Steps Toward a Better Year in 1992
THE GLOBAL ECONOMY
THIS is the time of year when nations, no less than individuals, should take stock of accomplishments and failures and set their sights to the future. What most troubles Americans today is the sorry state of the United States economy. In an increasingly interdependent world, that is reason enough to be concerned about how we manage our global economic affairs.Here are 10 ways that we can do better in 1992. 1. Stop blaming others for our problems. Japan did not cause our recession. We should press Japan to open its markets, but mainly we have to get tough with ourselves. 2. Even better, stop thinking in terms of "them and us." Smart strategies of bargaining and cooperation - not confrontation - work best in promoting economic interests. A prosperous Europe and Japan mean more markets for US products and more jobs for American workers. 3. Stop dithering and get on with basic economic reforms. Shrinking our budget deficit may be difficult, but eventually it is the only way to shrink our trade deficit. We also need to spend more to increase our international competitiveness - by rebuilding our schools, rehabilitating our deteriorated physical infrastructure, and improving our health-care delivery. That means more taxes, not less. 4. Don't get hung up on ideology. The free market is usually the most efficient way to allocate resources and produce goods, but markets are not good at educating the young, caring for the old, building roads, keeping the environment clean, or preventing S&L disasters. Those tasks must fall to governments. 5. Recognize that economics is now the driving force of US foreign policy. Economic strength has become more important than military force. The value of American exports counts more than the throw-weight of our missiles. In the post-cold-war era, the Departments of Commerce and Treasury should often have more to say about international negotiations than State and Defense. 6. Push hard for agreements to liberalize trade. Next year will be decisive for two crucial sets of negotiations: the Uruguay Round of the General Agreement on Trade and Tariffs (GATT), which governs most global commerce, and the North American free-trade agreement (NAFTA), which will ease trade barriers among Canada, Mexico, and the US. Failure to satisfactorily conclude the GATT talks could set the world on a downward spiral of market closing and trade conflicts that would cost every country dearly. Po stponing action on NAFTA endangers our best chance to build a constructive partnership with Mexico and, indeed, with the entire hemisphere. 7. Stop nickel and diming the international financial institutions. These institutions are crucial in mobilizing resources and talent to deal with the world's pressing economic issues. The International Monetary Fund (IMF) needs more money to address debt problems and support economic reform in Eastern Europe, Africa, and Latin America, but the US Congress neglected to appropriate the US contribution in 1991. 8. Get engaged in the struggle for democracy and economic revival in the former Soviet Union and Eastern Europe. The US has an enormous stake in that region's rapid progress toward viable market economies and genuine democratic governments. This may be more important to world peace and security in the 21st century than was NATO and the US nuclear arsenal in the 20th. 9. Stop shirking our responsibilities for the global environment. The most ambitious international meeting on the environment ever will take place in Brazil this June. The meeting, however, may well turn out to be a bust unless the US stops being obstructionist and takes some leadership in developing international accords on climate change and other environmental threats. Washington should also expand its support for family planning and population activities worldwide. 10. Face up to the tragedy of poverty and inequality, both at home and abroad. Middle-class tax cuts may be good politics in this recession-blighted election year - but they threaten to exacerbate the already "savage inequalities" that are undermining this nation's social fabric. Failure to shift US foreign aid from cold-war clients toward the world's neediest populations would be a moral outrage. Sticking with these resolutions will not be easy - particularly as the presidential campaign heats up. None of them is a panacea. But taken together, they would strengthen the American economy, along with that of the rest of the world. They would also infuse US international economic policy with a firmer sense of purpose - and even a small measure of generosity.