Toward a Postindustrial Politics
Osborne, David
The most important political issue—in peacetime—is always the economy. This basic truth will only intensify over the coming decade, as the United States continues its painful transition from an...
...WINTER • 1988 113...
...In the states, the governors stayed away from ideological debates...
...MMS also contracts with "training associates" at community colleges, who draw up detailed training plans for the firms and help them apply to a small training fund set up by the administration...
...Because the solutions differ from Boston to Detroit, Pittsburgh to Little Rock, these programs should remain at the state level...
...In the shadows of these firms, however, lie nearly ten-thousand manufacturers with twenty or fewer employees, another five-thousand with five-hundred or fewer employees...
...Not every company can do that, but those that can't are often still too risky to get bank loans...
...The Strategic Fund is investing up to two million dollars of equity in each BIDCO, while requiring that private investors come up with at least twice that much...
...The idea is to create an entirely new financial industry in Michigan...
...The easy explanation—that good economic times helped incumbents—is not enough...
...No state has suffered more from the transition to a postindustrial economy...
...The new activism respects the market, but recognizes that markets do not operate freely or perfectly...
...What an irony it would be if, by preoccupation with all these sideshow issues (the gold standard, New Right social issues), we were to let shrewd, competent Democrats come in and steal that birthright of the Republican Party...
...Admittedly, this is relatively easy in a state where per capita income has increased by 75 percent in seven years...
...As a political package, the new approach marries economic activism to fiscal moderation...
...It flows from the bedrock assumption that government must intervene in the workings of the market— correcting flaws, changing rules, and altering the trajectory of private investment...
...If the central question of the past twenty-five years has been how much government should spend—or cut— to solve society's problems, the central question today is how government can change private investment decisions to solve problems...
...its entrepreneurs would have to bring hundreds of new WINTER • 1988 • 107 technologies to market...
...What we are seeing is not centrism, but the emergence of a new political paradigm—a new ideological framework within which the two parties will compete during the postindustrial era...
...106 • DISSENT Every time a government decides to fund research or provide a loan, of course, it must make judgments about which areas show the best potential for success...
...their nonbureaucratic approach to problems...
...the federal role is to make funds available so poorer states can afford them, and to create incentives for states to create them and operate them efficiently...
...Despite the fact that many industrial-policy advocates disliked the notion, the RFC proposal served as a lightning rod for critics, who argued that government could neither predict what would succeed in the marketplace nor keep political considerations out of its investment decisions...
...Democratic Governor James Blanchard was elected in 1982 on a very simple platform: "Jobs, Jobs, Jobs...
...And they have funded labormanagement committees designed to change the adversarial culture of American industry...
...A second piece of Blanchard's strategy inherited from Milliken was a focus on advanced research institutes, to provide seedbeds for new industries...
...The neoliberal label also excludes Republicans such as Thornburgh and Kean, who are clearly on the new paradigm...
...Their aspirations are for greater opportunity, not a redistribution of wealth...
...They understood that to frame the debate as "picking winners" vs...
...They have changed the rules of the marketplace—to create more patient capital, to encourage more loans to new and small businesses, even to encourage investment in worker ownership...
...It is also designed to help Michigan's manufacturers adopt these new technologies and remain competitive...
...There are some disquieting signs," he warns, "that the Republicans will succeed in stealing our clothes while we are in the swimming hole...
...It lies instead in sophisticated new products and services that depend on advanced technologies and educated workers...
...Rather than defining themselves by the size of their spending proposals, for instance, the new Democrats differ over how aggressive government should be in reshaping the marketplace...
...Although we cannot agree on what to call the new era— the "postindustrial economy," the "information age," the "era of human capital" —few deny that the old one is over...
...It lies, in short, in continual and rapid innovation...
...In 1978, Michigan had about $6 million of resident venture capital," explains Ian Bund, one of the pioneers of venture capital in Michigan...
...This would involve a major emphasis on job training, on welfare reform, on housing and community development, and on the development of businesses in poor communities and depressed industrial regions...
