Globalization, green technology, and Obama

Economic booms happen because of leading sectors of economies. The introduction and adaptation of new technology allows the economy to create new wealth and grow at a higher (absolute rather than relative) rate. The world has experienced a very steady influx of new technologies (materials, banking, managerial, manufacturing, art/entertainment).

After we adapt to these technologies, we look back and say, "There is the source of our economic prosperity. Let's do more of that!" This turns out to be a fairly foolish thing to do. Other countries eventually adapt our efficiency gains, and, because they are less wealthy, do what we do for cheaper. This makes the only profitable sectors for rich countries sectors with extremely high capital (including worker education) input costs, sectors that take advantage of difficult to transport resources, and new sectors.

If we are to remain an exceptional nation, it is necessary to re-invest the gains from each fo our booms into the next major sector. Apparently, we were supposed to invest in green technologies circa 2000. We missed that opportunity, but so did everyone else. It has become more costly, with the contraction of the world economy, to seize this opportunity. We probably should still (though our gains will be much less).

This is all very interesting to me.