Retrenching into silos is the exact opposite of what is needed

With the advent of more terrorists’ activities around the globe and the significant refugee crisis, nationalistic and jingoistic behaviors have taken more solid footing. With the backlash in some European countries, the Brexit vote and the rise of Donald Trump as an unlikely candidate for US President, show that protectionism is selling these days as a concept. These folks want to build actual and proverbial walls, rather than bridges.

Yet, that is precisely the wrong behavior needed. These so-called leaders feel if we segregate and retrench into our own little worlds, this cocooning will make everything better. What these so-called leaders fail to tell you is the significant benefits with being aligned, working together and doing commerce with each other. Economic trade breaks down barriers, as countries do not want to upset the financing of their economy and will work past governing differences.

President Abraham Lincoln did not coin this phrase, but he capitalized on it – keep your friends close, but keep your enemies closer.  Lincoln added several adversaries to his cabinet when elected. His view was if he could keep tabs on his opposition and argue with them, he could keep a lid on dissent at a time when dissent was in vogue. President Teddy Roosevelt was very open with reporters, in part because of his ego, but in large part to have the reporters be his eyes and ears. He would have them go speak with his department heads to learn what was going on.

Commerce breaks down barriers. Not only will we make more money by co-existing, we will be safer in turn. That is a concern of the Brexit vote, as the UK being a part of the EU makes the world safer and aids the economy of both entities. Like the UK, there is much to be gained in the US with the global economy, especially with companies who employ people here. Just here in Carolinas, there are multiple hundreds, if not thousands, of foreign companies who have US presences here, be it a North American headquarters or a major plant. BMW, Mitsubishi, Michelin, Doosan and Husqvarna come to mind.

We should not lose sight of breaking down barriers abroad. I have been a staunch supporter of doing trade with Cuba and Iran. The countries want to do business with us and we are well positioned to leverage that travel and trade. Just with Cuba and its 11 million people, it will be like adding a 51st state to our US economy. With Iran, of course, we need to keep our eyes open, but the median age of Iranis is age 35. We have a chance to create new economic paradigm with Iran which will live beyond the older regime. Plus, being closer to Iran will allow us to keep more tabs. This is the  best example of what Lincoln did.

The candidates who have touted building walls and retrenching are not being very open with the whole picture. They are using fear and an incomplete picture of reality. Companies have always chased cheap labor and as one CFO said in the book “The Rich and the Rest of Us,” if companies could get by with hiring no employees, they would. The greater threat is technology improvements as a new plant is not going to have 3,000 employees, it will have 300. On the flip side, Nissan in Tennessee and Mercedes in Alabama employ a great many American workers, which is not talked about enough as a benefit of globalization.

If we retrench, we will be reducing markets for goods and services. A venture capitalist once said what creates jobs is not owners, but customers. The fewer the customers, the fewer the jobs. But, with that said, there are elements of truth that workers need to ask more of the employers who have suppressed wages and let people go, to hire younger and cheaper workers. Companies are quick to hire cheaper, but need to be reminded that we employees are important and customers, as well.

I am reminded that two of the top three jobs creation Presidents had two things in common. Bill Clinton, the number one job creator at 22.8 million jobs, and Ronald Reagan, the number three job creator at 16.1 million, were both collaborators and advocated global trade, as reported in “The World is Curved” by David Smick, who was an economic advisor to both. Creating markets for trade and opening up our markets to others, in my view, is one of the best things a President can do.

Globalization is extremely important, but we need to manage it better. Throwing the baby out with the bathwater is something we must guard against. So-called leaders who are advocating this very thing need to be asked more questions. As they are not telling you the whole story.

 

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10 thoughts on “Retrenching into silos is the exact opposite of what is needed

  1. I fear that with automation – even more than because of cheap overseas labor – future unemployment will be astronomical. Our economic system isn’t set up for this new reality. It is frightening that no one in a position to address it is talking about it.

    • Janis, you are not alone in this fear. Computers can write poetry now. It may be formulaic, but it is being done. I know that is not manufacturing, but it illustrates what the future holds. A company can hire a functional trainable robotic device for $20k. So, we must retrain folks to work with these devices and learn new skills. Keith

  2. Well said. Isolationism is the word of the day. Fear drives it, clearly. But as the world becomes more heavily populated and tensions increase I suspect that countries will continue to turn into themselves (just as we have ourselves in large measure) and power will devolve to the very few while the rest of us try to muddle through.

    • Hugh, I agree. It is not dissimilar to churches that practice exclusionary policies and eventually find themselves in need of parishioners. I am hoping that those many diverse voices vote in the election. The exclusionary folks count on a low turnout. Thanks, Keith

      • I do sometimes wonder if democracy is too heavy a burden for a great many people who would just as soon have someone else make the decisions and take the risks for them.

      • Hugh, it does require more work than we are up for. Nixon knew when he lost Walter Cronkite’s voice on Vietnam, it was time to get out. Cronkite’s opinion mattered. Now, we have to discount many news sources, especially those aligned with one party, as not shooting straight. The sad part is the people who watch those sources don’t recognize they are seeing spin-doctored news at best.

        It will only get worse as we write news for Twitter and use emoticons. Keith

  3. Note to Readers: I am saddened by the additional loss of life in Baton Rouge. Like in Dallas, violence is not the answer and will only beget more violence. We must guard against people wanting to retrench into subdivisions. We must come together as Americans. Do not let people drag you into an abyss and let’s seek greater dialogue not less.

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