...He was far less sure what he was for, particularly in the economic arena...
...But the content will be surprisingly similar...
...But with both agendas, he has built a coalition that takes in virtually every demographic group in the state...
...their independence from the party's "special-interest" groups...
...Making It in Michigan If we want to see a model Democratic program, Michigan provides a far better example...
...asks David Brophy, a professor of finance at the University of Michigan's business school and the state's leading academic authority on venture capital...
...But if Dukakis can do it, imagine what an inspirational candidate—a Cuomo or a Clinton—could do...
...In previous years, a lot of the venture capitalists in the country would fly over Michigan, would never think of looking here for deals...
...By "the manufacturing frontier," The Path to Prosperity's authors meant automation: robots, machine vision systems, laser instruments, CAD/CAM systems, computerized machining centers, flexible manufacturing systems, and the like...
...But part of it goes deeper: policies designed to speed up an economic transition from traditional manufacturing to new technologies are irrelevant to the Jackson constituency, and threatening to the Mondale constituency...
...it requires careful planning...
...In basic, standardized manufacturing, the rest of the world has gradually caught up to—and in many cases surpassed—the United States...
...It could "get out," shifting from manufacturing to services and information industries...
...Michael Dukakis is running for president as the star of this movement, the governor who used innovative new methods to create the "Massachusetts miracle...
...It could "get poor," letting wages fall so as to remain competitive with foreign manufacturers...
...and its government would have to minimize the disruption caused by the transition from brawn to brains...
...Activism and Moderation The economic experiment unfolding in America's state capitols has little to do with the traditional liberal response to hard times, which is to prime the pump and create public-sector jobs...
...But in Michigan, although things were improving, unemployment remained above eight percent...
...To achieve this goal, they explained, the state's manufacturers would have to go through a technological transformation...
...it will provide venture capital for new products and processes developed by established firms...
...This marriage has been extremely successful...
...He should take from the state-level experiments not a specific agenda, but a basic method: intervention in the marketplace, rather than construction of public bureaucracies to spend public money...
...Between 1978 and 1982, Michigan's auto industry eliminated 110,000 jobs, its steel industry 40,000...
...the degree of interaction between local universities and business...
...The progressive movement grew up in response to the transition from an agrarian and small-business economy to an industrial economy...
...With one stroke, this gave Michigan $300 million to invest in venture capital (a sum that has grown to $800 million today)—perhaps the world's largest venture capital fund...
...Most have the same basic goal: to repeat, in new fields, what they believe MIT and Stanford did thirty years ago in computers and semiconductors...
...This is the ground on which American politics will be fought in the 1990s...
...Why is this happening in the states rather than in Washington...
...Few small business people have the time or capital necessary to accomplish this transformation...
...its industries would have to pioneer new labor-management relationships...
...Progressive reforms were designed to ameliorate the problems brought on by rapid industrialization: the explosion of the cities, the exploitation of child labor, the growth of massive corporate trusts...
...They have created new programs to retrain dislocated workers...
...But Blanchard understood that none of the traditional solutions addressed Michigan's fundamental problem: the rapid erosion of its manufacturing base...
...Because ITI charges for its services, most of its clients are large manufacturers...
...Other firms have real growth potential, but lack the zippy technology venture capitalists are fond of...
...But governors and state legislatures have no such luxury...
...By mid-1987, forty-eight banks had agreed to participate...
...I don't think so...
...Practically all the things we've done in the federal government," Franklin Roosevelt once remarked, "are like things Al Smith did as governor of New York...
...That is the real lesson of the state government experience in the 1980s: government does indeed have a role, but the old role models are obsolete...
...This reality has cast up a series of new problems in American life: idle factories, dislocated workers, and ruined manufacturing regions...
...Indeed, the groundwork for much of the New Deal—unemployment compensation, Social Security, large public works projects, deposit insurance, the farm credit system—was laid in the states...
