This is true across the economy, but a helpful example is the clothing, or apparel, industry. Since the fourth quarter of 2007, clothing purchases by consumers have increased by about 5% in real terms, according to the latest figures from the Bureau of Economic Analysis. Over roughly the same period, shipments from U.S. apparel factories fell by 31% in real terms, while apparel jobs fell by 26%. The winner: Factories in China and elsewhere making clothes for the U.S. market.

It's not just clothes, of course. In many stores, it's getting harder and harder to even find products that say "Made in the U.S.A." That's one reason why much of the economic stimulus escaped out the back door in the form of imports.

Now, this doesn't mean imports are evil. When we buy goods from overseas, we generate some jobs in retail and wholesale. If you buy a shirt for cheaper than it would otherwise be if we made it here, you have more money left over to buy other things, like health care.

But the big problem with consumer spending is that if you buy a product made outside the U.S., it doesn't encourage domestic investment. And that's what we really need. In the past, a dollar spent on a shirt would start a virtuous circle, as the clothing factory expanded, adding more workers and buying new sewing machines. That investment in new machines, in turn, would create more business for the sewing machine company, who would then hire more workers who would need new shirts.

Today, the cycle is happening overseas. We have a genuine investment shortfall in the U.S., where both business and government are way below historical norms for spending on equipment, buildings, software, and infrastructure.

Consider this: Personal consumption in real terms is 11% below its long-term trend, based on the 1997-2007 period. That sounds bad enough. But nondefense government investment is 17% below its long term trend, as state and local governments cut back. And counting all private sector enterprises, nonnresidential investment is a stunning 25% below its long-term trend.

These figures are devastating for our economic future, both short and long-term. Low investment means fewer jobs and weaker productivity growth. The longer the investment shortfall lasts, the more damage it does. However, we're not going to close the shortfall by encouraging debt-financed consumer spending. Instead, we need to redirect resources to productive investment.

Here's a couple of examples of what we can do. First, I like to see the Obama administration publicly identify and applaud "investment heroes": the top companies who are investing domestically in either physical capital or knowledge capital (R&D, design, and other forms of intellectual investment). The bully pulpit of the president can be a wonderful tool, if it directed toward the right cause, and this would send a signal of the importance of investment.