role of Faltering U.S.  International Competitivenes
Explaining the Great Recession and Anemic  Job Recovery: The Role of Faltering U.S.  International Competitivenes
Explaining the Great Recession and Anemic  Job Recovery: The Role of Faltering U.S.  International Competitivenes
Explaining the Great Recession and Anemic  Job Recovery: The Role of Faltering U.S.  International Competitivenes
Explaining the Great Recession and Anemic  Job Recovery: The Role of Faltering U.S.  International Competitivenes
Explaining the Great Recession and Anemic  Job Recovery: The Role of Faltering U.S.  International Competitivenes
Explaining the Great Recession and Anemic  Job Recovery: The Role of Faltering U.S.  International Competitivenes
Explaining the Great Recession and Anemic  Job Recovery: The Role of Faltering U.S.  International Competitivenes
Explaining the Great Recession and Anemic  Job Recovery: The Role of Faltering U.S.  International Competitivenes
Explaining the Great Recession and Anemic  Job Recovery: The Role of Faltering U.S.  International Competitivenes
Explaining the Great Recession and Anemic  Job Recovery: The Role of Faltering U.S.  International Competitivenes
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Explaining the Great Recession and Anemic Job Recovery: The Role of Faltering U.S. International Competitivenes

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The Great Recession officially ended more than two years ago but the recovery is barely perceptible and anxious policymakers are running out of options. Washington cannot seem to agree on what caused …

The Great Recession officially ended more than two years ago but the recovery is barely perceptible and anxious policymakers are running out of options. Washington cannot seem to agree on what caused the Recession in the first place or how to create robust job growth. One camp argues for revving up consumer demand through fiscal and monetary policy. The other says the financial system got out of control and we just have to wait for our books to get back into balance.

Remarkably, neither of the dominant schools of thought focuses on the principal cause of the Great Recession and our current anemic jobs recovery- the collapse of U.S. manufacturing and innovation-based competitiveness over the last generation. Faulty diagnosis leads to ineffective cures. It's time for a new approach grounded in a new diagnosis.

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  • 1. December 5, 2011Explaining the Great Recession and AnemicJob Recovery: The Role of Faltering U.S.International CompetitivenessDr. Robert D. AtkinsonPresidentInformation Technology and Innovation Foundation
  • 2. How do we Explain These Symptoms? 2
  • 3. How do we Explain These Symptoms? Source: University of Michigan Surveys of Consumer 3
  • 4. How do we Explain These Symptoms? 4
  • 5. The Seven Diagnoses of U.S. Economic Travails 5
  • 6. The Seven Diagnoses of U.S. Economic Travails1) More Stimulus is Needed: This is a Severe Keynesian Contraction 6
  • 7. The Seven Diagnoses of U.S. Economic Travails2) Face Facts: Financial Crises Just Take a Long Time to Recover From 7
  • 8. The Seven Diagnoses of U.S. Economic Travails3) Why Invest With all This Regulatory Uncertainty? 8
  • 9. The Seven Diagnoses of U.S. Economic Travails4) There Are Lots of Jobs, But Few Workers With the Skills. 9
  • 10. The Seven Diagnoses of U.S. Economic Travails5) The Gas Tank of Innovation is Empty 10
  • 11. The Seven Diagnoses of U.S. Economic Travails6) The Gas Tank of Innovation is Full, and the Robots Are Taking Our Jobs 11
  • 12. The Seven Diagnoses of U.S. Economic Travails7) U.S. Competitiveness Failure 12
  • 13. Loss of Non-Traded Sector Output Is Quickly Made Up
  • 14. Loss of Traded Sector Output Is Not
  • 15. “It’s the Traded Sector Stupid”If the U.S. loses traded sector output fromimported sector output, demand is met but not inthe U.S. Laid-off workers don’t get easily reemployed. This can be a stiff wind against recovery andgrowth. For every step forward, there’s one back.
  • 16. Manufacturing Jobs and Overall Job Growth Are Related30% 19% 20%20%10% 4.50% 0% -1% Overall Job Growth -7%-10%-20% Manufacturing Jobs Decline-30% -32%-40% 1980s 1990s 2000-2008 16
  • 17. U.S. Manufacturing: The Agriculture Story? 17
  • 18. U.S. Manufacturing: Or the “Rust Nation” Story? 18
  • 19. U.S. Manufacturing Jobs Fell Precipitously in the Last Decade25000200001500010000 5000 0 19
  • 20. But Not Largely Because of Productivity2000018000 56 %1600014000 61 %1200010000 8000 6000 4000 2000 0 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20
  • 21. Share of Manufacturing Jobs Lost Great Depression 0 -5-10-15-20-25-30-35
  • 22. Share of Manufacturing Jobs Lost The 2000’s 0 -5-10-15-20-25-30-35
  • 23. U.S. Manufacturing Job Growth is Worst in OECD Sample100%90%80%70%60% manuf job growth as share of pop50% growth -97-201040%30%20%10% Correlation between change in manufacturing jobs from 87 to 0% 2005 and total change in employment from 2005 to 2010 was 0.57. 23
  • 24. Sum of Annual Real GDP Changes353025201510 5 0 1980-89 1990-1999 2000-2009 24
  • 25. Manufacturing Contribution to Sum of Annual Real GDP Change8.00%6.00%4.00%2.00%0.00% 80s 90s 2000s-2.00%-4.00%-6.00% 25
  • 26. Sum of Annual Real GDP Changes Had Manufacturing Shares Not Declined 35 30 25 20 15 10 5 0 1980-89 1990-99 2000-09 26
  • 27. Additional Manufacturing Jobs Had Manufacturing Grown at GDP Rate This Decade 2.2 million 27
  • 28. Thank YouRobert Atkinson ratkinson@itif.orgFollow ITIF: Facebook: facebook.com/innovationpolicy Blog: www.innovationpolicy.org YouTube: www.youtube.com/user/techpolicy Website: www.itif.org Twitter: @robatkinsonitif 28

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