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Show UJc can do if ! William Broyles, Jr. ' Reprinted from the Texas Monthly key interest groups, cut back the bureaucracy. bu-reaucracy. It has to be done. We can we as individuals do? For starters, we can save more and spend less. We can think twice about buying that Japanese car or television set. So long as the Japanese won't buy American Ameri-can goods, every penny that we spend on a Japanese product hurts America. If we are going to compete, we need to follow the first lessons of selling, know your customers. For two centuries cen-turies we have lived as an island. Now we are inextricably a part of the world. If we keep on being naive and self indulgent, in-dulgent, we are going to go the way of all the world's innocents: we are going to get taken. i Over the past few months I have been trying to buy a component stereo j system made In America. I might as well have been looking for a skyhook. I became accustomed to the salespeople's stunned reactions when I asked to see their American receivers, turntables, and tape decks. 'Buddy," one salesman finally fin-ally stammered, " you're about 20 years too late. We just sell Japanese products." Wlty a few minor exceptions the American stereo Industry which only to decades ago was the pioneer In the the business is no more. The list of other American Industries whose bones He bleaching on the prairies is almost endless: motorcycles, fishing reels, TV televisions, radios, clothing, children's books ( yes; check and see how many of them, all with nice Western children, come from Japan), steel, shipping, and on and on. It's hard to find things made in America anymore. And that says a lot about the sorry state of our economy. The major cause of our economic sickness Is that we aren't meeting the competition of the global economy. Inflation Infla-tion Is only the symptom of a more serious disease. The government blames OPEC, but that won't wash. Western Europe and Japan get virtually all their oil from OPEC, but their inflation rates are less than a third of ours. The major crazy quilt of tax and regulatory legislation legis-lation that discourages investment and hamstrings innovation. What life remains Is stifled by labor unions grabbing for what they can get and businessmen who can't see beyond yesterday's profits. The: beyond our means, unwilling to sacrifice sacri-fice anything today for something tomorrow, tomor-row, always demanding that our politicians poli-ticians fight fiercely for our short term interests and to hell with the future. Our competitors, on the other hand, take the long term health of their economies seriously. The Japanese approach, for example, exam-ple, is simple. They set out to dominate domi-nate a world market, and they organize their economy to do it. In the sixties: the market was steel. They copied the best technology from all over the world and threw up .tariff barriers to keep out foreign steel while their own steel industry grew. Then they ran rings around American steel companies, first in the Third World, then in America itself, where they undercut out stodgy and outmoded steel companies to capture the world market. Once they dominated steel, the j markets in motorcycles, ships, cars, and a whole range of machinery fell like dominoes. In the seventies they did the I same thing with consumer elec- ) tronics. That's why 1 couldn't find my American stereo system. For the eighties eight-ies their target Is the lucrative market in computers, microprocessors, semiconductors, semi-conductors, the very industries that lead the American economy just as steel once did. The Japanese and the Europeans have their problems, but basically they are playing the game better than we are. Their workers are willing to keep wage ; demands in line with productivity, and j their businessmen are not afraid to put off Immediate profits in order to capture cap-ture a market. In the meantime they give their citizens every incentive to "save, not spend, which creates a vast pool of capital for investment in new I technologies and equipment. As a result, re-sult, their economies are becoming more productive; our productivity is actually declining. Their economies are based on i production, ours on consumption. Now j we're trying to cure our economic sick- ness by fighting Inflation with recession, and it's like burning down the barn to kill the rats. Sure a recession will stop our consumer spending spree. But it will also choke off the Investment spending that would make us more competitive com-petitive and hold down Inflation in the long run. Senator Lloyd Bentsen has been crusading for years to shift the focus of our economic policies to the production pro-duction side of the economy. "The American worker is still the best in the world. But If we don't give him the most modern equipment, he's going to fall behind." At 'stake Is our nation's most prized possession, it's economy. We need specific goals. We need to encourage the shift of resources Into our most roductive idustries, which means clos-in clos-in outmoded factories and expanding innovative in-novative ones. With such a policy, we could come out of the current debacle stronger than ever. Among other things we should: Forget our ideals about free trade. Free trade works in the abstract, but it takes two to tango. Of the $60 billion or so trade deficit we've run in the past ten years, $45 billion has been with Japan. If we are going to buy their TV's, stereos, stere-os, motorcycles, and fishing gear, then they can damn well buy our computers, beef and citrus fruits. We roust make it clear that if they don't buy more from us, we'll have to buy less from them. Make a penny saved a penny earned: We can't compete in the world market as long as we save less than any other industrial nation. The West Germans save 15 percent of their income; the Japanese 25. We save less than 5 per cent. Savings are a primary source of the funds that businesses borrow to make long term investments in new technologies. tech-nologies. No savings, no investments. But what's the point of saving? The government encourages us to spend by allowing us to write off the interest on our credit cards and our consumer loans; that deduction should be abolished. So long as It makes no sense to save or to invest in the future, our economy will never recover. Tear down our factories: Right now the American industrial base is scrapped scrap-ped and rebuilt about every thirty years. Japan has a national policy of replacing its factories and equipment every 10 years. We need to restructure our capital - gains tax to reward Invest -ment In productive industries and penalize investment in speculative items like art, gold and existing real estate. Revise the Sherman Antitrust Act: The antitrust act was passed in 1890 to -improve competition In America. Its primary effect today is to prevent American Ameri-can businesses from competing with government sponsored cartels In Japan and Europe. We should sponsor long range research and development projects in the high technology Industries that will be the economic leaders of the 80's. We also need to encourage small firms to boost their exports by pursuing coordinated co-ordinated marketing and services efforts they couldn't do alone. Balance the federal budget: The federal government has not had a balanced bal-anced budget in over a decade, which is the single biggest reason for the current invlatlon. We can't afford, for example, to keep paying Social Security benefits for rich old folks; that money should be helping the truly needy the indigent indi-gent and disabled, the battered children, and funding education and training that Improves the productivity of our work force. We must make some hard choices and stamp out boondoggles, say no to mm |