We're the Bi-Sectoralists. One from the private sector world of global finance and markets, one from the public sector world of foreign policy in Washington and academia. We're tired of the "you're the problem -- no, you are" finger pointing between the public and private sectors. Both are. Both sectors need to get their own acts together, and to work better together if we're going to have any chance of revitalizing domestically and competing globally.
As a starting point, we offer five guiding principles:
Strength from Within: Two things are certain about the 21st century world. It is a disorderly place. Not a Hobbesian jungle, but also not some new world order in the offing. It also is a highly competitive place. More players are in the game, more arenas are being contested. From natural resource acquisition to corporate takeovers, from IPOs to green tech, the opportunities and challenges are great. Different political systems boast different strengths of governance capacities. Distinct cultures emanate their own allures. In such a world traditional foreign policy and military power are not enough. Global influence and economic security also require "strength from within." Mustering that strength from within is less about what we do to others than what we do for ourselves. It is about playing both offense and defense.
Policy and Markets: The policy vs. markets debate makes for good rhetoric but lousy results. A successful future requires both, working together. The reality is that policy makers and investors are joined at the hip and will be for years to come. Governments need capital and capital needs to understand how and why governments will intervene in markets. A non-mythical look at our own economic history, from the homestead movement to the Internet, shows how key government support has been to economic progress and technological innovation. Today, we need both public and private sector involvement in casting a new model. Public-private infrastructure on a grand scale to create jobs and rebuild our physical plant could be the test bed for that new model.
Less Short Term-ism: It'd be naïve to preach to politicians and investors to never think short-term. The technology of today doesn't help, creating endless noise and often a sense of urgency even when none exists. But it's even more unrealistic to accept pervasive short term-ism as a given when it is so antithetical to being strategic. It is a macro world, a world in flux where the big problems -- debt deleveraging, job creation, political cohesion, balancing our interests and ideals globally -- demand long-term strategic thinking in both the both public and private sectors. Daily talking points don't add up to coherent policy. Flash trading doesn't develop technologies of the future.
It's the Economy Stupid II: It's not just debt and it's not just jobs. It's both. Today's bifurcation between rising corporate profits and weak wage and employment growth was last seen in the 1950s. Shareholders benefit from the rise of the emerging world consumer while the two domestic job growth engines of the past decade, services and government, are downsized. What replaces them? Manufacturing is likely to boom in the US but it will not be enough to employ all those who seek a job. Jobs are not just a matter of income, they're integral to identity. They're not just about paying this month's bills, they're about hope in the future. No society can maintain cohesion and stability with pervasive structural unemployment. We need government policies that create jobs on a sustainable basis, and company strategies that bring jobs not just investor profits.
Recalibrating America's Global Role: The scope and pace of global change makes thinking through America's global role hard enough. Doing so requires thinking both onshore and off. Here too our politics have been making it even harder. Those who recognize that we are not as powerful as before are branded declinists. But it's the denialists whose ideology blinds them to the realities of today's world, and gets in the way of strategizing for it, who are the true declinists. Geopolitically, not all best ideas are made in Washington. Economically, the rise of the emerging world consumer can be a boon to the US. In these and other ways, if we play our cards right the US can be a big winner from the rise of the rest.
We'll have more to say building on these bi-sectoral principles and focusing in on specific issues. The private sector is not just part of an economy, it's part of society. Politicians are not just part of a party, they are part of a republic. While not a matter of law, there is a fiduciary responsibility to our broader society for each within its own sector and the two working together if we are to revitalize at home and compete globally.
We've already had an economic collapse, which the Fed band-aided to the tune of hundreds of billions and trillions, even. How's that going to work out, for the long run, if we keep up like that? What are we doing wrong, here, and what can be done better, from a management/policy standpoint? I say a little frugality ain't gonna kill us. Might damage somebody's ego, somewhere, but hurt pride can heal. When the dollar tanks and stays there, that might take more than a 'stimulus'.
Just give us an honest money that can't be leveraged by either the global financiers or the policymakers in governments. Then get out of the way of honest people actually working and making things.
Really? Where has government downsized? Government continues to grow. If the growth is projected to slightly slow, that doesn't mean it's contracting.
