Last week at a news conference, President Obama said, "The private sector is doing fine," which caused an immediate attack by Republicans.
The president’s speech centered on the economy’s problems in two areas: state and local government employment, and the construction industry. Obama noted that he has proposed legislation to help state and local governments retain and rehire teachers and police officers, and fund infrastructure projects that would provide jobs for construction workers.
“If Republicans want to be helpful, if they really want to move forward and put people back to work, what they should be thinking about is how do we help state and local governments, and how do we help the construction industry,” he said.
The Republicans cannot get past, nor do they want to, the statement about the private sector, which when examined makes sense in terms of their agenda. They completely ignored the fact that state and local governments are suffering economically which puts pressure on all economic and social services, whether state or federally provided, including the issuance of unemployment, which is a federal-state funded program. But then the Republican Party agenda represents primarily the private sector including corporations and large businesses to ensure their control by keeping tax cuts, loopholes and special benefits to American off shore companies choosing the low wages of foreign countries, instead of remaining in the U.S..
The middle class is not included in their trickle-down economics grand scheme. Corporations thrive in an economy that keeps Americans underemployed by providing an array of low paying jobs with no union representation and health care costs that take one third of their income.
Compared to the middle class, yes, the private sector for the most part is doing fine if they follow a best practices model. Unlike businesses that have some of the best economic minds in America planning their futures, the American people rely on the federal government to ensure their needs are protected and given assistance when appropriate.
The CEO of Abbot Laboratories gives some examples of how businesses rise and fall in any economy and how the survivors are able to project trends and make necessary adjustments in their business plan.
According to Miles D. White of Abbot there are two key requirements: an ability to maintain an unrelenting focus on the future and a determination to make difficult, sometimes transformational changes.
At too many companies there’s little thought given to the next quarter century in the rush to meet the demands of the next quarter. Companies need to have a strong focus on anticipating change, at both the macroeconomic and industry-specific levels. This leads to some critical questions: How do you best position yourself to confront changes in markets, demographics, products, and technologies? What are the best investments to make now in preparation for those changes? One of the elements of successful long-term planning is understanding which changes in the business environment are fundamental, and which are just short-term storms to be weathered?
Fujifilm, for example, saw that digital photography would one day make traditional film obsolete. It made early investments in digital, developed new business lines, and has succeeded in the face of disruptive change to its core business. Apple, originally a maker of personal computers, didn’t hesitate to bring us the iPad, a computing format that may cannibalize its original business.
Its focus is on winning the future, not protecting its past. Disney has continually redefined itself, broadening its scope in the process, seeing itself as a provider of entertainment, not merely a maker of cartoons, its original business. This approach has allowed it to continually reinvent itself.
If America is going to “win the future,” and make the “transformational changes” to support the broad spectrum of employment needs, it must begin with local and state governments in anticipation of what the future holds, not unlike the forecasting that prompted Fufifilm, Apple and Disney to make adjustments to protect their interests. Increases in local and state employment infuse America with growth and prosperity that spreads out over the entire country.
The next president needs to be able to say, “The middle class is doing fine.” And until that happens, yes, the private sector will be doing fine.
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