America 3.0 - Jonathan Taplin

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“Rebooting after the economic crash: IT, ET and America 3.0.”
Professor Jonathan Taplin , USC Annenberg School and ARNIC

The financial crisis will leave the next president with the task of rebuilding a shattered American economy. Professor Taplin will describe the potential roles of information technology and energy technology in America 3.0.

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  • America 3.0 - Jonathan Taplin

    1. 1. America 3.0 Rebooting after the American Crash
    2. 2. Taplin’s Blog-December 25,2007 <ul><li>“So where does the aforementioned dread come from? It comes from a sense of profound economic peril. We have lived as a country off the rich inheritance of past generations and now the party may be coming to a close.”  </li></ul>
    3. 3. Prof. Nouriel Roubini-10/9/08 <ul><li>“ A housing bubble, a mortgage bubble, an equity bubble, a bond bubble, a credit bubble, a commodity bubble, a private equity bubble, a hedge funds bubble are all now bursting at once in the biggest real sector and financial sector deleveraging since the Great Depression.” </li></ul>
    4. 4. Crashing Economy
    5. 5. Hidden Unemployment
    6. 6. The Conventional Wisdom
    7. 7. The Real Culprit
    8. 8. Overcapacity
    9. 9. America 1.0 <ul><li>We hold these truths to be self-evident, that all Men are created equal, that they are endowed by their creator with certain unalienable Rights, that among these are Life, Liberty and the Pursuit of Happiness </li></ul><ul><ul><ul><li>Thomas Jefferson </li></ul></ul></ul><ul><li>It will be our policy to cultivate tranquility at home and abroad and extend our commerce as far as possible </li></ul><ul><ul><ul><li>George Washington </li></ul></ul></ul>1776-1915
    10. 10. America 2.0-Making the World Safe for Democracy 1917-1980
    11. 11. America 2.5-The Conservative Revolution
    12. 12. The Neoconservative Gospel <ul><li>The twin poles of the Neoconservative philosophy first elucidated by Irving Kristol in The Public Interest in 1965: </li></ul><ul><ul><li>In domestic affairs the national government should shrink (by cutting taxes and business regulations) </li></ul></ul><ul><ul><li>In foreign affairs the government should grow (by becoming the world’s sole military superpower). </li></ul></ul>
    13. 13. Preemptive Wars & Tax Cuts The Long War
    14. 14. Something Had to Give The Upside of Down- Thomas Homer-Dixon
    15. 15. Creative Destruction <ul><li>“ Schumpeter’s signature legacy is his insight that innovation in the form of creative destruction is the driving force not only of capitalism but of material progress in general. Almost all businesses, no matter how strong they seem to be at a given moment, ultimately fail and almost always because they failed to innovate.” </li></ul>Joseph Schumpeter
    16. 16. The Interregnum The old is dying and the new cannot be born; in this interregnum there arises a great diversity of morbid symptoms.                            - Antonio Gramsci
    17. 17. The Interregnum of 1649
    18. 18. The End of Empire
    19. 19. Unobserved Revolution
    20. 20. The New Interregnum
    21. 21. Empires Always End
    22. 22. The Cost of Empire <ul><li>Imperial Overstretch </li></ul><ul><li>Cultural Decline </li></ul><ul><li>Accelerating Inequality </li></ul><ul><li>Scientific Regression </li></ul>
    23. 23. Signs of Decline Imperial Overstretch
    24. 24. Budget Priorities <ul><li>“ One cannot help but wonder: were there alternative ways of spending a fraction of the war’s $1-$2 trillion in costs that would have better strengthened security, boosted prosperity, and promoted democracy?”-Joseph Stiglitz, fmr. Chief Economist, World Bank </li></ul>
    25. 25. The Free Rider Problem
    26. 26. Do we get oil any cheaper? <ul><li>$700 Billion/year outflow for oil </li></ul>
    27. 27. Who Finances the U.S.?
    28. 28. Personal Savings Rate Source: Federal Reserve
    29. 29. Signs of Decline Scientific Regression
    30. 30. Education- 12th grade science scores Source: O.E.C.D.
    31. 31. Health Care <ul><li>The United States ranks 23rd in infant mortality, down from 12th in 1960 and 21st in 1990 </li></ul><ul><li>The United States ranks 20th in life expectancy for women down from 1st in 1945 and 13th in 1960 </li></ul><ul><li>The United States ranks 21st in life expectancy for men down from 1st in 1945 and 17th in 1960. </li></ul><ul><li>And yet, the United States spends at least 40% more per capita on health care than any other industrialized country with universal health care </li></ul><ul><ul><li>Source-WHO </li></ul></ul>
    32. 32. Global Warming
    33. 33. Energy Efficiency (BTU/GDP) <ul><li>1-Denmark </li></ul><ul><li>2-Switzerland </li></ul><ul><li>3-Japan </li></ul><ul><li>4-Italy </li></ul><ul><li>5-Ireland </li></ul><ul><li>6-Austria </li></ul><ul><li>7-Germany </li></ul><ul><li>8-France </li></ul><ul><li>9-Finland </li></ul><ul><li>10-United Kingdom </li></ul><ul><li>21-Portugal </li></ul><ul><li>22-Belgium </li></ul><ul><li>23-Norway </li></ul><ul><li>24-Argentina </li></ul><ul><li>25-Uruguay </li></ul><ul><li>26-Greece </li></ul><ul><li>27-Bangladesh </li></ul><ul><li>28-United States </li></ul><ul><li>29-Sri Lanka </li></ul><ul><li>30-El Salvador </li></ul>Source: International Energy Agency