Having said this, I agree with Robert SF below concerning those who wield the real power in our society. You fellows have a very long way to go, indeed, to convince me that the public power elite and the private power elite (those Adam Smith, the father of capitalism, referred to as "the Masters of the Universe") are concerned with 'the general welfare" of "we the people." And it is many of these people who are behind the sloganeering and sound bites that seek to inflame our passions, keep the people polarized, convince us to vote against our own best interests, and obfuscate the realities.
I say let's go to the 90% marginal tax rate of the Eisenhower administration (that paid off the WWII debt and gave us a great era of prosperity) and we wouldn't even be having this conversation about debt vs. revenue, etc.
Far from pointing fingers at each other, the powerful people within the public and private sectors are quite cozy with each other. Corporations are people, my friend! And we're finding out this morning that the Obama administration handed an extra $1.2 trillion to Wall Street that we didn't even know about.
It's a mistake to believe that the current situation just happened organically, shaped by forces beyond anyone's control. For the last 30 years, there has been a systematic looting of the national wealth through public policy friendly to corporations, and through tax cuts that benefit the wealthy. This has been true regardless of the party in power. Both parties have become merely factions within the corporatocracy.
It's also a mistake to believe that self-interest will lead those in power to accept less power in exchange for the system continuing to work. There's hardly a historical precedent for that happening. If such a dynamic were likely, we wouldn't have the Tragedy of the Commons or email spam. We also wouldn't have Easter Island. By the time there were ten trees left on Easter Island, the problem had to have been bloody obvious. Yet they kept on cutting, all the way down to the last tree.
It's the same here. Someone's cutting trees, and they're not going to stop.
We've succumbed to the game rule of "he who has the most toys when he dies wins. So I'm not sharing any of my toys." Better said as "greed".
Too true. However, our present policy that we have been under for 30 years (i.e. trickle down) is a social contract between the public and private sector. The public sector says it will keep taxes low and in exchange the private sector agrees to use those savings to reinvest in the actual public (i.e. create jobs and/or increase wages). This would be great if it were to actually happen, but the private sector has largely forgone its end of the bargain.
Currently, the private sector IS THE PROBLEM. The ball has been in their court for decades, but they have not lived up to their end. Nor do they seem willing to currently give up the public sector protections they have been enjoying. So, let's not pretend that the public sector has been anything but gracious hosts to private sector antics which now have the economy falling down around us. It is high time for the private sector to realize that if they want to fiunction in this society, that they must contribute equitably to it. Of course, that assumes they want to keep our society as it is, rather than own the discourse it affords.
What SCOTUS isn't able to achieve by rendering unpopular & wholly anti-individual decisions, to Diebold & their fixed voting machines, our American way of life is quickly fading. Thank the heavens we still till our own lands & grow our own food. But Monsanto will make sure that becomes a thing of the past soon enough.
We should have asked the hard questions & sought out the abusers/criminals. We should have done pretty much the opposite of what was done & it's a testament to the lopsided nature of this social contract between the public & private sectors which have us looking more like an abusive marriage than a symbiotic one.
(1) "Bribery has to be expelled, cast out, and burned at the stake." We cannot and must not deny what is motivating our political leaders and our most-senior law enforcement officials. If you can "get away with" (sic) a financial crime by the high-crime of bribing public officials ... the financial crime remains, with all its terrible consequences. And investors around the world have it burned into their memory that the very Government of the United States has become an accomplice, arraigned against them. "High Crime is Real Crime," and it is also "International Crime."
(2) "The world does not end where your balance-sheet ends. In fact, that's just the beginning." Those tulips looked wonderful on paper. A company exists in a much larger fabric of tightly coupled industry and society ... and the entire fabric must be considered, because if the fabric itself is allowed to rot due to self-absorbed management by any piece thereof, the entire fabric will ultimately collapse. In opposition, and in opposition alone, there is strength.
You could call "bi-sectoralism," as: "heads and tails." Two sides. One coin. One mutual yet ever-opposing interest upon which all of our survival, and our prosperity, ultimately rests.
f and f
There are more than 312 Million mutual stake-holders in this grand social experiment called "The United States," and there are many Billions more outside its borders. This nation exists for them, not for the less-than 750 people who sit in the top chairs of power in D.C.
Companies, particularly international ones, must be especially mindful that they must not "play both nations against the middle," no matter what nations they're talking about, because that Weakens both, and so, ultimately, the company. (It doesn't matter where you're standing on the rope bridge when it collapses into the abyss.) It's fine to have "international," but we must have "nations," too.