...But the Democrats do face one significant obstacle: the hostility of their traditional have-not constituencies—minorities, the poor, and bluecollar workers—to those who advocate new directions...
...The same thing happened when America entered the industrial era...
...These are Business and Industrial Development Corporations (BIDCOs), private financial institutions that make business loans but do not accept deposits...
...They pointed out that two thirds of the nation's manufacturing assembly operations were located within 300 miles of Detroit, that Michigan already hosted over a third of the nation's major robot users, and that nine of the ten largest robot producers had operations in the state...
...When the new paradigm reaches the national level, the translation will not be direct...
...Some observers have suggested that many of today's governors are simply reruns of Jimmy Carter...
...Because they are capitalized by private investors rather than depositors, BIDCOs can afford to take greater risks than banks...
...and it requires that the work force be retrained to use the new machines...
...The New Deal drew on state programs, but it also focused on a range of national economic problems the states had been powerless to 112 • DISSENT address...
...ITI is a critical link in the state's strategy to target automated manufacturing...
...The 1982 recession did provoke a debate in Washington over new economic strategies, grouped loosely under the label "industrial policy...
...With two deals already sealed, Plastrik envisions perhaps twenty or twenty-five BIDCOs operating around the state...
...But Jimmy Carter lagged behind the more innovative governors of his time as well...
...adversarial relations between labor and management...
...With the auto makers pushing to cut costs and moving toward computer-integrated manufacturing and just-in-time delivery systems, suppliers who also use computerized production processes have a great advantage...
...inadequate supplies of risk capital...
...The Strategic Fund created a similar program to capitalize institutions that fit between venture funds and banks...
...This problem emerged full force in 1984, when deep chasms separated the Hart, Mondale, and Jackson constituencies...
...and institute the more cooperative labormanagement systems needed to get the most out of automated technologies...
...Would it have happened anyway...
...The loans do not have to be repaid until the funds are dissolved...
...Bund and other venture capitalists credit this advance to the intervention of the state pension fund...
...The real question was how government could reshape (or "perfect," to use a term more palatable to conservatives) the market so as to ensure that more American winners emerged in global competition...
...Desperate for solutions, he also embraced some typical Republican strategies: he cut small-business taxes, lowered unemployment taxes for new employees, reformed the state's securities laws to make it easier for companies to issue stock in Michigan, and rewrote a law that had given Michigan the reputation as the toughest state in the country in which to sell a franchise...
...Small businesses also have trouble getting capital because it's too much trouble for the banks So we want to help the private sector create new lending vehicles for small business...
...But when some of the better-known proponents of industrial policy made their central recommendation a new Reconstruction Finance Corporation (RFC), to make large federal investments in targeted industries, the debate got sidetracked by the issue of whether government could effectively "pick winners...
...The easy answer is Ronald Reagan...
...And if it is a better society we want—rather than political vindication —the content is what counts...
...After the initial flurry of activity, he decided to take a closer look at the state economy...
...The past decade has been a period of enormous experimentation, with Democratic governors such as Dukakis of Massachusetts, Celeste of Ohio, Blanchard of Michigan, and Clinton of Arkansas matched almost stride for stride by WINTER • 1988 • 105 Republicans Thornburgh of Pennsylvania, Kean of New Jersey, and On of Indiana...
...This year the Blanchard administration added a marketing function within MMS (to help small firms enter export markets, for instance), and an Educational Services Program to provide workshops for managers, union leaders, and entrepreneurs on subjects such as new technologies, cost-benefit analysis, and so on...
...Plastrik is negotiating with one group of investors to create a BIDCO targeted at turning around mature manufacturing firms, with another to create a minority-owned BIDCO (which will be required to come up with less private capital than other BIDCOs...
...respecting the free market was to profoundly misunderstand the issue...
...Thus once the venture capital problem was solved, there remained a significant gap between venture capital and the banks...
...Other problems are truly national in scope, and thus beyond the reach of state governments...
