Tuesday's WSJ featured a revealing interview with "Obama's Aussie," Andrew Liveris, Dow Chemical's CEO. "In June, President Barack Obama named him co-chairman of the Advanced Manufacturing Partnership, a government program to encourage development of job-creating technologies."
WSJ: Your prescription for more Singapore- or German-style government intervention and subsidies for investment may offend some of your customers and shareholders who have different political views. Is that a concern?
Mr. Liveris: I did not ask for subsidies. I asked for incentives. What's the difference? That's a recognition that companies and countries work together to say: What can I be good at?
When Germany after World War II rebuilt its economy, it became an engineering nation, and it preserved its engineering excellence, for example, through incentivizing trade schools. Sure, there were rebates for employers for training programs.
I'm not worried about the effect of my views on Dow Chemical if they're fully explained. All I do is point out that it's not a level playing field, that other countries offer these subsidies and tax incentives and are attracting investment.
Let's not be living in a fantasy world; that is happening. We do subsidize defense, we do subsidize parts of agriculture. So why are we afraid of the conversation when it comes to manufacturing?
Should we incentivize certain sectors for the national interest? It may well be the answer is "no." But at least let's not walk away from the topic. We need to open up our eyes and understand why so many other countries are taking our jobs.Let Noman briefly take a crack at explaining the the fear of starting a conversation about subsidizing manufacturing or any industry. First, there is the economic dictum rooted in human nature that capital will flow to where it earns its highest return commensurate with acceptable risk. Government intervention into the spontaneous capital allocation process is often wasteful and always inefficient. It preserves established prerogatives rather than stimulates the search for prerogative-yielding new industries--the only real protection for "our jobs."
Once government begins tipping the scales in favor or one industry, sector or another, the skids are greased for government corruption, a shifting of business's priorities away from operating and towards lobbying, and sapped economic vitality. It also sets in motion a dynamic whereby the government needs to confiscate the property and wealth of its citizens--in the present (taxes) or in the future (debt)--in order to garner the resources it has redistributed. Enough already!
It is the seeming inability of government and business actors to grasp those natural realities that makes Ron Paul's simplicity so appealing to debate watchers. What a breath of fresh air. Shift away from the fatal conceit that planners, politicians and their pals can do a better job of picking winners and tilting scales than the spontaneous, instantaneous decisions of people whose self and familial interests are at stake.
Mr. Liveris's is yet another Dow 30 chieftain's voice exhorting executives to overlook what the government is up to with the economy and to just play ball. "What we're seeing in Washington today is dysfunctionality. And the output of that is lack of confidence. I think everyone is culpable for that, not one part of government. Please, let's tone down the rhetoric and get our sleeves up and go to work." Yes, can't we just get along, and MoveOn? Prior to the Republican's recapture of the House in 2010, there was no dysfunctionality in the predations of government on the American economy or its citizens. Is Mr. Liveris auguring for a return to that blissful state of affairs? Or, is he suggesting that the party whose hegemony over the disastrous economic agenda since 2006, which caused the landslide electoral reaction of 2010, doesn't shoulder a greater obligation to relent in its insistence and cede ground?
Andrew Liveris appears to be another of President Obama's corporate fig leafs meant to cover up the nudity of his corporatist economic vision. Who would of thought that in fifty short years the Democratic party would become the foremost champion for the notion that what's good for Dow Chemical, or GE, is good for America?