NEW YORK (TheStreet) -- Inequality is replacing the American dream, because the U.S. economy -- thanks to Washington's mismanagement -- is underperforming.
America still produces one-fifth of the world's goods and services, but accounts for a much smaller share of global growth. Many U.S. products are no longer the best in class. Consequently, the economy can't adequately employ many of its college graduates, and wages are stagnant or falling for ordinary folks.
America still has great strengths. High labor productivity, coupled with rising wages in Asia, makes American workers a good value for global investors. Along with cheaper energy, thanks to the onshore oil boom, that should attract new factories, but the promised flood of new jobs has been only a trickle.
Simply, the bureaucratic quagmire created by complex and ineffective business regulations makes it easier to produce in Asia than in America. The steep corporate tax rates make the cost of investing here too high.It is increasingly difficult to refine and efficiently move oil to California and the Northeast -- gasoline costs too much in Monterrey, Calif., and heating oil in Massachusetts. Whether businesses are taxed or directly pay for health care, higher costs than in Europe or Japan require radical reforms in delivery and pricing that Obamacare won't accomplish and Republicans refuse to discuss. Germany punches above its weight. Whether in aerospace or web-based businesses, its companies compete effectively for customers in rapidly growing developing country markets by emphasizing proven technologies, execution and patience. Cities from Bangkok to Lagos are too congested and cluttered with street vendors to support American middle-class drive to the mall retailing. German firms like Rocket Internet are recruiting suppliers and sending young women with tablets into marketplaces and workplaces to demonstrate their Web sites.