...Venture capitalists want a 35 percent annual return on their money within four or five years, usually when the company goes public," explains Peter Plastrik, president of the Michigan Strategic Fund...
...These include foreign trade, the international financial system, the future of national industries (whether steel or semiconductors), the nature of our national capital markets, and the quality of our basic research...
...It has even less to do with the traditional conservative approach, in which government purports not to interfere with the workings of the "free market...
...The Strategic Fund has two other new programs, both of which are more traditional public investment operations...
...It began by contracting with a small group of consultants, most of them from the private sector, to help foundation firms install computer-based production technologies...
...While Washington has been locked in a stalemate over budget deficits, they argue, they have spent the last decade adjusting to the realities of the 1980s...
...Dukakis, Clinton, and Blanchard are all acting within the new paradigm, but none could accurately be called a neoliberal...
...At least twenty other states have created similar institutions, many of them with the same name: "Centers of Excellence...
...If the thesis was government as solution and the antithesis was government as problem, we are now witnessing the emergence of a synthesis: government as partner, brokering private-sector solutions without necessarily spending taxpayers' money...
...In the process, some protect the interests of bankers and businesspeople, others put the poor and disadvantaged first...
...This kind of agenda has been a key to Dukakis's political success...
...If traditional liberalism can be described in a nutshell, its defining characteristic would be the impulse to respond to every problem with a new government program that called for increased public spending...
...The result was an increased flow of private venture capital into Michigan...
...By cross-pollinating academic researchers and industry, they hope to spawn dozens of new ideas, new companies, and new approaches by older companies...
...When a Democratic president embraces the new paradigm, we will be far more likely to hear about a "New Partnership" than about "Economic Democracy...
...Many of these reforms first appeared at the state and local level...
...The manufacturing work force as a whole shrank by almost 25 percent...
...These are sound Republican principles...
...These "foundation firms," as Blanchard administration officials call them, form a supply chain that makes it possible for industrial giants such as WINTER • 1988 • 109 GM, Ford, and Chrysler to operate in Michigan...
...A Common Agenda In the search to unite these groups, recent experience suggests that share-the-wealth, antibigbusiness populism is not the answer...
...Venture capital will meet the needs of only a tiny sliver of Michigan's economy, the few start-up firms with technologies that are advanced enough to show promise of dramatic profits...
...they are simply defined by different issues than those of yesterday...
...Skeptics might argue that private venture capitalists would have eventually discovered Michigan on their own...
...Carter was a fiscal moderate who rejected the notion that government bureaucracies could solve all of our problems...
...If you are a U.S...
...Once the election is over and the next recession begins, it will become a national obsession...
...Over the past ten years, state governments have created at least one hundred public development banks and venture capital funds, well over one hundred new programs to stimulate technological innovation, and hundreds of programs to help start-up companies thrive—small business incubators, seed capital funds, and business assistance centers...
...Dukakis has launched some interesting experiments, but, in reality, their quality is quite uneven, and his overall system is not well matched to the state's needs...
...A second Strategic Fund program offers state money to catalyze the formation of private seed funds, which provide very early venture capital...
...and their efficient management of government...
...Bruce Babbitt, the Arizona ex-governor who is running for the Democratic nomination, sees the same threat from the other side...
...Part of the problem is style, and could be overcome by the right candidate...
...But his record is actually far stronger in welfare reform or housing development than in the economic arena...
...In short, they have embraced a range of creative methods to shape the marketplace in ways that stimulate economic growth...
...Soon after he took office, he announced a long list of typical Democratic programs: an infrastructure fund, a huge summer jobs program for youths, a small Conservation Corps for young welfare recipients...
...It offers voters a government that does more without necessarily spending more or creating new bureaucracies...
...During his first term, he focused on financial capital and technology...
...With a boost from state government, they argued, Michigan could become the undisputed home of both the automated "factory of the future" and the hundreds of new companies producing technologies that went into it...
