Just before the election, Michael Porter, the Harvard Business School expert of competitiveness, wrote an article for Business Week entitled Why America Needs an Economic Strategy. Although this would seem to be obvious, Porter points out that for 30 years we have not had such a strategy.

America's political system, especially as it has evolved in recent times, almost guarantees an absence of strategic thinking at the federal level. Government leaders react to current events piecemeal, rather than developing a strategy that unfolds over years.

He then goes on to point out seven key strategies we need to pursue for the long term. I wanted to focus on two of them that relate directly to my belief in the idea of a New Federalism--that innovation must be sourced at the edges--with fiscal stimulus money flowing to the states.

U.S. colleges and universities are precious assets, but we have no serious plan to improve access to them by our citizens. America now ranks 12th in tertiary (college or higher) educational attainment for 25- to 34-year-olds. We have made no progress in this vital area over the past 30 years, unlike almost every other country. This is an ominous trend in an economy that must have the skills to justify its high wages. Instead of mounting a serious program to provide access to higher education, like the G.I. Bill and National Science Foundation programs of earlier years, Congress grandstands over the rate of endowment spending in our best universities.

The federal government has also failed to recognize and support the decentralization and regional specialization that drive our economy. Washington still acts as if the federal level is where the action is. Beltway bureaucrats spend many billions of dollars on top-down, highly fragmented federal economic development programs. Yet these programs are not designed to support regional clusters, nor do they send money where it will have the greatest impact in each region. For example, distressed urban communities, where poverty in America is concentrated, are starved of the infrastructure spending needed for job development. Again, no strategic thinking.

The Obama Administration, having built their campaign on the networked, bottom-up model, must embrace that same model for the Rebuilding America process. Supporting the states with block grants based on population would be the key to the process. Thus California with 12% of the country's population would receive block grants totalling $60 Billion in a $500 billion recovery package. That money could revive our fabled state college system, rebuild our failing k-12 schools, help support solar and wind investments and repair our aging infrastructure while supporting new projects like the high speed rail system.

All of this would put our citizens back to work. With unemployment headed to 8% in our state, and with many good infrastructure projects put on hold because the budget crisis there is not a moment to waste.