By Timothy P. Carney “Germany is the model.”
General Electric Chief Executive Officer Jeff Immelt, opening for President Obama at the annual conference of the federal export-subsidy agency, phrased Obama’s industrial policy in terms that were not quite as focus-grouped as the president’s.
Immelt was at the Export-Import Bank’s conference rallying the troops behind Obama’s National Export Initiative, aimed at doubling U.S. exports in five years. Immelt praised Germany and Japan’s policies of “government and business working as a pack.”
The GE CEO lamented that “for so long, we’ve said, ‘It just doesn’t matter. Let whatever happens happen.’ ”
But in Germany, Immelt pointed out, Chancellor Angela Merkel huddles with corporate leaders and says, “Let’s kick some rear.” The Germans exhibit stronger “public will” and national “vision,” Immelt says. “The companies roam as a pack. They stick together. And the government supports the companies to be exporters.”
France and Japan are also better at economic team play. And Immelt flashed an envious smile when he said, “China pays all the bills.” “What you see in China,” Immelt added, “is an incredible unanimity of purpose from top to bottom.”
It’s not hard to translate Immelt, who is much blunter than the president. The economics Immelt derides — “let whatever happens happen” — is also known as the free enterprise system. The economics Immelt advocates — “government and business working as a pack” — is also known as corporate socialism, or corporatism.
President Obama is too savvy, and much too scripted, to use the same words as Immelt. But he has the same vision.
While a CEO speaking to a crowd of global producers, sellers and lenders can get approving nods for scolding us to get in line with France, Germany and China, the president, who is always speaking to the whole electorate, knows American voters don’t go for that we-need-to-be-more-like-Europe talk. So Obama has taken that same idea and packaged it in a way that appeals to — rather than denies — American exceptionalism.
“If we stand on the sidelines,” the president said Thursday, “while they [China and Germany] go after those customers, we’ll lose out on the chance to create the good jobs our workers need right here at home. That’s why standing on the sidelines is not what we intend to do. … We need to up our game.”
By “up our game,” Obama largely means increase government subsidies for exporters — greater taxpayer funding for export promotion programs, new “public-private partnerships” and more aggressive government advocacy.
This requires us to “summon a sense of national purpose,” and “come together in common cause,” the president said.
Such inspirational Hope-Change talk is Obama’s forte, but in the context of commerce, “national purpose” and “common cause,” like Immelt’s talk of “unanimity” and companies and governments acting as “a pack,” is a departure from America’s traditions. Competition, not cooperation, has made us the most prosperous economy in the world.
And, contrary to popular myth, business-government cooperation tends to favor the most wealthy while keeping the small guy down. Look at Obama’s venue Thursday — the Export-Import Bank. Ex-Im last year dedicated 64 percent of its loans and long-term guarantees just to subsidize Boeing sales. Speaking of Boeing, Obama announced this week that Boeing’s CEO, Jim McNerney, will chair the President’s Export Council.
The Obama administration and the staff at the Export-Import Bank are trying to shift more resources towards small business. But speakers at the Ex-Im conference highlighted the obstacles, including regulatory red tape and the maze of bureaucracy.
Obama can reduce some obstacles, but this much will never change: Government subsidies disproportionately go to those with the best lobbyists and the strongest political connections.
So let’s look at Germany. The biggest German companies today — Allianz, Deutsche Bank, Daimler, Siemens, Volkswagen, Krupp — were the biggest companies 90 years ago. The Global Entrepreneurship Monitor ranks Germany 49th of 57 countries on the score of nascent entrepreneurship. The United States outpaces all of Europe except for Norway and Iceland.
Low entrepreneurship means security for the powers that be. It’s a poor model for prosperity — unless you’re General Electric.
Timothy P. Carney is The Washington Examiner’s Lobbying Editor. His K Street column appears on Wednesdays.
