US should lower economic white flag

By Harold L. SIRKIN

McClatchy-Tribune

America’s politicians have bequeathed the next generation a mess.

In five months, the third class of college students to graduate during the current economic downturn will enter the workforce. Even with the recent increase in hiring, many will have trouble finding jobs.

Despite Washington’s intervention in the economy, many small and mid-size businesses still can’t get bank loans. These are the businesses that produce most new jobs. There’s something wrong when successful businesses can’t get loans.

Meanwhile, more jobs continue to go overseas, as China, Brazil, India and other low-cost countries show that they’re just as capable as the big industrial powers. Even America’s long-standing technology lead is being challenged. If we don’t reverse this, we lose control of our own destiny. Some pundits are already waving the white flag.

And then there’s the deficit — and the national debt — fueling worry about the dollar. Along with a growing economy, voters want a shrinking deficit.

‘Turnaround’ expert

If Congress was a business, all incumbents would have been fired in the last election and a “turnaround” expert brought in to clean house.

Many voters gave Republicans the benefit of the doubt this time — not because they necessarily favored the GOP, but because the Democrats had two years to make things better and they dithered. Republicans who now control the House share responsibility for what happens moving forward. Voters want results, not the “just say no” policies the GOP has followed in the past.

Voters are tired of delaying tactics disguised as government studies, partisan squabbling, empty promises and shallow sound-bite politicians who are more interested in scoring points and campaign contributions than fixing things. It doesn’t matter whether the Bush or Obama White House, the Federal Reserve, or the Congress is “most” to blame for the mess. Washington needs to end the blame games and look to the needs of our country.

America needs to realize there’s an economic war taking place. We can’t win with complacency, by focusing on the needs of special interests over the American people, or by whining and complaining about the unfairness of “cheap” overseas competition. The competition will only get worse.

Our country today is like the proverbial frog in the pot of boiling water. The temperature gets hotter but everything still seems alright. Eventually, we will pass the point of no return. We already are too close.

We need politicians today who are real leaders, who put country above party, can help restore America’s confidence and who inspire us to meet the challenges of our reality. This should be the new litmus test in politics.

Tax code overhaul

America is still the “big dog” in the global economy. But to remain so will require an overhaul of the tax code — with fewer tax breaks and lower rates — to address the deficit and national debt. It will require making America’s industrial base leaner and more productive. It will require creating the conditions where companies will want to create jobs in the United States, rather than defaulting to overseas. We can do this but we must act now.

As wages in China and other low-cost countries rise, and exchange rates move, there’s no reason we can’t be number one in manufacturing. European and Asian automobile companies view the United States as a great automobile manufacturing platform. With the proper policies in place, we could do much, much more.

There’s no more time to waste while nearly one in ten Americans remains unemployed.

If Americans believe our country’s best days are past — and that China and India will dominate the 21st century — the prophecy will be fulfilled. For those of us who disagree, it’s time to lower the white flag, return to work and prove the pessimists wrong.

Harold L. Sirkin is a Chicago-based senior partner with The Boston Consulting Group (www.bcg.com) and author of “GLOBALITY: Competing with Everyone from Everywhere for Everything.” Distributed by McClatchy-Tribune Information Services.