We can't control our illegal immigration, so we focus on the immigration problem by limiting legal visas for skilled workers, thus depriving our technology industry of the resources to grow and dominate the global competition.
Yet, Michael Porter pointed out: "We can't use immigration as a substitute for equipping Americans to succeed through education."
Fair, but Free Trade Policies
History shows that every time America has raised trade barriers, our country has suffered. And that every time we have faced up to our competition, we have created new and growing sectors of our economy. Unfortunately, public opinion is currently led by an emotional appeal to protectionism, not by recognition of history.
Deborah Wince-Smith, the president of the Council on Competitiveness, pointed out that we are in a global competition that has a 24-hour labor arbitrage. That is, work will be done where it can be done most cheaply, so we can't compete on low wages or on commodity products.
But we can't build a trade wall around ourselves because in just a decade, 80% of all consumers in the world will be outside the U.S.
Fairness is critical in any trade agreement. Porter explained that the U.S. is in the business of "producing intellectual property" for sale. But while we're buying goods from China, they're "stealing" our products, our intellectual property. Trade agreements must deal with that issue, he stressed.
Controlling Costs to Be Competitive
The two key areas in the cost-control discussion were health care and legal costs. The fact that our companies pay twice as much as other countries for health care distorts business decisions and lowers wages.
One key remedy for our health care system would be to equalize the tax treatment of health-insurance purchases. Currently businesses can deduct the premiums, while individuals can't.
Health care costs are increasing at $220 billion per year. Said one panelist: "It's our Achilles' heel in our fight to remain competitive."
The audience of business executives nodded in agreement throughout much of the discussion. But the sad fact, noted one panelist, is that these issues are not being discussed in our national political debate. Instead, our Congress is focused on short-term solutions such as passing out $180 billion in $300 checks!
Will it take a massive decline in our standard of living over the next decade to get America to focus on these key strategic issues? Sadly, it's been our history that we only rally in a crisis.
Even worse, will we waste our resources on trying to protect the past, instead of competing for a new global future? It's something to consider as we observe this Memorial Day holiday.
Let Gerstner have the last word: "We need to focus on
our greatness, not try to tear down their greatness -- because that will not happen!"
And that's The Savage Truth.
Terry Savage
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