Rebuilding the Broken American Economy One City at a Time

Abstract

Our interest in writing this article is to create a bridge between the scholarly and academic research on technological innovation and a private sector, for-profit business model that implements the ideas on innovation and entrepreneurship, primarily in metro regional economies.

Dr. Nadeem Naqvi, a professor of economics at the American University in Bulgaria, calls the current economic crisis in America "the great deprivation," to contrast this period with the great depression. (The Great Deprivation of Early 21st Century, November 2008).

Ostensibly, the current economic crisis deprives citizens of obtaining economic benefits in the new bifurcated global economy, which Naqvi links to bad political decisions in American trade policy.President Obama's use of Keynesian policy of stimulus may not work to plug citizens back into the global economic stream of benefits, notes Naqvi, because most of the government "trickle down" stimulus will probably "leak out" of the bifurcated U. S. economy.

The Keynesian stimulus may provide some temporary economic relief through work programs on bridges, roads, and other physical infrastructure. But, once those programs end, there will be no long term lasting economic benefits.In other words, whatever trickles down will probably leak out.

The alternative economic model for dealing with the great deprivation caused by the U. S. trade policies is to rebuild the American economy by reconnecting linkages in regional inter-industrial supply chains. Those regional intermediate demand chains performed three valuable economic functions. They served as the platform for innovation, and they distributed income and employment through the regional multiplier effects. And, they opened up the door to great American dream of upward occupational mobility.

The most important infrastructure to rebuild is the American technology innovation platform of small manufacturing firms. And that means rebuilding the American economy, one city at a time.

Keywords: Keynesian stimulus, bifurcated global market, innovation networks, radical innovation

JEL Classification: L16, M13, O16, O31, O32, O33, O34, O38, R58