Editor's Page -- Our Divided House Will Not Stand

Sept. 1, 2003
We must pull together in urgent and reasoned debate to adapt to this growth spurt of globalization.

We're living in what I believe is one of the "inflection" points economists are always talking about. The dramatic economic, political and social upheaval that we're now experiencing -- and how we as leaders respond to it -- will define this era no less than the Great Depression and the Cold War defined earlier ones.

Yet, as the radical restructuring of our nation's wealth-creating sector continues at breathtaking speed, our public policy and manufacturing leaders are failing to rise to the occasion. Instead, we have silence, with sporadic and largely symbolic attention to the manufacturing sector, from the Bush Administration. We have the promise of a report (long delayed now) on the plight of U.S. manufacturing from the Department of Commerce. We have a huge chasm in Congress between legislators who have accelerated their all-out assault on what they deem "corporate welfare and crippling taxes and regulation" and those trying to halt the "dismantling" of government "safety nets." We have bickering and name calling between leaders of different manufacturing associations drowning out the few associations that are calling for careful analysis and debate. We have lobbyists from all industry sectors working feverishly to capitalize on the confusion, updating their stale arguments to justify the same old requests by citing the concerns brought on by the upsetting forces of globalization.

This has to stop.

We must pull together in urgent and reasoned debate to adapt to this growth spurt of globalization. While it may send a small group of hard-core disbelievers into a seething rage, it's time they acknowledge the positive role federal government leadership has historically played in U.S. economic success -- especially in times of crisis.

Likewise, for the small group of hard-core believers in the power of "big government" to cure all social and economic ills, it's time to acknowledge that we must debate the degree to which U.S. legislation, regulation and government spending help or hurt U.S. industrial competitiveness.

Thankfully, we have a shining best practice case study that in recent history successfully solved a similar problem in a manner that addresses the concerns of these two factions. That best practice is Sematech.

A consortium, Sematech was formed in 1987 when U.S. semiconductor manufacturers and the U.S. government came together to strengthen the U.S. semiconductor industry and enable it to compete with the influx of Japanese-made products that threatened to decimate the U.S. industry.

Funded by President Ronald Reagan, an avowed small-government advocate, the consortium successfully and quickly completed its mission. By 1992 U.S. semiconductor firms regained leadership of semiconductor chip sales for the first time since 1984. By 1996 government funding ended.

To build on the Sematech example, however, we need leadership; someone must step forward to propose a solution that can mollify both the anti-government and pro-government factions. In the highly charged, increasingly political environment, it will be difficult. President Bush is unlikely to volunteer that U.S. manufacturing is in crisis or that it requires additional help beyond his existing economic plan. However, I have no doubt that he would endorse a smart, well-targeted plan based on the overwhelmingly successful Sematech model.

Are you the leader with the plan we need?

Patricia Panchak is IW's editor-in-chief. She is based in Cleveland.

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