Editor's Page -- The Enemy Is Within Our Shores

Dec. 21, 2004
Fighting within the U.S. is doing more damage to our manufacturing sector than overseas competition.

U.S. business executives like to complain about the U.S. government, deriding how long it takes to get things done, how much it spends, its glaring inefficiencies, and the complexity of its legislation and regulation. But the next time a group of executives gets on a roll sharing favorite stories about government ineptitude, I want one of you to speak up and ask the others: How many lobbyists do you employ and how much do you spend on lobbying each year? What narrow interest have you asked your lobbyists to bludgeon members of Congress and the Bush administration with recently? What amendment have you pushed to be attached to a (possibly unrelated) bill? Put more succinctly: How have you contributed to the problems that traditionally are attributed to much-maligned Washington insiders? I wondered this myself as I witnessed the start of retaliatory tariffs on exports last month, the result of a 15-month-and-counting impasse on repealing the FSC/ETI (Foreign Sales Corporation/Extra Territorial Income) export subsidy. Even as the deadline passed, and the initial tariffs were applied, the corporate feeding frenzy continued over who would get a share of the roughly $55 billion over 10 years that will be "freed up" when the tax provision is eliminated. Worse, every corporate group with a tax grievance even remotely associated with offshore raced out of their offices seeking redress for past evils. The result? What could have been simple legislation to replace a tax subsidy and avoid retaliatory tariffs was weighted down with so many special interest requests that it collapsed. Now some suggest we'll have to wait until after Memorial Day for Congress to take up the issue again. All our internal wrangling gained us nothing, but potentially could cost the already struggling U.S. manufacturing sector millions of dollars in sanctions and lost sales. Now, I'm not saying that the many proposals that business leaders tried to attach to this legislation are all nefarious. Some are probably excellent ideas that need to be implemented. Some were probably related somewhat, however tangentially, to fixing the problem the FSC/ETI reform legislation originally attempted to address. Still, I'm startled that business leaders can't see the harm they've caused in this and other instances -- most notably the energy bill -- where their heavy-handed lobbying has helped sink important legislation that had the potential to strengthen U.S. manufacturing. Indeed, why are we so willing to lobby in such a way that we kill legislation that would, even though it's not exactly what we wanted, help our own companies compete more effectively in the global economy? I don't have an answer to that question, but I'm concerned about its implications. If the U.S. manufacturing community -- and by that I especially mean the leaders of U.S.-based multinationals who wield power over the legislators via lobbyists and campaign contributions -- can't set aside self-dealing in the interest of building a strong U.S. manufacturing sector, we can't expect our government officials to do so either. So the result is: While leaders in other countries and regions are presenting their countries' agenda to the World Trade Organization -- and winning -- U.S. leaders are still fighting among themselves over which U.S. business sector will lose to another U.S. business sector if we press a specific case there; we're still debating whether to spend what amounts to a federal budget rounding error to buttress an obviously devastated small manufacturing community; and we're still scrabbling over scraps at the federal budget banquet table. In sum, while other countries' leaders have already turned their attention to winning on the world stage, U.S. leaders are wasting time, effort and money winning the battles of the past on the national stage. I don't think this bodes well for U.S. manufacturers and, if this situation does not change, we'll have only ourselves to blame. Patricia Panchak is IW's editor-in-chief. She is based in Cleveland.

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