June  •  July 2005 • Vol. XXIII No. 5 • An Arnold Publication

From the Editor—

Warnings from the Fed. . .
 

On the bright side, he reported that U.S. GDP during the past 12 months, though somewhat erratic, grew at a respectable rate of 3.7%, and that he felt the growth would continue for the foreseeable future. He also noted that unemployment had dropped to 5.1%. And, as I’ve said before in this column, that also is far
better than any other major industrialized nation.

On the darker side, Greenspan warned again in his prepared remarks of the impending retirement of the baby boomer generation, which over a twenty year period will double the number of retirees. And, though he didn’t mention the problem in his written statement, in response to questions, he again warned of the shortfall of new workers available to pay for all the promises made over the years by vote-seeking politicians. He indicated that this is a looming problem that will be corrected by the
markets in ways the congress won’t like, if they don’t get off their rears [my words] and do something about it now.

“Isn’t the real solution to our problems to create new jobs for our workers?” one congressperson asked.

In response, Greenspan pointed out that there are jobs, but that we are not educating our young people in a way to to allow us to remain competitive with China, India and Japan. We’re not producing enough skilled people to fill those jobs.

Our students are at world-class levels up through the fourth grade, he noted, but after that, something happens. The educational system in the U. S. no longer knows how to teach the basic things needed to fill good, high-skilled jobs in the U. S.

If you’ve ever called tech support for a U. S. firm and found yourself talking to a pleasant voice in Calcutta, India, you know what he’s talking about.
In my view companies go to India and other places for help, not just because of cheaper hourly rates for educated people as is commonly believed, but simply because they can’t find enough qualified people in the U.S. to fill their needs.

In this editor’s view, we’d better start acting on Greenspan’s warnings about the future now. We’d better do something about the educational system now before it comes up and bites us where it hurts most. There’s still time, but we have to stop talking and act.

                                                                                                   C. H. Bush, editor