...But this is a far cry from subsidizing a particular product or technology in order to ensure its success in the marketplace...
...Meanwhile his economic development agenda has mollified many of his former critics in the business community...
...One of the big funds even decided to open an office in Michigan, while a second indicated plans to follow suit...
...In Arkansas, Clinton won despite an economy that had slipped back into recession (as much of the farm and manufacturing belt had by 1986), against a Republican candidate who had once defeated him...
...Its fundamental purpose—like that of the Treasury's venture-capital strategy—is not to make public loans and investments, but to change private sector investment patterns...
...Blanchard, Dukakis, and Clinton were all reelected by two-to-one margins, or better...
...Less obvious are the problems that inhibit our ability to innovate: a poorly educated and trained work force...
...Since January, he has turned his attention to "human capital" issues, such as job training, labor-management relations, and welfare reform...
...analyze new product designs to assess their manufacturability...
...Big business in America is no longer viewed as all-powerful...
...They have invested their public pension funds in venture capital, small-business loans, and affordable mortgages...
...Or it could "get smart," using new technologies to position itself back at the manufacturing frontier...
...The voters' antiestablishment sentiments in the 1980s have been aimed at government, not business...
...Those on the left want to actively plan patterns of economic growth, while moderates try simply to eliminate flaws in the marketplace...
...The other is a Minority Business Loan Fund, which has made roughly $1.5 million in investments and provided a free consultant to each of the minority-owned businesses in which it has invested...
...To equate the Democratic governors with neoliberalism is to mistake a paradigm for a popular position within the paradigm...
...These problems cry out for new efforts by government, at all levels...
...The new paradigm does have its left and its right...
...He knew what he was against: Washington, taxes, and bureaucrats...
...But Carter emerged on the national scene so early that he embodied only the negative side of the new politics...
...To see how this can be done—indeed, to see the race for those heights already under way— we need look no further than our state capitols...
...develop and refine their own state-of-the-art equipment...
...Dukakis has had some impact on where growth occurs in Massachusetts, by bringing development to poor communities...
...Most neoliberals do not, for instance, advocate active government intervention in the marketplace with public capital—a central strategy of the Dukakis and Blanchard administrations...
...A related office will offer technical assistance to workerowned firms, or to workers who are attempting to buy their companies...
...For four years running, Michigan had the highest unemployment rates of any state—peaking at over 17 percent...
...its research universities would have to excel in engineering and industrial technology...
...Progressives have been arguing for years that government will only be able to address our economic problems when it learns to intervene in private investment decisions, to change the trajectory of the private marketplace...
...Thanks to two initiatives by his predecessor, moderate Republican William Milliken, he was able to hit the ground running...
...The process is expensive and time-consuming...
...Despite Thornburgh's argument, the Democrats have the advantage, because they believe in government...
...He commissioned a careful study of Michigan's economy by a small group of economists and political scientists...
...it is more often seen as bloodied by foreign competition and in need of all the help it can get...
...Even mildly antibusiness politics in the first Dukakis administration, and again under New Mexico's Toney Anaya from 1983 to 1987, led to rejection by the electorate...
...The Republicans, particularly with Reaganism ascendant, are not so sure...
...Other observers assume that the Democratic governors are simply "neoliberals...
...It was not until Jerry Brown began to talk about "reindustrializing" America and threatened to run for president in 1980 that the Carter administration even addressed the issue of economic competitiveness...
...hence they would not support his economic development agenda...
...When asked to describe what makes them different, they talk about the same things: their public commitment to economic growth...
...When workers in Brazil and South Korea are paid a few dollars a day to make autos and steel, our competitive advantage no longer lies in products that can be manufactured on traditional assembly lines...
...While it built ITI to work with larger firms, the Blanchard administration created the Michigan Modernization Service (MMS) to help foundation firms...
...As each BIDCO becomes successful, the Strategic Fund will sell its stock and back out...
...Rather than attacking big business, the Democrats need to create a second agenda, parallel to their economic competitiveness agenda, designed explicitly to bring the poor and dislocated into the growth process—to create greater opportunity...
