Today's rant is a riff on the last commentary on the need to create new jobs. This week's Business Week focused on the fact that basic R & D in the U.S. is waning. The labs at Bell Labs, Xerox's PARC, and Hewlett-Packard's lab are just a few examples of very large labs that were extremely productive, but are now gone or sharply reduced. The basic research that came out such labs having been driving our economy for over fifty years. We really need to find some way to reignite our basic research engine.
Consider this fact; right now we need 6.7 million new jobs just to replace the ones lost forever in this recession, and another 10 million to keep up with population growth. In the 1990's, the U.S. economy created 2.2 million new jobs a year, but in 2007 it had fallen to 900,000 jobs. But there is more. There are roughly 130 million jobs in the U.S. Twenty percent (20%) pay $60,000 or more, while the other 80% pay an average of $33,000. One of the reasons for this discrepancy is that low paying jobs in fast food outlets cannot be out sourced, but research scientists can work any where.
We just spent $3 Billion on that ill-advised Cash for Clunkers program. That amount would have completely funded a basic research lab the size that Bell labs used to be. There is a huge need to fund and to encourage the creation of new labs, and the expansion of existing labs. We can do that in a lot of relatively inexpensive ways. For example, we could give companies a tax credit for the dollars they spend on basic research. Or we could fund new research labs run by universities and private organizations with one time grants. Or we could exclude the first X% of profits that Venture Capitalists realize on their investments in start up ventures, and maybe allow tax credits for up to X$ in losses on investments that do not pay out.
Now compare those expenditures with the $800 Billion we spent (?) to bail out Wall Street banks, and then compare the return on investment we are likely to see any time in the future.
There was a time, it seems to me, that Congress could see something beyond the next election, but apparently that now longer applies. And that is tragic because the future of the United States is much longer than the next election cycle.