Anheuser-Busch Briefing Center, U.S. Chamber of Commerce
1615 H St NW, Washington, D.C.
Registration and Breakfast: 8:00 a.m.-8:30 a.m.
NCF curates a weekly list of blog posts that touch on emerging issues affecting the American business community.
American citizens love their soldiers, a phenomenon that sometimes mystifies people from other countries. Indeed, the level of admiration and support we have for our troops is unique to the United States. For those who offer their service and their life to defend and advance our interests, Americans are quick to offer thanks and praise, as they should. Our veterans and active duty troops deserve it. Yet, for a country that so clearly respects and appreciates its military, we sometimes forget that after the service is done, our veterans must have access to the opportunities, jobs and rewards they fought to protect.
Manufacturing has long been seen as the bedrock of economic growth in the United States. From the factories of the Industrial Revolution to the semiconductor plants of the Information Revolution, America has a proud history of making things. Yet anyone who has spent time in the Rust Belt has felt that uneasy sense that America’s manufacturing heyday lies in the past. Decay and joblessness abound in former boomtowns, all while factories seem to rise up every day in countries like China. Recessions come and go, yet manufacturing still seems trapped in the economic doldrums. Or is it? A close look at the state of U.S. manufacturing reveals a number of factors that seem to favor the future of U.S. production. As a recent report by the Boston Consulting Group put it, “Within the next five years, the United States is expected to experience a manufacturing renaissance.” Could this really be happening? The story of manufacturing in the United States is best told through two indicators: employment and productivity.
When an economy turns south policymakers spring into action. For example, they will target fiscal policy in the form of tax cuts or stimulus spending to boost demand. Or the Federal Reserve might loosen monetary policy in an effort to combat rising unemployment. These are called countercyclical policy reforms because they are designed to counter the downturn in the business cycle. These responses to economic woe are so predictable that the only debate becomes about how large a fiscal or monetary stimulus is needed and in what form (e.g. should tax cuts be preferred to new spending?). Policymakers acknowledge that these steps will come with costs. Tax cuts might starve the government of revenues, thus exacerbating the deficit. New stimulus spending will add to the nation’s debt. Monetary easing risks inflation down the road. But curiously absent from the discussion over policy options is any mention of countercyclical regulatory reform to combat economic downturns. Regulations are like taxes in that they impose costs on economic activity. And like taxes, they can be justifiable costs. But when an economy is struggling, it’s reasonable to ask if benefits of reforming or reducing regulations might outweigh the costs. The economist Scott Shane of Case Western Reserve University framed the issue well recently. In a review of the regulatory literature he noted:
Surveys and polls are great tools for telling us what we already know. Every once in a while though, they catch you by surprise. A recent survey by the Public Affairs Council did exactly that, with quite relevant results.
Out of all of the major institutions in America, which one do you trust the most? According to the Public Affairs Council, more Americans trust small businesses than any other institution. Not only that, but for all of the recent anger directed at large companies, some 61% of Americans surveyed still said that they had a somewhat or very favorable of these corporate behemoths. The federal government on the other hand -- well, Washington isn't shown much mercy in comparison. Its negative ratings are a mirror image of those for large companies (61% unfavorable). Both government and business are tarred by three-quarters of the public for appearing to have concentrated too much power in their hands, but what sets apart the two are how they treat their customers. Business is seen by the far majority of Americans as actually providing the service and products people want. The same can't be said for government.