...The more fundamental answer is that the initial responses to profound economic changes usually come at the state and local level...
...Today you have Democrats running around the country talking about economic growth and the virtues of the free enterprise systems and the need to balance budgets and reduce deficits," says Thornburgh, the Pennsylvania ex-governor who considered running for the Republican presidential nomination...
...They may be right...
...Dukakis clearly benefited from a booming economy and only token Republican opposition...
...Whichever party comes to grips with them and fashions a new role for government will dominate the next era of American politics...
...These Republicans, like their Democratic counterparts, understand that they are in a race for the political WINTER • 1988 • 111 high ground...
...The first initiative allowed the state's public pension fund to invest five percent of its assets in venture capital...
...The media have generally interpreted the success of Democratic governors in the age of Reagan as a result of more moderate politics...
...ITI boasts a completely computerized model manufacturing facility...
...But although the Blanchards and Clintons and Dukakises have moved right on some issues, they have moved left on others...
...Milliken created two new research institutes, one in advanced manufacturing technologies, the other in biotechnology...
...The most advanced of Michigan's new institutions is the Industrial Technology Institute (ITI), in Ann Arbor...
...But the term "neoliberal" emerged too early, and has been associated too closely with national issues, to capture what is happening at the state level...
...The Michigan Strategic Fund, which Blanchard created to fill those gaps, is probably the most sophisticated public finance agency in the country...
...By mid-1987 the state had invested $290 million—roughly two-thirds of it in those private venture capital funds, one-third in start-up companies...
...It made a big noise, and a lot of people paid attention to it...
...They would make a variety of business loans and investments...
...Finally, Blanchard has budgeted $500,000 for fiscal 1988 to develop a component within MMS that will help labor unions and small manufacturers understand and adopt cooperative labor-management systems...
...There are simply no significant constituencies demanding such policies...
...They realized that the "free market" was a myth, that governments always shape markets by providing the ground rules that allow them to operate...
...This was no accident, just as the wave of state-level innovation today is no accident...
...But Treasury Secretary Robert Bowman, who runs the pension fund, argues that by speeding up the process, state government played a critical role: "I would argue that it's similar to justice: justice delayed is justice denied, and financing delayed, in an internationally competitive market, is a loss for the state of Michigan...
...The state programs have largely been focused on problems that differ widely from one regional economy to another: the nature of local capital markets...
...and corporate institutions that lag behind their foreign competitors in their ability to commercialize research advances, adopt new production technologies, and exploit foreign markets...
...Yet it is far more difficult for the small firm to automate...
...These agents carefully assess the client firm, draw up a fifty to sixty page report recommending a plan of action, and refer them to private-sector consultants if necessary...
...Senator, you can give an ideological response to a serious problem and probably never be held accountable for it...
...Washington has a way of dealing with yesterday's issues," says Blanchard, who served in Congress for eight years...
...Clinton and Blanchard and Dukakis argue that they owe much of their success to a sharp break with the traditional liberalism of their national party, caricatured by Reagan as the 110 • DISSENT politics of "tax and spend, tax and spend...
...Whereas the governors are dealing with the real world—they have to run things, to make them work...
...Presidents and Congresses preside over booming regions as well as depressed regions...
...high rates of illiteracy...
...It is designed to help the Ann Arbor–to–Detroit corridor—already known as Automation Alley—reach critical mass as a national center of machine vision, robotics, and the other elements that go into the factory of the future...
...Battered by the new microelectronic technologies and the global market they have created, the fundamental organization of the American (and international) economy has changed...
...As these developments suggest, Blanchard has changed his focus a bit in his second term, which began in January 1987...
...One is a Product Development Fund, similar to one pioneered by Connecticut...
...Among those who paid attention were prominent venture capitalists on both coasts...
...Without the economic development agenda, he would appear to be a traditional liberal who cared only to redistribute the wealth...
