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A Public Service Message from the American Income Life Insurance Co.Waco, TexasBernard Rapoport, Chairman of the Board and Chief Executive Officer The New Economic Agenda Part II By Gar Alperovitz The next President can make the revitalization of our basic industries, their work forces, and their surrounding communities a national priority. We cannot abandon the so-called sunset industries. They are essential to our national security, and to balanced economic growth. The next President must help forge a partnership of business, labor, and government that seeks to make us first again in the production of quality, costefficient cars, not only for domestic markets but internationally. He can make revival of our steel industry and other basic industries high priorities, and bend the capacities of government to serve these efforts. At the same time, new growth industries must be rapidly expanded along new lines of management and production. Well-publicized efforts are already underway in sections of the country the Austin-San Antonio corridor in Texas and Silicon Valley in California are examples but a national effort is required if we are to assert world leadership in the emerging technologies of bioengineering, space applications, cornputers and other markets of new demand. Venture capital, expanded research programs, and a better-educated work force must become available on a larger scale if America is to return to the frontiers of invention, production, and marketing. The President can define and push coordinated efforts by our economic institutions toward these ends. The capacities of the Executive Branch can be much better focused and organized for making contributions to national economic-planning and decision-making. The federal government has provided precious little in the way of longer-term goals, information, and planning for economic growth. When leaders of business and labor approached the Reagan Administration with the request that tripartite discussions initiated by President Carter continue, they were told by the White House that such efforts are subversive to free enterprise. The next President, however, must establish an Economic Reconstruction Council including leaders from the highest levels of the Executive Branch, business, labor, education, and other branches and levels of government that focuses the national commitment to basic industries, physical infrastructure, and technological innovations. The Council can hammer out the agenda for growth and job creation. It can serve as the investment and development arm of the federal government. It can operate as the instrument of federal coordination with other levels of government and the private sector across a broad range of longer-term economic goals. 3. Long-Term Planning. For more than a decade, the pressures of economic survival in a troubled economy have locked much of American business into patterns of short-term decision-making. It is commonly said that American executives who cannot show a profit on new investments within three quarters lose their jobs. Other elements of our society integral to the success of our business have also operated in terms of immediate rather than longer-range interests. Business, labor, education, and government must begin to base economic decisions on the longer-range interests of our people and our industries. Capital investments must be more intelligently directed for rapid expansion of high-tech and information industries and revival of older industries. The national climate for longer-term goals and plans can be decisively influenced by Presidential leadership, and the federal government can direct patterns of capital investment with public funds far more intelligently. The United States is the only major industrial power without national capacity to obtain systematic, accurate, up-to-date information about its domestic economy or the global economy. The information we get now from government agencies is full of gaps and effectively obsolete by the time it reaches users inside and outside government. Government economic statistics reflect a time when it was not necessary to look ahead on a global scale. Yet intelligent decision-making in a modern economy about markets, investments, business operations, foreign competitors, and trends requires the highest quality information. Businesses, unions, schools, and government at all levels cannot effectively look ahead or see the larger economic trends without such information. The next President must move swiftly to reorganize and enhance the capacities of the Executive Branch to provide superior economic information to all our economic institutions. Successful management of our economic future depends upon it. American Income Life Insurance Company is pleased to have the author’s permission to publish this position paper for the perusal of Texas Observer readers. Dr. Alperovitz is the Director of the National Center for Economic Alternatives, 2000 P St. N.W. #200, Washington, D.C. 20036, and Professor of Economics at Notre Dame University. The first installment in this series by Dr. Alperovitz was published in the March 11, 1983 Issue. The failure of Reaganomics has brought both the nature of our economic crisis and alternative solutions into much sharper focus. Out of this common recognition, the elements of a consensus for coherent action are emerging in both the private and public sectors. They are ready to be brought together in a pragmatic set of directions, policies, and programs needed to bring about economic reconstruction. 1. Global Economic Expansion. We are not going to see sustained growth for our domestic economy without achieving the conditions for global economic expansion. Strong and informed leadership by the next President on the world stage will be required to break the grip of worldwide stagflation. Lower American interest rates are one important step in this direction. But we must also move to secure closer coordination of general economic policies with our trading partners policies designed to foster long-term growth and to create jobs. Global economic cornpetiton is inevitable and desirable, but competition can succeed to the benefit of closely-linked Western economies only within a general framework of international economic stability. Multinational corporations, banks, and lending institutions have become major forces in the global economy. They can be instruments either of great progress for all of mankind or of deeper divisions and inequalities. The next American President must define goals and policies and perhaps lead in establishing new international economic institutions that stabilize new global patterns of investment, development, and growth within a framework of hope and progress for all. Forms of protectionism by some of our trading partners and allies are punishing American industries and prospects for future economic expansion. The drift toward greater protectionism is a threat to global economic growth. Protectionism can only rebound to harm more severely our prospects for growth and the longer-range prospects of our trading partners. An expanding framework of free and fair trade is the only context in which more aggressive, skilled, and long-term expansion by American businesses into growing markets overseas can proceed to our benefit and to the benefit of our partners. The American people are beginning to understand that economic growth in America requires an expanding world economy. The leaders of our economic institutions are beginning to respond as best they can under the conditions of crisis. The Reagan Administration is doing little or nothing. But the next President must lead in negotiating a global framework of free and fair trade, and he can lead in establishing the necessary goals and coordination, both at home and internationally, to create stability and growth for the global economy. 2. Improved Productivity. Both labor and management recognize that increased productivity is essential to economic renewal. Stagnant productivity levels have been a sure formula for retrenchment, layoffs, and a slide to the losing side in global competition. Many of our basic industries have entered into this pattern of decline. An all-out effort must now be made to improve American productivity. A common recognition of how to begin to go about this effort is a basis for revitalizing our older industries. Greater efficiency in assemblyline industries can be achieved through new investments in automation, matched by investments in retraining experienced workers for the new skills required. New patterns of collective bargaining agreements such as those between the United Auto Workers and Ford are pointing the way to cooperative steps forward that would have been unimaginable only a few years ago. New incentives are being defined that give American workers a greater stake in the competitive success of their companies. These include profit-sharing agreements, worker participation in strategic company decisions, and programs of retraining and redeployment under conditions of reasonable career security. We must keep moving ahead on all these fronts, and government can help. THE TEXAS OBSERVER 13