EDITOR’S PAGE

AN ITEM THAT should be at the top of every legislative agenda, especially in Washington, is whether or not the United States can retain its leadership position in the world. Political analyst Kevin Phillips explores that question in his latest book, Staying On Top: The Business Case for a National Industrial Strategy.

Phillips said in a recent conversation in Dallas that the answer is yes, we can stay on top-but only if we move immediately to counter the business-government partnership of Japan with a business-government collaboration of our own. The old laissez-faire framework that conservatives favor won’t cut it anymore. Neither will the federal interventionism so loved by liberals. In fact, both positions need to be synthesized, according to Phillips, into a new policy for meeting foreign competition.

Anyone who doubts the near-desperation of our circumstances should note this report made just over a year ago by Alfred Eckes, former chairman of the U.S. International Trade Commission: “Last year, our five leading exports to Japan were corn, soybeans, wheat, cotton and coal. Our five leading imports from Japan were automobiles, trucks, oil-well casing and motorcycles.” We send them raw natural resources; they send us sophisticated manufactured products in return. It’s the economy of Colonial America brought back to life.

According to Phillips, the odds against us are these:

“Capital costs: A Japanese company raises money by getting bank loans with interest currently pegged by the government near 7 percent; an American company typically has to pay 12 or 13 percent.

“Tax breaks: An American company pays essentially the same federal taxes for domestically manufacturing goods for sale in Calcutta as it would for sale in Connecticut. A Korean company avoids taxes in the manner described by [an executive of] Daewoo Heavy Industries: ’When we export, we don’t pay any income tax, we don’t pay the defense tax, and we don’t pay tariffs on the imported raw materials that go into the exports. That adds up to almost 40 percent of the production cost.’

“Antitrust: Two steel-manufacturing concerns in nations belonging to the European Community get together. . .to exchange plants and specialties so each can survive by targeting only one or two segments of the deteriorating steel market; two similar concerns in the United States would violate U.S. antitrust laws if they practiced the kind of collusion found in Europe.”

Freedom from high interest rates, export taxes and antitrust laws that prohibit cost-saving collaboration within an industry- that’s what’s permitting Japan and other foreign competitors to build their commercial empires at our expense. In addition, the governments of Japan, France and West Germany are targeting certain industries for special help. Our fear of government intervention prevents this kind of aid to American industry, so our companies are left with the freedom to fell farther behind their competitors abroad.

Not that Phillips is advocating this kind of targeted government assistance to selected sectors of the U.S. economy; on the contrary, he says that we should insist that our partners stop these unfair practices.

Nor does Phillips wish for a government superagency that would choose winners and losers among American companies. He refutes the fashionable notion that we should subsidize high-tech industries and allow steel, automobiles and textiles to ride off together into the sunset. Euthanasia for our basic industries is practically undesirable, Phillips argues, and politically impossible. The old-line lobbies will be essential to getting a new industrial policy approved in Congress, and national defense requires that we maintain a capacity for manufacturing steel.

Phillips’ proposed program starts slowly: Create a federal Department of International Trade and Development (DITD); pass trade-reciprocity legislation (we’ll give access to our markets to those who give us access to theirs); amend antitrust laws to permit high-tech collaboration on research and development; expand credit assistance and tax incentives for exporters; restructure labor-management relations; consider a value-added tax (VAT).

These and other measures would comprise a strategy built upon existing constituencies. It would embrace the old world while reaching out to the new. It would restructure basic industries, then adapt to high-tech as quickly as this emerging lobby can muster sufficient clout. In Staying On Top, Phillips has shaped a proposal that is sound, sane, plausible and imperative.



On February 12, this city will vote yea or nay on the Dallas Independent School District and the administration of Superintendent Linus Wright (see Phil Seib’s story on page 38). The bond election scheduled for that date is perhaps the most critical in the history of our public schools. If needed repairs and construction can be financed, we will have a chance to return education to the neighborhoods where it belongs.

This will be the first bond election in a long time that hasn’t benefited from the formidable efforts of political consultant Judy Bonner Amps, who died in December. Since then, an amazing number of people have called her office to say that they wouldn’t be where they are today if it hadn’t been for Judy. The elections of state Sen. Oscar Mauzy, U.S. Rep. Martin Frost, former County Judge Garry Weber, County Commissioner Chris Semos and Mayors Jack Evans and Starke Taylor are only a few of the instances where Judy’s masterful campaign management made an important difference.

Her impact on the life of this city was far greater than most people (including Judy) knew when they were pulling the lever for her candidates and causes. And she went right on working until the last moment. Only days before her death, she wrote the speech that Mayor Taylor gave at his fundraiser for the coming city campaign season. That speech was an agenda of social programs that Judy had believed in most of her life. Dallas won’t be nearly the same without Judy Bonner Amps.