...Though he lacks the inspirational quality we often associate with advocates of the disadvantaged, Dukakis has pleased Massachusetts's labor movement and minority communities by working to create jobs in depressed areas, to train welfare recipients for jobs, and to develop low-income housing...
...This reflects a growing realization, in both the public and private sectors, that our manufacturing problems have less to do with our use of capital and technology than with our use of people...
...Without the emphasis on the poor and dislocated, Dukakis would appear to many voters to have sold out to business...
...Called The Path to Prosperity, it argued that a high-wage manufacturing state such as Michigan had three options...
...In theory, the insurance fund will allow banks to 108 • DISSENT make more loans to new businesses, small businesses, and other firms that would not qualify for a conventional bank loan...
...If a bank will establish such a "Loan Loss Reserve," the state will contribute to it...
...Public Act 55 [which created the state fund] was like bringing a sledgehammer down on a gong...
...Often they would invest in tandem with banks, taking the riskier portion of the loan...
...Though he often gets credit for Massachusetts's explosive growth, even his top economic aides acknowledge that the boom began before his programs were in place, and that it would have continued regardless...
...If Reagan conservatism can be described in a nutshell, its defining characteristic would be the impulse to blame government for every problem and to urge its removal...
...They have set up industrial extension services to help mature manufacturers adopt the new production technologies they need to survive...
...The party which masters that role will command the political heights...
...If Ed King, who defeated Dukakis in 1978 and lost to him in 1982, were still governor, he would be claiming credit for the state's success...
...their fiscal moderation...
...Yet Michigan's banks are not the nation's most venturesome...
...Perhaps the simplest example is the Capital Access Program, which does nothing more than offer banks a carrot to set up insurance funds to cover losses in their riskier portfolios...
...More important, they are concentrating on different issues than those that formerly defined a liberal or a conservative...
...They simply brought together their business, labor, and academic leaders and hammered out pragmatic programs that might work...
...Both parts of this package depend on each other...
...There would be some overlap with state programs, but the next Democratic president should focus primarily on these national problems...
...When unemployment approaches 13 percent, as it did in Massachusetts in 1975, or 18 percent, as it did in Michigan in 1983, politicians have to respond...
...Economic competitiveness may be a new issue in Washington, but it has dominated state politics throughout the 1980s...
...When this happens, the symbolism will not reflect the language of the left...
...They cannot afford to wait for the next recovery, or to evoke the nostrums of free-market theory...
...Economic competitiveness" has already emerged as the leading theme of the 1988 presidential election...
...Blanchard has focused his entire strategy on these five areas...
...Blanchard was lucky...
...By the beginning of 1986, it had in excess of $300 million actually invested and at work...
...Strategies that were advocated only by progressives in the 1970s—particularly those of the Conference on Alternative State and Local Policies—have become mainstream...
...the needs of local manufacturers...
...Dukakis and Blanchard and Clinton talk about public-private partnerships and nonbureaucratic solutions to problems, not about using government's powers to change private investment decisions...
...In all these areas, his administration is working to develop comprehensive new strategies...
...The Strategic Fund took applications from private venture capitalists, chose the four best proposals, and loaned each one twomillion dollars at 9 percent interest to set up a seed fund...
...This basic truth will only intensify over the coming decade, as the United States continues its painful transition from an industrial economy built on assembly-line manufacturing in large, stable firms, to a rapidly changing, knowledgebased economy built upon technological innovation...
...In similar fashion, a new national agenda would not replicate successful state programs as much as it would use the same approaches to tackle national problems...
...Its research staff helps businesses adopt and adapt automated manufacturing equipment...
...Rather than targeting specific products or technologies, the governors have largely targeted processes: technological innovation, capital formation, new business formation, the commercialization of research, and the adoption of new manufacturing technologies...
...When venture capitalists came to Michigan to solicit investments by the pension fund, Treasury officials showed them promising deals in the state...
Vol. 35 • January 1988 • No. 1
