Boosting U.S. Exports

The November 24 issue of Fortune magazine has a commentary by Ram Charan (with Jia Lynn Yang) titled "A Goal We Can Believe In". You can find it here.

The two page article discusses some ideas to help boost U.S. exports. This is especially important now in this time of crisis that highlights an area of weakness in our economy. We have consumed too much and produced too little. And now,

We are now experiencing a full-blown crisis of confidence in America's economy. It shows up in consumer spending, which fell more than 3% in the third quarter, the sharpest drop since the dark days of 1980. Corporations are cutting their capital investments drastically for 2009. People see unemployment rising and have good reason to think it could happen to them, if it hasn't already. By September, 760,000 jobs had been lost in the U.S. this year, with more mass layoffs announced every day.

Ram and Jia propose this for the new President: (And from what I have seen of Barack Obama's capability I am VERY hopeful that President Obama will have focused, capable, empowered cabinet, staff, and advising members that will be considering just this sort of thing):

The new President... needs to restore faith in America's economic engine. He must show real leadership to do that. But what does that mean in a situation like this? It may seem counter intuitive at the moment, when there are so many short-term dangers, to get Americans focused on the long run. But that's what the new President needs to do. As Obama himself said during the campaign, "It is going to be part of the President's job to deal with more than one thing at once." Confidence depends not only on urgent, short-term patchwork but also on the pursuit of believable and attainable goals. That's what a true leader does: sets a goal that is clear and then inspires people to focus on achieving it. That's how great organizations are run, and that's what this great country desperately needs at this moment. The next President can get us out of this psychological and economic funk by pointing the way ahead, especially with one overarching objective.

With the concern over "socialism" and the view that "government is the problem"* can we please get some leadership to help the U.S. compete with other economic organizations?

Here is their proposal:

Here's what I propose: Set a goal to get our fair share of exports and jobs in the world. That means putting aside our protectionist impulses and rolling up our sleeves to compete with the rest of the globe. Americans can do this: Our productivity is still among the highest in the world. And according to the Bureau of Labor Statistics, business sector productivity in the U.S. increased 19% from 2000 to 2007. The U.S. is the best in the world at nurturing new businesses and technologies, we have the best institutions of higher learning, and even our labor cost is competitive with Europe and Japan. But somehow all that doesn't translate into an ability to capitalize fully on our strengths.

They lay out some specific ideas. You should take a read. I like the idea of looking at our competitiveness as a matter of national security. "Rename [the Department of Commerce] the Department of Exports and Imports and make this cabinet post as critical as Treasury or Defense."


* This quote from Ronald Reagan's First Inaugural Address, January 20, 1981, is often misquoted to mean that there is no need for government oversight, regulation, or leadership.