    34. 34. Industry in Denial
    35. 35. Wars for Oil
    36. 36. U.S. Business Under Attack
    37. 37. Signs of Decline Cultural Decline
    38. 38. Capitalism’s Crisis <ul><li>“ It can no longer be assumed that welfare is greater at an all-around higher level of production than at a lower one. The higher level of production has, merely, a higher level of want creation necessitating a higher level of want satisfaction.”-J.K Galbraith, The Affluent Society </li></ul>
    39. 39. Disconnected Source: New York Times
    40. 40. Civil Unrest
    41. 41. U.S.Daily Gun Deaths=81
    42. 42. The Underground Economy <ul><li>$650 Billion per year </li></ul><ul><li>U.S. is world’s largest consumer of cocaine and methamphetamine </li></ul>
    43. 43. Brave New World
    44. 44. Bread and Circuses
    45. 45. Signs of Decline Accelerating Inequality without Regulation
    46. 46. U.S. Wages & Productivity Source: New York Times
    47. 47. 50 Million Jobs at Risk <ul><li>“ The total number of current U.S. service sector jobs that will be susceptible to offshoring in the electronic future is two to three times the total number of current manufacturing jobs”-Alan Blinder, former Fed Vice Chairman </li></ul>
    48. 48. Income Distribution
    49. 49. The Housing Bubble
    50. 50. The Fatal Move-6/4/04
    51. 51. Run On The Bank
    52. 52. Derivatives <ul><li> ” Derivatives are like hell… easy to enter and almost impossible to exit”. - Warren Buffet </li></ul>
    53. 53. America 3.0 Government, Technology & Innovation
    54. 54. Assumptions-1/21/09 <ul><li>Unemployment will be close to 8%. </li></ul><ul><li>The Christmas Retail season will have been the worst in 25 years. </li></ul><ul><li>Many retail bankruptcies or closures </li></ul><ul><li>More banks will have failed </li></ul><ul><li>States and Municipalities still having credit market problems </li></ul><ul><li>Credit card defaults and bankruptcies will have climbed significantly </li></ul>
    55. 55. Tools For Recovery
    56. 56. Mass Collaboration Extended Enterprise Industrial Age Corporation Value Creation Critical Resources Physical Financial Knowledge Self- Organization Traditional Hierarchy Business Webs Mass Collaboration
    57. 57. Think Globally, Act Locally “ All Innovation happens at the edge”-John Seely Brown
    58. 58. T he Role of Experimentation <ul><li>“ It is one of the happy incidents of the federal system that a single courageous state may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country.” –Justice Brandeis </li></ul>
    59. 59. Imagine 2020 <ul><li>Energy independent </li></ul><ul><li>Universal healthcare </li></ul><ul><li>Reduced carbon footprint </li></ul><ul><li>Highly educated public </li></ul><ul><li>Multi-lateral Foreign Policy </li></ul>
    60. 60. From Consumption to Investment <ul><li>“To provide a stable recovery path government spending needs to fill the gap – not consumption. Public works programs, badly needed infrastructure repairs, as well as spending on research and development projects should form the heart of our path to recovery.”-Bill Gross </li></ul>
    61. 61. R & D + Infrastructure $500 Billion per year
    62. 62. How do we pay for it? <ul><li>Freedom Energy Tax </li></ul><ul><ul><li>$146 Billion-in gas taxes </li></ul></ul><ul><ul><li>$170 in other carbon taxes </li></ul></ul><ul><ul><li>90% to states ($31 Billion/yr. to Calif.) </li></ul></ul><ul><ul><li>10% to Alternative Energy R & D </li></ul></ul><ul><li>No payroll taxes for below $40 K earners </li></ul><ul><li>Cut Federal Middle class Tax bracket but restore Clinton era taxes on wealthy ($250K+) </li></ul><ul><li>Raise Corporate Taxes back to the postwar norm </li></ul>
    63. 63. Capital Investment Debt
    64. 64. Harness Nature “ We only need to capture 1 percent of 1 percent of the sunlight to meet all of our energy needs (3 percent of 1 percent by 2025) and nano-engineered solar panels and fuel cells will be able to do this.”-Ray Kurzweil
    65. 65. Modern Nuclear Power
    66. 66. Modern Transportation LA-San Francisco in 2 hours with minimal pollution
    67. 67. Universal Broadband
    68. 68. Rebuild Bridges and Highways
    69. 69. Education <ul><li>Double Teacher Salaries </li></ul><ul><ul><li>U.S. High School Teacher-$36,000 (1.2x average income) </li></ul></ul><ul><ul><li>Korean High School Teacher-2.5x average income </li></ul></ul><ul><li>Cut Classroom Size </li></ul>
    70. 70. Universal Health Care <ul><li>The U.S. pays $98 billion a year in excess administrative costs, with more than half of the total accounted for by marketing and underwriting — costs that don’t exist in single-payer systems. </li></ul><ul><li>The U.S. pays $66 billion a year in excess drug costs, and overpays for medical devices </li></ul><ul><ul><ul><li>McKinsey & Co. Report </li></ul></ul></ul>
    71. 71. Become World Leader in ET and IT

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