Paul Samuelson (1915-2009).

When I was in college, the leading textbook used for Economics 101 was written by Paul A. Samuelson. The MIT professor's book championed Neo-Keynesian economics and became the best-selling introductory economics textbook of all time. The author's other achievements included winning the Nobel Prize in Economics (first American to do so), serving as an advisor to US presidents JFK and LBJ, and teaching students who went on to win Nobel prizes themselves, such as Paul Krugman and Joseph Stiglitz.

One of Samuelson's comments always stuck in my mind. He said anyone who believed that the low wages paid to an Indian worker had no relevance to the earnings of an American worker believed in the tooth fairy. He made this comment years ago, at a time when things were booming in the United States and outsourcing wasn't as serious a concern as it is today. I never imagined the impact his far-seeing remark would have on contemporary American life.

What he said lies at the heart of America's economic problems today. Unfortunately, the wage differential between workers in the developed world and those in emerging powers, like China and India, is so large that advanced Western nations are reeling from the consequences. In our current election debate, it must be admitted that neither party has a solution to this problem. Romney correctly points to the continuing millions of unemployed American workers. In response, Obama says that Romney has failed to reveal his "special sauce" to cure the problem. On other occasions, the president has labelled his opponent's proposals to reduce unemployment and restore economic vitality "Republican snake oil". Being a Democrat, I find Obama's phrasing funny. Nevertheless, the sad truth is neither man has a solution to offer. I've seen the results of this problem myself for years in upstate New York, once an industrial powerhouse for the entire world and now mostly a rusting shambles.

Here are a couple of other trenchant comments by the master economist:
-- "If we made an income pyramid out of a child's blocks, with each layer portraying $1000 of income, the peak would be far higher than the Eiffel Tower, but almost all of us would be within a yard of the ground."
-- "The problem is no longer that with every pair of hands that comes into the world there comes a hungry stomach. Rather it is that attached to those hands are sharp elbows."