For the past decade or so we’ve chosen to have an economy driven by financial alchemy and debt. Our government gave in to the wishes of the financial services industry and essentially let them write their own regulatory laws. The effects of which we are living with today. Now that we seemed to have, for now, contained the enormous damage of the financial implosion of 08, we must turn to what’s next. I’ve made no secret of my appreciation for former Fed chief, Paul Volcker. Today he wrote an excellent piece explaining, very simply, financial reform. At the cost of 5 minutes of careful reading, you will get an incredibly strong grasp of what needs to get done and why. Highly recommended. The financial crisis is far too important of an event for us to leave this to the “experts” to understand and solve. We all need to be aware and engaged.

The flip side of this is the question of what we want the next few decades of our economy to look like. It can continue to be driven, falsely, by debt, inflated statistics, and other tricks. Or we can work on producing things the world wants again. This article shows that, ominously, China looks like it’s in a really strong position in the clean energy race. Millions of jobs are at stake from the total of next-generation energy jobs. As we’ve seen from other manufacturing sectors, clusters develop and it can be winner take all. We need to invest heavily in R&D -and- manufacturing incentives to ensure that we can incubate these industries fully here and we give them a chance to compete.

Two types of economies here. We’re at at a pivotal time where we can ensure that our financial services sector does the things it’s supposed to without blowing up the real economy and also invest so we have an economy that produces real things of value for us and the world. I think our way forward is pretty clear…

Sadly, many of the most important things that we could do to benefit our long-term interests are also the things that are the least popular (or boring) in the present. An example is the news that the Department of Energy has invested $85M in promising young scientists in the area of clean energy. This is the kind of foundational, game-changing research that we need for the next generation of technologies to be created here. I think this is a great move which compares favorably to our nation’s proud tradition of investing in the future. Great, boring, news.

The watchout here is that we need to be prepared to put the right manufacturing policies in place to ensure that these technologies can be built here, creating American jobs, rather than almost immediately going offshore. If we don’t get these policies in place we will be minimizing the return on our taxpayer investment and giving much of the benefit to foreign countries. I have my fingers crossed and am prepared to fight that fight.