If he is anything, Jimmy Carter is one of the foremost political broken-field runners in modern American history. Just when you think his ineptitude has caught his foot in a bear trap, he scampers away a few feet.
This is about all that can be said about his most recent corporate “revitalization” program. All it amounts to is a greater flow of money from the taxpayers to corporations in the form of more investment tax credits, accelerated depreciation, loan guarantees and the like.
Have these worked in the past? There is little if any evidence to show that these measures increase productivity, innovation or competition. Instead, these federal subsidies have in the past shored up business mismanagement, anti-competitive practices and inefficiency. Perhaps when congress starts the hearing process on these White House proposals some witnesses will show just how such corporate welfare has failed in the past and cheated small taxpayers who largely are paying for these handouts.
Washington’s economic policies reflect Wall Street’s economic priorities. They do not go to the structural problems in the economy nor do they address the imbalance of power between corporations and consumers.
For example, economic prosperity is directly associated with the presence of competition (which rewards success and penalizes failure) and consumer rights. the U.S. economy is full of monopolistic, oligopolistic and other anti-competitive elements ranging from the large oil companies to the so-called professions. These not only cost consumers tens of billions of dollars yearly, they also represent wasted resources, often reflect political corruption, and suppress better ideas and inventions.
Did Carter call for a greater pro-competition policy using the enforcement, procurement, research and other tools already in his hands? No. Indeed, he never mentioned them.
Important U.S. industries — like autos and steel —are in trouble because their management and competitive ability are badly lagging. The auto companies even refused to respond to motorist demand after the market gave them the message, replete with swarm of Japanese and German car imports.
A recent article in the Harvard Business Review concludes that a major problem of business is poor, short-sighted business management. Other commentaries in a similar vein are beginning to appear, saying that business cannot lay its problems on Washington but must look to the quality of its management.
This emerging literature notes pointedly that Japan and the European countries have just as stringent if not stronger regulatory and tax laws, yet their companies are beating U.S. companies more and more.
As long as business managements can scapegoat Washington with their large propaganda ability, they can divert attention from their inadequacies and insulate themselves from pressures for change. They can accumulate huge cash surpluses, as Business Week magazine reported recently, and invest them in conglomerate mergers and other non-productive outlets.
Those pressures can come, in important part, from the sting of vigorous competition, the informed individual and organized consumers, and a president who recognizes the critical stimuli that make for a prosperous economy.
Jimmy Carter did not recognize any of these necessities. Instead, to “revitalize” his political campaign, he produced a series of economic and aesthetic measures that will only postpone the day of economic reckoning.
If that day is after Nov. 4, 1980, the broken-field runner from Plains will have done it again.