seem to be able to do this, in terms of learning French or Spanish or other languages. They are not just culturally prepared by our schools to do this kind of thing.

Q: With the rise of the virtual state, where do you see local and state government fitting in? For example, we are starting to recognize that the global economy is actually made up of region economies with strong global cities at their core.

A: Obviously, the region argument is correct. There is now a power house developing on the Mexican border that is both Mexican and American, and a lot of Latin American workers are gravitating there. You have many examples of regional economies in east Asia. I think in terms of our state governments, we have done a lot to try to bring in outside capital and outside production. And I think we are going to have to continue to do more, because inevitably we are going to lose even more of our production base than we have up to now. And if we are going to make up for it for the current generation of workers, the only way we can do that is to give incentives for other countries to produce in our market. And of course, with exchange rate changes, there may very well be good reasons for them to do this because they may have difficulty selling abroad to the United States over very highly valued Japanese and German currencies. But entirely aside from that, on a state basis, I think the thing you really want from state government is a much, much better educational system than we have right now. The short term answer is to get BMW to produce in the South or Mercedes or whoever it might be. But in the longer term, it is educational response that is the crucial one. It is human capital that is the most important capital for the future.

January Table of Contents

Blake Harris  |  Editor