Monday, January 17, 2011

Engineering a Recovery

I must apologize to my faithful reader for the lengthy hiatus in the production of my blog entries.  The most valid of the excuses that I might offer is that I have had a bout of what was apparently pneumonia, and that did cost me some weeks of normal functioning. I have, however, also ceased reporting “routine” European protests in these blogs: there are many of them, and they will increase when this harsh winter eases. What caught me  by surprise were the outbreaks of food and employment protests in Algeria, Jordan, and Tunisia, events that had no less an outcome than the ousting of the Tunisian dictator. Increases in food and gasoline (petrol) prices will also make the European austerity measures even more painful to endure, and this pain will also be felt in the USA where there are no federal austerity measures but sharp cuts at the state and municipal levels.

On my recent European wanderings, I saw little in the way of physical evidence of the austerity measures. Those measures are only now being implemented. The recession has itself left its mark in empty storefronts, and a taxi driver in Dublin told us that two large, formerly thriving pubs in Parnell Square, the Parnell Mooney and the Parnell Conway had closed because “nobody has any money to go out.”

Europe has, at any rate, seemed to me, over the last decade and more, more affluent than the USA. No doubt this appearance of general affluence stemmed in part from there not being the huge gap between rich and poor that the USA tolerates. In addition Europe has seemed far ahead technologically, whether in high speed rail transportation or broadband access. It has had , moreover, a social safety net in place to deal with unemployment and health problems. Rankings of nations by “quality of life” have supported my impressions, placing a country like Belgium, for instance, well ahead of the USA.

The cuts that are now in the works in Europe will be an assault on such “quality of life.” The social safety net will, in many instances, be cut away.During my recent illness, a few weeks ago, I saw and heard both George Osborne, the current Chancellor of the Exchequer, and Gordon Brown, who was Chancellor of the Exchequer for perhaps ten years before he became Prime Minister, admit in separate Fareed Zakaria interviews, that the coming cuts would not only be painful but would make recovery from the recession difficult. Both saw “growth” as the way to recovery and looked to “innovation” as the way to get the economy moving. Both praised the American record of innovation and looked forward to its next successes, especially in technology.

I was surprised by their candor: they were in effect admitting that the recovery in employment will not occur until the slow processes of product development have time to work. But I wondered whether they were right that we can trust American innovation to lead the way. We produce far fewer engineers than nations like China and India, so we have fewer minds to apply to product development. The products that we do “innovate” are not produced in this country but usually in Asia, so the products produce profits for some American-based corporations but few American jobs.  Our manufacturing base is, in fact, in poor shape because we have shipped the literal means of production--by which I here mean only machinery--overseas.

I recently asked a retired engineer, who had had a long career with one of the USA’s industrial giants, about our manufacturing capabilities. He said that the machines are not here, the parts are produced overseas, and we frankly can’t depend on domestic production any longer. He and I speculated what would happen if the USA had to re-tool for wartime production as we did so successfully in World War II.

Our production of engineers for American industry may not, furthermore, be quite at  the level that we assume it to be. Perhaps the situation has changed, but, over thirty years ago, as an assistant dean of a graduate school, I produced a report on foreign student enrollments in graduate programs in some Midwestern universities. I had not expected to find, as I did, that most of the graduate students in engineering were from other countries. Many remained here, of course, to work in American industry or teach in American  universities after receiving their degrees, but I know that complaints from industry are heard even today about how difficult it is to secure permission for these trained engineers to become residents.  And, with industry and university opportunities well developed in their home countries, these advanced degree recipients may today well prefer to return home. Indeed, they may choose to do their advanced degree work in their home countries.

We have, moreover, to face the fact that the USA ranks very low in the provision of the math and science education that produces engineers and thereby innovation. Singapore is likely to educate future engineers; East Boston, MA, is not. George Osborne and Gordon Brown may have to look elsewhere than to American innovation to engineer a recovery from the recession..