David Brooks’s op ed in today’s NYT with some wise thoughts, esp. this one:

But there are several things the government can do to improve the economic ecology. If you begin with that framework, you can quickly come up with a bipartisan innovation agenda.

First, push hard to fulfill the Obama administration’s education reforms. Those reforms, embraced by Republicans and Democrats, encourage charter school innovation, improve teacher quality, support community colleges and simplify finances for college students and war veterans. That’s the surest way to improve human capital.

----------------------

December 8, 2009

Op-Ed Columnist

An Innovation Agenda

By DAVID BROOKS

The economy seems to be stabilizing, and this has prompted a shift in the public mood. Raw fear has given way to anxiety that the recovery will be feeble and drab. Companies are hoarding cash. Banks aren’t lending to small businesses. Private research spending is drifting downward.

People are asking anxious questions about America’s future. Will it take years before the animal spirits revive? Can the economy rebalance so that it relies less on consumption and debt and more on innovation and export? Have we entered a period of relative decline?

The first thing to say is, let’s not get carried away with the malaise. The U.S. remains the world’s most competitive economy, the leader in information technology, biotechnology and nearly every cutting-edge sector.

The American model remains an impressive growth engine, even allowing for the debt-fueled bubble. The U.S. economy grew by 63 percent between 1991 and 2009, compared with 35 percent for France, 22 percent for Germany and 16 percent for Japan over the same period. In 1975, the U.S. accounted for 26.3 percent of world G.D.P. Today, after the rise of the Asian tigers, the U.S. actually accounts for a slightly higher share of world output: 26.7 percent.

The U.S. has its problems, but Americans would be crazy to trade their problems with those of any other large nation.

Moreover, there’s a straightforward way to revive innovation. In an unfairly neglected white paper on the subject, President Obama’s National Economic Council argued that the U.S. should not be in the industrial policy business. Governments that try to pick winners “too often end up wasting resources and stifling rather than promoting innovation.”