What will it take to reignite American prosperity? Many believe the answer is to revive consumption, but PPI believes production is the key.
In a policy brief released today, I call for turning the old economic model of debt-fueled consumption on its head. What America needs today is a new economic strategy that stimulates production rather than consumption, saving rather than borrowing, and exports rather than imports. Instead of more fiscal stimulus, this strategy emphasizes investment in the nation's physical, human and knowledge capital -- infrastructure, workforce skills, and science and technology. Instead of pursuing the Holy Grail of low consumer prices, it would give priority to enlarging the nation's productive capacity, including manufacturing, which is so important in creating middle-class jobs.
The shift from a consumer-oriented to a producer-centered society won't happen without a new partnership between labor and business. In "Labor and the Producer Society," I offer examples of strategic collaborations between U.S. labor unions and companies that PPI has labeled "Investment Heroes" because they are committed to investing in America.
This commentary on making America once again a "producer society" is part of PPI's effort to shape the terms of the economic debate as we head into the 2012 election cycle. We are breaking new ground here, and I would welcome your reactions and suggestions.