Great to Good - David Gergen

Canada is now more closely integrated with the American economy than at any time in our history. That means what lies in store for the United States will spill over into our country to some degree. It gives us every reason to keep a close eye on the American economic engine and what Washington is doing to it.

Here's an eye-opener from one of America's best journalists, David Gergen, published this summer in U.S. News and World Report:

"The grim truth is that the political leadership of the country, especially in Washington, is almost dysfunctional in grappling with the big issues bearing down on us. From energy to education, climate change to healthcare, budget deficits to trade deficits, progress is perilously slow. And time is definitely not on our side.

"Yet another important voice on America's future weighed in last week with a provocative presentation to the Federal Reserve Bank of Boston's economic conference. Harvard's Richard Freeman, a well-respected labor economist, argued that we have been sugarcoating the impact that China, India, and the former Soviet Union may have upon jobs and incomes in America in coming years. Unless we find some answers, our children--and certainly our grandchildren--will be in for a very rough ride.

"Double whammy. Freeman points out that the world is undergoing two transformations that are unprecedented in all history. First, there is an explosion in the size of the world's labor force. If we were still in the 20th century, by his estimates, the total labor force competing in the world economy would be about 1.5 billion people. But with giants like China, India, and Russia now entering the fray, we begin the 21st century with an additional 1.5 billion people who are competing. The world's workforce has literally doubled in the twinkling of an eye.

"Had the giants remained mostly uneducated and rural, America could easily have retained its pre-eminence, as the old North-South models of development would hold here, too. But they have decided instead to pour investments into science and engineering, as have Japan, Korea, and Europe. The results are eye popping: In 1970, U.S. students represented 30 percent of all university enrollments worldwide; by 2000, that had dropped to just 14 percent. The U.S. share of Ph.D.'s around the world is also plummeting, from about 50 percent in the early 1970s to a projected level of 15 percent in 2010. By a separate estimate, within just five years, Asia will have produced 90 percent of the world's scientists. Never before has there been such an explosion in the world's knowledge workers."

There is no shortage of challenges our government will have to face in the coming decades but this one certainly can't be ignored.