September 10, 2012

Solution to the Economic Problems of America

I read the cover story on Newsweek which talks about whether a college degree is all that it is cracked up to be.
I don't even want to talk here about stingy and weird American parents who pretend to be martyrs or heroes just because they 'paid' for their kids' college education. I mean ...
Anyway, here's a look at the economic brute facts of life for Americans and people of other advanced/developed nations.
Some things appear obvious to me as an Indian:

  • Americans whose mother tongue is English should not have to go to university to learn English. Not in the 21st  century.
  • Less lawyers are better.
  • Progress is unidirectional and not cyclical. The assembly line of Ford is not going to be re-invented. Ever. Hopefully we'll also never again be making airplanes and tanks by the thousands in assembly lines. Thousands of women are not going to be sitting at telephone exchanges. Managers typically work without secretaries now.
  • We live in a world of robotic assembly lines. The new jobs will be in clean technology or shell oil exploration or other new areas where humans have not been made obsolete yet.
  • In a few years, driving cars will become unessential or deprecated as a skill as we move towards a world of driverless cars.
  • Genetics and biotechnology and healthcare will produce jobs.
  • High technology manufacturing such as microprocessors and nanotechnology will be the wave of the future.

I like to sympathize with the situation that Americans and people in other advanced nations face. They are the ones who develop new stuff -- the Java programming language or other IT stuff. Then Indian youngsters merely memorize all that stuff and offer to become programmers at one-fifth the salary of Americans. Where does the American go?
Clearly, Americans have to stay ahead of the game by being not mere programmers but entrepreneurs who all have to start businesses.
Manufacturing has moved abroad. FOREVER. Whether to China or Philippines or India or Bangladesh.
The nature of the pyramid is such that it tapers towards the top. And the pyramid is the global economy today. It's interlinked. I like to use the metaphor of water in different bottles. As long as the bottles are not interlinked, there can be water stored to different heights in the different bottles. But once the bottles are connected to one another, water will seek to achieve the same level.
So also, in a globalized economy, I believe nations will no longer have such disparate living standards where the advanced nations have per capital GDP levels of $40,000 and the poor have $2,000. The standards of living will tend to seek an average level or gravitate towards the median.
And on the economic pyramid, there will be less numbers of people at the top compared to the bottom. The bottom is staffed at the moment by the teeming billions in the poor countries.
Unfortunately, even though the population of Europe and U.S. combined is about 700 million, that's WAY TOO MANY people to hope or expect that that many people will be wealthy.
There's no way that the world is going to be a place with 8 billion human beings where one billion are rick folks with average incomes of $40,000 per annum and the rest of the 7 billion make do with $2,000 per annum.
As Americans moan about the 8% unemployment and such, they might go on a tour of the Mumbai slums as some tourists apparently do. Though that is 'poverty porn', it will make them realize that people are so much worse than they are.
And if they want to make their lives better, well, for Americans, it's not enough to get a college degree. They need to do something more innovative.
I can offer a suggestion here for free which can employ at least 1,000 to 10,000 brave Americans:
What about moving to India? Have you heard of the medical tourism industry? Well, what about extending that business model to the next level?
What about opening hospices or palliative care facilities in India and transferring old people wholesale from America to India? Of course, it will require there to be old people brave enough to choose to live in India permanently till the end of their lives.
Since I can -- well, guess basically -- that the major cost of running old age homes would be personnel expenses -- nursing and stuff -- I think that cost can be reduced substantially if the facilities are transferred to India.
Anyway, that's enough free advice for a day.
Are you listening?
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