Fair or not, other governments are stealing our economic future through targeted subsidies and aggressive spending on infrastructure, education and workforce training. We can cling to laissez-faire orthodoxy and allow what is left to slip away, or, as Leveris puts its, "get into the game and play to win."
Although the threat here may be from China, our model ought to be Germany - another high-wage economy that over the past decade has restored its competitiveness by achieving the lower unit labor cost in Europe. How did they do it? Certainly not by slashing government or pulling back on investments and incentives or shying away from regulations that stimulate demand for cutting-edge technologies, as tea party Republicans are determined to do.
Some will point to modest tax cuts and reforms of labor laws that allowed all firms to lower costs and encouraged investment. But perhaps the more important changes were hammered out between workers and the midsize firms that comprise the backbone of Germany's manufacturing sector. Workers agreed to work longer hours for slightly less pay under less-restrictive rules. And because most of those firms remain family owned, the executives who run them were willing to forego big salaries and short-term profit and invest in their long-term futures. In other words, they did it the way Ben Affleck and Tommy Lee Jones proposed to do it in "The Company Men."
Over the past two months, President Obama seems to have finally gotten serious about a government-led strategy of "getting in to the game and playing to win." High-profile appointments have been made, initiatives launched and trade complaints lodged. The president's budget, to be released this week, will include billions of dollars in new public investments.
But another lesson from the success of Germany and the Asian tigers is that it takes more than smart and aggressive government policies to compete and win in the global economy. It also requires a change in the business culture and the political dialogue, a national focus on competitiveness and an acceptance on the part of all of us for short-term sacrifice.
The steel and auto industries offer proof of what can be done, and it should offer some comfort that Ron Bloom, one of the architects of those revivals, has been tapped to quarterback the U. S. manufacturing initiative. The tragedy for millions of Americans and the economy in general is that we waited far too long.
As Leveris and others have warned, high-tech manufacturing is now where the steel and auto industries were a generation ago. We can either cling to old ideologies and keep fighting the same old battles, or we can roll up our sleeves and make the accommodations to assure our long-term prosperity.
It remains an open question whether multinational corporations will join in that effort. When they don't, we need to quickly reassemble the capital, the talent and the technology into new enterprises and do whatever it takes to prove them wrong.