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America Has No Means to Recover from a DepressionPublished 12/06/08 Dustin Ensinger - Print ArticleE-mail - editor@economyincisis.org Speaking in front of members of Congress on Tuesday, economist Peter Morici, a professor at the University of Maryland, said the job loss experienced in November "was much worse than was expected ... The threat of a widespread depression is now real and present." Many economic observers have justifiably stated that the U.S. is in the midst of the greatest recession facing the nation since the Great Depression. On Monday, the National Bureau of Economic Research finally acknowledged what most of Americans have known for some time: that the U.S. is officially in a deep and painful recession. Few, if any, however, will dare to call the current downturn a Depression. Actually, the department responsible for categorizing our economic condition, NEBR, refuses to use the term, although most Americans, judging by what they see and what is happening to them, realize we are truly entering a depression. "Just as the NBER does not define the term depression or identify depressions, there is no formal NBER definition or dating of the Great Depression," the bureau's website says. It seems that some “experts” are finally starting to recognize the perilous situation that this country faces. Chrysler vice chairman, Jim Press, told reporters after testifying on Capitol Hill that inaction to save the auto industry could trigger a full-blown Depression. "We're on the brink with the U.S. auto manufacturing industry," Press said. "If we have a catastrophic failure of one of these car companies, in this tender environment for the economy, it's a huge blow. It could trigger a [worse] depression." Nobel-Prize winning economist Paul Krugman believes that, while the U.S. may not technically be in a Depression, we have entered a state of “depression economics.” Unfortunately, during the Great Depression we had the capacity to innovate, manufacture and otherwise create wealth that could drag us out of the hole we were in. Today, we no longer have that capability. We have forfeited that ability through disastrous trade policies that have shipped the majority of America’s manufacturing prowess across the border and overseas. Without the capability to manufacture and create wealth, the U.S. will never truly recover. Today we are maintaining our living standards only with imports & through the good graces of our creditors who loan us money. How can our creditors have faith in our credit worthiness when we can only pay them if we can borrow money from someone else to pay them. Front Page Photo - Don Iannone - Flickr © Some rights reserved Click here to contact your Representative in Congress. 
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The article says: “Unfortunately, during the Great Depression we had the capacity to innovate, manufacture and otherwise create wealth that could drag us out of the hole we were in. Today, we no longer have that capability.”
But that is not quite true. Here is why. After the great depression, we embarked on a manufacturing automation the likes of which the world has never seen. We were the inventors of advanced automation. During 50s and 60s, we optimized assembly lines and used pneumatic controls to run heavy industries. Towards late 70s, we used electronic controllers and in 80s, we used computer controls – all the while staying about 10 years ahead of everyone else. In 90s, we embarked on Business Automation and did pretty well. The next technology should have arrived in 1997 to maintain our usual 10 year lead. Unfortunately there was no visionary leader to take us there and we lost 10 years and 40 Trillion Dollars in productivity. That is definitely hard to catch up.
However, the good news is that our competitors are still using the 80s and 90s technology and there is no sign that they have invented the next steps, which is the silo-breaker technology. In the meantime, because we are behind technology, we sold our trade policy and created massive front companies who buy products from overseas in the name of productivity. Of course everyone knows - you outsource good paying jobs, which creates unemployment and underemployment that begets foreclosures that begets economic crisis.
There is still time to change that by starting with adjustments in trade policy, unemployment issues, and home foreclosure. That is just band-aids. But the real growth is the next level Automation Technology that can produce products cheaper than what the Chinese and Koreans can make and yet provide high wages. We still have low energy cost (Nuclear, Hydro and soon to be Wind, Solar etc.) and hence our products can be cheaper. The Nobel prized Economic Advisors to the President would not know this because they simply did not study Automation Engineering of which Human Brain is a part that nature made.
I call this Silo-breaker technology for the lack of a better word and it is based on Artificial Intelligence Framework. Even the Air Force is heading that way, but not there yet. I have devoted a lifetime in this technology. It is like moving from Simian Society to Human Civilization. Think about that for a moment. If you are interested and ready to implement such ideas send me an email at rjena at kmci dot net.