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An Economic Primer: Why Americans Won't Invest in Themselves

One is that something has frightened Americans out of risk assets, such that the only thing we have to fear is fear itself, and maybe also Barack Obama and his legion of fiscal inquisitors.

The other is that we're just not good enough: we're lazy, under-educated, spoiled, petulant, unable to compete with the lean and hungry Asians.

If the second explanation is correct, it means we've already turned into Greece or Spain. I don't believe that for a moment. We lag in a number of areas, but America still has the best technology, highest productivity, and by far the best research universities in the world. And we have plenty of people willing to work, and work hard.

The other explanation is that something is preventing us from investing in ourselves. Why won't we use our $20 trillion in retirement savings to build factories and stores and offices and generating stations and oil rigs and mines?

Let me count the ways.

We have the highest corporate tax rate in the world.

We have an administration that sandbagged one of the biggest contributions to energy independence to become available in decades, namely the Keystone project.

We have a regulatory environment that makes it next to impossible to build a nuclear power plant.

We have a health care program that puts the biggest weight of a new entitlement program right on the economy's weak spot -- firms with fifty workers.

We have an administration that can't get its act together to steer the economy away from a fiscal cliff.

We have an out-of-control budget deficit as far as the spreadsheet can extend to the out-years, which means much higher taxes in the future.

Mitt Romney needs to persuade Americans that he can bring us together, to give us the confidence to take risks on ourselves and our neighbors. Obama appeals to resentment against the 1%. But the solution lies not with the 1%, but with the 99%, who have to trust each other. The politics of resentment spread fear and distrust and cause economic paralysis. Barack Obama has turned us into our own worst enemies.

Romney might also tell the government-union base of the Democratic Party that their pensions and retirement health care will go down the drain as long as economic growth languishes around 1.5%, because there won't be enough income to pay for them.

Does anyone actually think that the outcome of the election depends on whether voters think Obama or Romney will be tougher on China?