Nearly every U.S. industry, it seems, is pressing the federal government for help to weather the current economic storm. Therefore, lawmakers must decide which U.S. industries remain vital to the long-term health and prosperity of the American economy.
The political process by which policy makers determine how to proceed was recalibrated during the recent high-stakes debate over rescuing American automakers. The inept leaders of the Big Three (also known as the "Detroit Three") car makers initially presented an Edsel-like case for a government bailout during their first lap around the political track. Once it was determined that it might be impolitic to travel to Washington by private jet, the auto executives offered a plan that included union concessions that at least served as a starting point for fixing what ails GM, Ford and Chrysler.
In exchange for federal help, GM ought to be made to dump its clueless senior management, starting with the disastrous Rick Wagoner. The addiction of Wagoner's GM to big profit margins on gas hogs steered the company into the mess it faces today, for which taxpayers will again be made to pay. Congress needs to demand at least as good a deal as Warren Buffett would receive in exchange for a cash lifeline. Then GM and the others can begin again to build cars that energy-conscious consumers want to buy.
Now that autos and the financial services have collected a lot of taxpayer dollars, it is time for Congress and the incoming Obama administration to consider the demands of the struggling U.S. high-technology sector. Industry captains based in Silicon Valley are launching their own year-end offensive to get the attention of lawmakers and the Obama transition team. The effort comes as a huge new economic stimulus package is being hammered out.
While Silicon Valley executives, some of whom profess to be free-market zealots, will no doubt float their own list of investment priorities, here's what we believe the Obama administration and Congress should focus on in order to restore U.S. technology innovation and global leadership:
1. If Washington must continue to borrow from the rest of the world, let's commit those funds to programs that will yield the highest return on the investment. The place to start is basic R&D programs that will serve as the foundation for the next generation of disruptive technologies. Cash-strapped tech companies can no longer afford to fund basic R&D. Government has to pick up the slack.
2. Rebuild U.S. engineering and science education from the ground up by placing greater emphasis on math, science and writing skills. Start by providing scholarships and low-interest loans to those who teach these subjects.