Raise our skills or lower our wages
Bill Gross, the head of Pimco, the world’s largest bond fund, sums it up in no uncertain terms: “Our labor force is too expensive and poorly educated for today’s marketplace.” There are two variables here: our educational levels, which are low, and our wages, which are high. Either we will raise our educational level or markets will lower our wages.
Bill Gross also said to sell treasuries during one of the biggest bond run-ups ever. Bad call.
Just because somebody is rich doesn't mean that they are right.
Every generation gets to consume what they produce - no more and no less. Tom Friedman doesn't understand this. Nor does Bill Gross. The question is simply about dividing the spoils, and those decisions are based on politically-motivated economics, not education. We greatly benefit from the Chinese (and others) making junk for us in return for paper with pictures of dead presidents on it - that's what a trade deficit is. We're Tom Sawyer, and the Chinese are Tom's friends. We simply fail to understand what Tom did - that as long as "our friends" are willing to play this game we can benefit by working less. Do the Chinese have jobs because they are better educated? No. They have jobs because they have been tricked into working for little. We just don't realize that we're in the catbird seat.