Every four years, Americans take a heavy dose of downers. A presidential election campaign always features at least one candidate whose message is that the other guys have screwed things up, almost beyond repair. Sometimes, as with this year, both candidates repeat the message that the U.S. economy is a mess. They differ only about where to place the blame.

But the causes they cite this year are shortsighted. Booms and busts are cyclical events, in housing or in banking or both. Though it was brought down by excess and wallowed in misery, the U.S. economy will rise again on the permanent values of entrepreneurship and investment.

It will rise even more if new Americans can use those values to enrich themselves, to make themselves more valuable.

Hidden Assets

Almost never mentioned as a long-term source of American economic weakness is a sector that is always considered one of our greatest strengths. Higher-education institutions, especially research universities, are not putting as much new muscle into the economy as they should.

"We earn what we learn," as President Bill Clinton used to say when he wasn't trying to kid us about middle-class jobs in factories and the automatic rewards that should come to those who "work hard and play by the rules."

Rewards do come -- though not automatically -- to people who acquire useful skills. But the Clinton truism hasn't led universities and the government to the right conclusions.

America turns its back on some of its best and brightest students. They come from all over the world, about 300,000 new ones each year. They or their governments often are paying enough tuition to subsidize expenses for students who are American citizens; they often are working harder than Americans in the most difficult subjects, such as math, physics, biology, chemistry, and engineering.

Then, after they have acquired prestigious degrees, after they have soaked up American culture, after they have made friends and future business contacts, America sends most of them home without a second thought. They will earn back in India, China, Korea, Taiwan, and other new entrepreneurial economies based on what they learned in the U.S.

As important as the foreign students are the foreign workers, wherever they were educated, who obtain special visas to work in the U.S. because they have important skills. About 65,000 such visas are granted each year. There are ways to game the system, of course, but this special H1B visa comes with a round-trip ticket. Most holders will be sent home again after six years' experience with the American business culture.

The technical term for this kind of policy is "stupid."

Robert E. Litan and Carl J. Schramm, who until recently worked at the Ewing Marion Kauffman Foundation promoting entrepreneurship, have an idea that could turn a dumb policy into a smart one. They write in their new book Better Capitalism, "If America wants more innovation and entrepreneurship, one obvious way to do that would be not only to accept more skilled immigrants into the country, but to do all that we can to recruit them."

New Business

Entrepreneurship is a slippery concept, hard to teach and hard to learn. It seems that some people are born with unquenchable desire to be their own bosses and some are born to reinvent the world. Others, equally well qualified, do good work for a salary in a job that once upon a time was created by a person of the first or second type.

Litan notes that sometimes people of the third type, the salary earners, find themselves with no other option than to become entrepreneurs. A university closes a laboratory, a corporation declines to fund a line of research, or a creative type can't stand working for a bean counter. In such circumstances, entrepreneurs are made, not born.

He and Schramm propose to make more American entrepreneurs out of foreign visitors. It's often said, on this page and elsewhere, that the U.S. government should staple a permanent work permit to every foreign student's diploma, or at least to those who earn advanced degrees in science, engineering, and math. But Litan and Schramm believe that starting science-related businesses could be the key requirement to stimulate economic renewal.

So, these gurus say, give foreign students and foreign workers a temporary visa, but make it permanent only after they have started a business and hired several nonrelatives to work in it. If it survives two years, they can stay for good.

Their idea should be embedded in Startup Act 2.0, a bill to ease immigration restrictions on scientists and science workers that has attracted bipartisan sponsors in Congress.

Political Blockade

Immigration has become the new third rail of American politics. In a time of high unemployment, workers and those out of work are easily convinced that foreigners threaten to take their jobs. The Litan-Schramm plan to smooth the way for foreigners to start businesses has a political advantage: Jobs would be created where no job existed before.

The candidates who say it's all about jobs are wrong on the economics. It's really all about output, productivity, and national wealth. But the panderers are right about the politics. Litan says the Startup Act ought to be renamed the Job Creators Act, just to get it past congressional gatekeepers and their fearful constituents.

There is no decent reason why this good idea should be restricted to technology businesses. Starting a carpet-cleaning company or a lawn-care company or a restaurant also adds to the American economy, even though such businesses almost never become the high-growth companies that are the leading creators of new jobs.

It does make sense to focus on the high-tech industries that have created so many jobs, directly and indirectly, but not to the exclusion of services that support them. How much progress would Silicon Valley programmers make without the pizza deliverers who bring sustenance to nourish their all-nighters? Both are needed to make the U.S. economy thrive. 

Editorial page editor Thomas G. Donlan receives e-mail at td.donlan@barrons.com.