Feb
14
By Paolo von Schirach
February 14, 2012
WASHINGTON – General Electric is hosting a major event in Washington, DC, titled American Competitiveness: What Works. Given GE’s convening power, lots of interesting people from industry, government, the media and think tanks are attending and speaking. And mostly the panelists and speakers talk about the right things. America needs to regain its competitiveness. The federal Government should help by simplifying taxation and regulations, by providing more focused incentives for work force retraining and by having a more strategic approach to energy policies.
A panel with federal, state and local officials
One particular panel attracted my attention: Recharging American Manufacturing: City, State and Federal Perspectives. The participants included a US Senator, Rob Portman, Colorado Governor John Hickenlooper, and Louisville (Kentucky) Mayor Greg Fisher. There was also Jay Timmons, President & CEO of The National Association of Manufacturers, (NAM), who had prior policy experience in state government.
Passion about pro-growth strategies
There were two important aspects about this panel. The first one was the passion with which all the speakers discussed competitiveness issues and how they have (at different levels of government and public policy) embarked on new plans to promote investments, work force development, training programs, sensible taxation, cooperative agreements with universities and federal research labs and a lot more.
We heard about “Coin”, the Colorado Innovation Network, and about Bluegrass Manufacturing in Lexington. We heard everybody on the panel agree that the US has to diminish its costs of doing business because at the moment they are about 20% higher than the international competition. And there was agreement that the US has to exploit to the fullest the fantastic opportunity provided by the shale gas revolution, with consequent lowering of energy costs for many American industries.
Total agreement between Democrats and Republicans
But the second aspect is truly astonishing. Everybody really agreed with one another. No dissonance. No polemics. There were two Democrats, (The Governor and the Mayor), one Republican (the Senator) and a very pro-business NAM CEO. Although coming from different angles, given the different perspectives from city to state to federal to trade association, they agreed essentially on everything: the nature of the problem regarding lack of US competitiveness and what to do to regain the edge. In fact, not knowing the actual party affiliations, it could have been quite possible to assume that all speakers were sensible, middle of the road pro-growth Republicans, or all of them centrist to conservative pro-business Democrats.
Of course, this tangible evidence of a fundamental convergence on critical issues of growth and competitiveness between these elected Democrats and Republicans, should be saluted as good news. It should mean that there is ample common ground and that, on this basis, it should be quite possible to fashion a broad, truly bipartisan national economic strategy that will enable America to regain lost ground and move up.
Yet zero agreement at the national level
And yet at the level of American national politics this is absolutely not so. Washington is totally frozen. At the national level, Democrats and Republicans agree basically on nothing, except for indulging in the nasty habit of calling each other names. Back in December 2010, there was no deal on the rather sensible policy recommendations produced by the Bowles-Simpson “Debt Commission”. That Report, provided the same spirit of cooperation displayed at the GE Conference, should have become the starting point for serious action on real public spending and tax reform. But instead it got killed.
Later on, in 2011 zero agreement between the White House and the House Republicans on spending reductions. And then there was the more recent failure of the congressional “Super Committee” that should have decided on a combination of major spending cuts and tax increases. And now, on February 13 we had the unveiling of Obama’s last budget before the November elections, immediately dismissed by the Republicans as a political campaign document, pure posturing, and therefore not a serious public policy proposal.
The ideologues dominate policy positions in both parties
So why this disconnect? Unfortunately, the fact is that the two parties extreme wings have managed to take control of the debate in Washington. The Democratic left and the Republican right dominate and determine positions. And this intransigence guarantees gridlock. The Republicans who control the House have the votes to block any legislation, but they have no power to impose their will. Likewise, the Democrats controlling the White House and the Senate cannot pass anything without the concurrence of the House.
Beyond that, looking at the presidential campaign, the Republicans are flirting with the idea of nominating conservatives ideologues like Newt Gingrich and Rick Santorum who think that Obama is really a socialist bent on destroying the very moral fabric of America. Obama in turn is portraying himself as the new Robin Hood who wants to take from the rich to give to the deserving poor. If these silly and in a sense dangerous positions continue to dominate, zero hope of getting any agreement on anything.
Will the pragmatists regain control?
Yet, the fact that at least some Senators, Governors and Mayors of different parties can have a constructive dialogue, because they truly agree on the fundamentals, allows some hope. It means that there is some sanity left. At some point middle America, made out of pragmatists and problem solvers just like the public officials at the GE Washington Conference, should be able to prevail, force the end of these completely useless Washington ideological fights and finally produce the needed pro-growth environment.
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