Yesterday, President Obama gave a progress report on his National Export Initiative and announced the members of his Export Council (which included Ivan Seidenberg, CEO of Verizon who as the new head of the Business Roundtable recently blasted the Administration for being anti-business). The goal of the Initiative is to double exports in five years. As I’ve noted before, that is a do-able goal but will require a sustained push to increase our exports even beyond the recent high rates found for a few years in the mid part of the last decade.
The Initiative is a major part of the Administration’s economic strategy. As the Wall Street Journal commented, “The White House is shifting the focus of its job-creation efforts away from appeals for more federal spending and toward expanding exports and persuading business leaders to invest more.” The Washington Post noted “The topic of exports is especially important because the recovery has been driven far more by sales abroad and business and government spending than it has by consumer spending.” (FYI — the pieces in the FT and the New York Times focused mostly on the trade agreements part of the story.)
Not everyone agrees, however. For example, my friend Leo Hindery, Jr. takes the President to task (see
“Doubling U.S. Exports” Not a Sufficient Jobs Policy):
There are three problems with this pledge. First, doubling U.S. exports would create just 10 percent of the 22 million new jobs we need, and yet, combined with multiple new free trade agreements (FTAs), it seems to be the only specific jobs policy coming from the White House. Second, this strategy wrongly overshadows the more critical imperative of ‘import substitution’. Third, the first three FTAs being proposed — with South Korea, Panama and Colombia — are very poorly negotiated and will cause even more American jobs to be lost overseas.
I don’t necessarily agree with all the point Leo makes. For example, I’m not in a position to judge whether the FTAs are poorly crafted or not. But there is an underlying point that I strongly support. The goal is not increased exports; that is a mechanism. The goal is sustained economic prosperity and job creation. That means improving the competitiveness of American companies so they can better compete in all markets — foreign and domestic. Both capturing more foreign markets and regaining market share at home are important. And while there are specific actions that need to be taken to open up foreign markets, gaining market share both at home and abroad will come from transforming our economy – as noted in my earlier posting.
I think the President gets this. In his remarks, the President outlined his growth agenda:
One thing we know is this growth won’t come from an economy where prosperity is based on fleeting bubbles of consumption, of debt; it can’t rely on paper gains. We’ve seen where that led us, and we’re not going back. The truth is we’ve had to face over the past year and a half the truth that if we want to once again approach full employment and fuel real economic growth, then we need to put an end to the policies that got us here, tackle the challenges we’ve put off for decades, and move this economy forward. We need to lay a new and stronger foundation on which businesses can thrive and create jobs and rising incomes, on which innovators and entrepreneurs can lead the world in generating new technologies and products and services. We have to rely on a new foundation on which America can harness what has made our economy the engine and the envy of the world — the talent and drive and creativity of our people.
I think, however, he needs a broader set of policy tools — well beyond the existing export promotion and R&D agenda.
So let me propose a way to create that agenda. 25 years ago when facing a competitiveness challenge, President Reagan created the President’s Commission on the Industrial Competitiveness (the Young Commission), which proved to be a successful mechanism for confronting the issues of its time. It’s time to create a similar a Commission on the Future of the US Economy. The competitiveness agenda has changed but the need to craft a holistic solution remains. A new Commission could give us exactly the broader vision we need to tackle the challenges that President Obama has eloquently articulated.