Just As Scary As Terror

Take the example of Singapore, a relevant choice because it faces smaller-scale versions of the problems that beset the U.S. economy: It has to compete with much cheaper labor and much larger markets available in its Asian neighbors. Every couple of years Singapore government officials proactively seek the advice of private business leaders and other experts and come up with a National Economic Strategy that reorients public policy -- tax laws, worker training, industry regulation -- to strengthen competitive industries and shore up weak aspects of the economy. The results of this approach are obvious: Singapore's economy is growing at an annualized rate of 11 percent (about three times that of the United States), a remarkable pace for an economy that is already so advanced.

The United States has no such formal strategy, nor any systematic process for devising one, and this is a mistake. There's little point in producing a National Security Strategy every year if we ignore the wellsprings of that security -- the economic might that underlies our military strength, our political clout and our internal stability.

Consider our broken health care system. Americans pay, on average, $4,000 more a year for the same or less adequate health care than citizens of other OECD countries; at General Motors the cost of employee health care now exceeds the costs of steel. That is the kind of labor cost that drives foreign investors (and domestic companies) overseas. So health care becomes a jobs issue; and the lost jobs are an economic security issue.

This is a cold, hard reality. And every minute we ignore the problem or fail to view it in strategic terms we are losing ground. In this light, health care should become a top priority in a thoughtful National Economic Strategy, as should education and investment in infrastructure. Addressing these areas would mean creating jobs -- and that is a much more positive, proactive approach to protecting workers than reactive, punitive trade strategies that produce tensions with our trading partners.

Meanwhile, we are going to have to do more to successfully promote our investment advantages abroad. The United States has 19 federal agencies that promote exports. We have zero that promote foreign investment here. We have agencies that help insure and support U.S. companies investing overseas. But we don't have any that do the same for companies investing here. Scores of our foreign competitors do have such programs; for them, investment promotion is a top international economic priority. Why should we cede the field to them? It's time to establish a federal entity to make sure we use all available tools to enhance attractiveness to investors.

The process of stopping every two or four years to take a strategic view of our domestic and international economic circumstances would help to restore balance and perspective to our overall policies. It would enable us to better set priorities, minimize risk, seize opportunities and ensure effective action. Of course, as we have painfully seen elsewhere, recognizing threats or even having strategies does not always translate into such action. That requires leadership and political will.

Fortunately, that's where American voters come in -- because in the course of their daily lives they see how these massive economic concerns translate into critical priorities. In fact, for Main Street Americans, economic issues are the leading factors on which their families' security and insecurity will turn. Asking them, even implicitly, to choose between addressing them and combating physical threats is to pose a false choice that increases the danger in every area of our national life.

Author's e-mail: djrothkopf@aol.com

David Rothkopf is a visiting scholar at the Carnegie Endowment for International Peace and chairman of Intellibridge Corp. He served as deputy undersecretary of Commerce for international trade policy during the Clinton administration.