The Recession Is Over

[Commentary] We need a new type of recovery because the last several ones were based on bubbles. The Obama administration's strategy rests on what some might call industrial policy or excessive government intervention—or even creeping socialism. I call it "the smart economy." It means eschewing the blunt economic instruments we've always used and focusing resources and rhetoric on strategic sectors: renewable energy/green technology, infrastructure, broadband, and health care. It means making investments to run vital systems more intelligently and efficiently, thus creating a new infrastructure on which the private sector can work its magic. This philosophy, legislated in the $787 billion American Recovery and Reinvestment Act, holds that a mixture of targeted investments, tax credits, subsidies, reforms, and direct purchases can preserve or create jobs in the short term, improve America's economic competitiveness in the long term, and catalyze private-sector investment. The benefits from more investment in broadband and communications could extend far beyond elderly eBay sellers. As MIT researcher William Lehr says, "Broadband is a key ingredient to make the rest of this smorgasbord of projects work." For example, the stimulus package included $19 billion to computerize health information, which would allow doctors, patients, and insurers to share data easily. The move, intended to save billions of dollars, has already spurred private-sector investments. In July, the networking giant Cisco and the huge insurer UnitedHealth announced plans to build a technology network for health providers with the help of stimulus funds.