China sent their best and brightest economists here to the United States to study our history to find out how we went from being a nation of agrarian importers who made nothing, to being the manufacturing center of the world. They then took that information back to China with them and implemented that same plan there -- the same plan that was abandoned starting with the Reagan administration here in America. To whit: 1) High tariffs and other barriers to import (in 1929 imports were roughly 5% of U.S. GDP, exports were roughly the same), 2) policies that emphasize building infrastructure (the New Deal, the Interstate Highway System, the Space Program, the REA, etc.), 3) policies that provide government subsidies and protections for critical industries (the protections of the steel industry that Reagan dismantled, protections for U.S. aircraft makers, etc.). And it *worked*. The U.S. went from a few million agriculturalists to 120 million industrialists within the course of a hundred years. And it was all because of massive government intervention in the economy -- intervention which the Libertarians conveniently write out of history, I might add.

Now, China being China, and run by a gerontocratic dictatorship, they also added a few very nasty and unpleasant things of their own to the mix -- the harsh working conditions, the outlawing of unions, and so forth. But the general skeleton of the way their economy is organized is almost exactly the same as the general skeleton of how the U.S. economy was organized during this country's period of greatest growth -- a skeleton which, I might add, has been completely dismantled over the past thirty years, especially over the past ten years, with predictable results.

The main points are entirely valid and I'm not sure what objection you have to Stern making those points. In a nutshell:

(Quoting former Intel CEO Andy Grove) "...a plan for job creation must be the number-one objective of state economic policy; and that the government must play a strategic role in setting the priorities and arraying the forces of organization necessary to achieve this goal."

The conservative-preferred, free-market fundamentalist, shareholder-only model—so successful in the 20th century—is being thrown onto the trash heap of history in the 21st century. In an era when countries need to become economic teams, Team USA's results—a jobless decade, 30 years of flat median wages, a trade deficit, a shrinking middle class and phenomenal gains in wealth but only for the top 1%—are pathetic.

Actually I read Stern's piece. It reads like he was plagiarizing Thom Friedman. It is so important when reading an article by a neoliberal to realize that any of us will agree with bits and pieces of it. But it is poison to accept the whole proposition. So yes, job creation is super important as is having a national industrial policy. But the rest of Stern's spiel is blather.

First, let us remember who Andy Stern is. He was a member of the first Simpson-Bowles Cat Food Commission and favored cutting Medicare and Social Security. And of course he has been a big supporter of the Bush-esque Obama. These should be enormous red flags to take anything he has to say with extreme skepticism.

And he goes off the rails almost at once invoking free markets. There has never been such a creature. Nevertheless, his use of them is illustrative because it shows just how bad and incomplete his analysis is. Both China and the US are kleptocracies. Stern focuses on China's pluses and conveniently overlooks its negatives. As in this country, there is massive wealth inequality in China. Stern says how many Chinese have entered the middle class but what he doesn't say is that China's domestic consumption rate continues to decline. He doesn't talk about China's serial bubbles in real estate, commodities, and capacity over building. He doesn't talk about its pollution, abuse of labor, and poor quality control. He doesn't talk about how most Chinese economic statistics are simply lies. So what does it mean that he extols Chinese 5 year plans? If the current data can't be trusted, how can the 5 year material? Indeed we should all be inoculated against this kind of propagandistic drivel from our own experience with multi-year economic projections in this country. We have much better data collection and the projections based on them are still garbage.

Stern is basically selling the line that we must out-China China. That we must meet their mercantilist trade policy with a better mercantilist plan of our own. Explicit in this is his embrace of globalization. Remember he calls this the Global Revolution. Well that's what globalization is.

But this approach of Stern misunderstands (deliberately) everything. He wants a public-private partnership. Early in the 20th century, this state corporatism was called fascism. More than this, Stern simply ignores that government and corporations have been cooperating massively for the last 35 years, and far from producing the nirvana he proclaims this coordination has resulted in the gutting of the middle class and the economic devastation and political corruption we see all around us.

Like a Friedman piece, Stern's makes a superficial kind of sense until you start thinking about it, and then it all falls apart. China has been able to pursue its mercantilist approach up to now because it has us has a huge consumer market. But if we seek to outcompete China on the world stage, who are we going to sell to? Who are going to be our big fat consumer market? If it is ultimately ourselves, then this goes directly against the globalization Stern is promoting. You see this is the problem with the whole beggar thy neighbor mercantilist line. It only works if one or a few countries practise it. If everyone does, it can't possibly work. Yet this is China's policy, and it is the one the Europeans are pushing (however crazily), and now we are supposed to embrace it too? Where are all of the necessary consumers going to come from?

And as long as we are on this subject, Stern never says how Team America is actually going to increase either wages or jobs. It is just supposed to happen, sort of like trickle down economics, as an effect of the policy. But much as with trickle down and, as I said above, we have had 35 years experience with public-private partnering and we have seen what it has done to both jobs and wages.

Long story short, if you don't trust Friedman, don't trust Stern because either way it is the same neoliberal crap.