Today’s must-read commentary on the U.S. economy comes from Steven Pearlstein at the Washington Post who details the labor market’s structural problems and presents what, realistically, is the only real long-term solution – make more or the stuff that we buy.

Right now, the United States is running a trade deficit that is likely to reach $450 billion this year. That’s down considerably from the $750 billion at the height of the economic bubble, but still more than a wealthy advanced economy should have. Bringing it down – either by producing more of what we consume (fewer imports) or more of what other countries consume (more exports) – represents the path toward sustainable, long-term job creation.
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As Daniel Gros, director of the Centre for European Policy Studies, wrote this month for Project Syndicate, a wonderful new economics Web site: “It is relatively easy to manage a structural shift out of manufacturing during a real-estate boom, but it is much more difficult to re-establish a competitive manufacturing sector once it has been lost.”

A structural shift toward exports and import substitution,” Gros warns, “will be difficult and time consuming.” He might have added that it will also be expensive, requiring sustained investment by government and industry, and internationally disruptive, requiring a much tougher line with trading partners that consistently tilt the playing field in their favor.

In this election season, the politicians who are really serious about creating jobs and bringing down unemployment won’t be the ones screaming about tax cuts, or stimulus or some imagined government takeover of the economy. They’ll be the ones talking about how to make the American economy competitive again.

Of course, in our global economy, more jobs from more balanced trade also means more lower paying jobs as U.S. workers will always be competing against those toiling away in Asia’s emerging economies. That will be the hard part – convincing millions of Americans that a lower standard of living is inevitable (and, actually, already underway).