The Comeback Read Free

trade association—that losing television service for a few days is of minor importance compared to the fact that millions of Americans would lose their homes because they did not understand the mortgage documents they had signed.
    In retrospect, I should have shouted louder. After all, what is more important to the innovation industry than the overall health of the U.S. economy? Or, more crassly, we sell fewer new products and services to nations with struggling economies. And years later, our economy is still struggling from the impact of the sub-prime crisis. In retrospect, what issue was more important than the harsh impact of sub-prime mortgages on the U.S. economy?
    I still keep wondering why I have heard not one person in any position of responsibility actually take responsibility. How is it that we faced an easily foreseeable crisis and no one is responsible? What about the executives who headed the mortgage lenders like Countrywide and Washington Mutual? Other than some minor civil fines, they are living nicely thanks to their ill-gotten gains. What about the political leaders who rejected Bush Administration pleas to reform the promiscuous lending entities? Some are still ensconced in Congress and congratulating themselves for passing the 2010 financial “reform” legislation.
    What about the Clinton and Bush Administration regulators who did not do their jobs and review these schemes for fraud and ascertain that mortgage applications were being checked and verified? What of the consumer groups advocating for housing ownership by the poor and greater equality of income? They are still encouraging laws that put lower-class Americans in a precarious financial position.
    What of the bond-rating agencies who packaged the sub-prime mortgages and rated them safe? Author Michael Lewis in
The Big Short
describes how these agencies relied on borrower credit scores and cleverly included lending to recent immigrants (with no bad credit history and thus high scores) to give high average scores and thus high ratings to sub-prime notes. Yet these agencies and their executives continue to prosper.
    What of the investigative journalists who missed this obvious story?
    Housing mortgages don’t have much to do with innovation. But the story from beginning to end, when it ends, revealed that our government is wildly ill-suited to manage our economy. Our government’s response to the sub-prime mortgage disaster underscores a blinding incompetence that is hard to fathom. The response was but the latest in a multitude of foolish mistakes that have crippled America’s number one brand: innovation. That Chinese Communist was correct. And unless we accept that, we will never return to our once-unconquerable heights.
    My dream is to return to China in ten years and meet with him again. Behind me, I want a strong U.S. economy, building markets and expanding humanity’s technological progress. I want him to envy America, rather than look down his nose at us. I want to return to that Chinese man and extend my thumb, pointing upward.

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America’s Decline
A TALE OF TWO CITIES
    Almost every week, I experience a tale of two cities as I travel from Washington, D.C., to Detroit to see my wife and toddler son. For Washington, it is the best of times. Today’s U.S. Department of Labor numbers show that the Washington area’s 6.4 percent unemployment is the lowest of any large area in the nation. Washington area home prices are up 9 percent. 1
    The Washington economy is supercharged by the inflow of new federal government spending and the legal and lobbying business generated by the government proposing and issuing new federal laws and regulations. Even the quiet missions of Washington trade associations are growing as the government rushes to legislate and regulate. Americans outside Washington are paying ever more to Washington-based experts to explain massive 2,000-page bills as well as multitudes of proposed rules.
    More than 10,000