Breakdowns Create Opportunity for America

Right now, we have a great opportunity. The American economy, and small business in particular, have been hit hard lately, and are really struggling. But we have a chance right now to do great things—we just have to think big.

When you read the headlines each day, it seems like the whole world is falling apart. The European Union is being pushed to the brink thanks to the debt crisis on the continent. Entire countries are at risk of going bankrupt, and many are preparing for the possible breakup of the Eurozone. In Russia, people are standing up for the first time and seriously protesting against the political regime led by Vladimir Putin. The Middle East has been in turmoil all year, from Egypt to Libya to Syria.

In recent years, many intellectuals have looked to China as the inevitable lead power in both the long-term and even the short-term, as it has seen incredible economic growth numbers in recent years. But as Paul Krugman wrote in the New York Times yesterday, China is at serious risk of popping a credit bubble, much like Japan did 20 years ago and the West did in 2008.

For years, American companies have fled our shores because of high labor costs—and they’ve frequently turned to cheap labor in China. But now wages are rapidly rising in China, and experts expect wages there to increase 80 percent in just the next 5 years. Suddenly outsourcing doesn’t look like the easy way for businesses to balance their books (by destroying American jobs, of course).

All this adds up to a great opportunity for America. Economic growth requires innovation and creativity, and I believe that we can regain the lead if we take the right steps.

Where is the big innovation going to come from? It doesn’t look like it’s going to come from the bankrupt European welfare states. They’re caught up in a defensive position desperately trying to tread water—they’re not even thinking about growth. People are taking money out of European banks.

And eastern powers like China have problems of their own, as Krugman outlines at the link above. China is riddled with corruption and an unregulated shadow banking system that threatens to drag the entire country down. What’s more, more than half of the millionaires in China—the most successful people in the country—are making plans to leave the country. There’s nothing inevitable about China surpassing us.

You win with talent, and we have an opportunity to become a catalyst for the world, a place for the most exceptional people. We can learn from our own experiences and what we’re seeing around the globe.

Legal immigration reform can help us take advantage of the flight of Chinese entrepreneurs, and allowing us to hold on to the brilliant foreign engineers who are already educated here in the United States. Spending reform can help us to avoid the pitfalls that have bankrupted European states. Tax reform can help us make the tax code more level—lower rates, but fewer loopholes enabling big businesses to avoid paying their fair share.

Best of all, all of these things are doable. Immigration reform has advocates on both sides of the aisle. Politicians on both sides of the aisle are at least aware of the need for spending and tax reforms, and we’ve even seen bipartisan efforts like the Bowles-Simpson Commission or the Gang of Six trying to come up with solutions.

America has some work to do, but there are great rewards ahead of us if we can get it done. It’s possible to bring jobs back from overseas. It’s possible to create new jobs by nurturing small business and encouraging entrepreneurs.

These are doable ideas, and it’s time for us to take advantage of the opportunity.