In the fight for the future,

CEOs are MIA

By Thomas Friedman

[This article was published in The New York Times and The Oregonian, May 26, 2005.]




After six weeks of being a foreign correspondent traveling around America, the biggest question I have come home with is not “What’s the matter with Kansas” but rather, “What is the matter with big business”.

America faces a huge set of challenges if it is going to retain its competitive edge. As a nation, we have a mounting education deficit, energy deficit, budget deficit, health care deficit and ambition deficit. The administration is in denial on this and Congress is off on Mars. And yet, when I look around for the group that has both the power and the interest in seeing America remain globally focused and competitive – America’s business leaders – they seem to be missing in action.

Is there any company in America that should be more involved in lobbying for some form of national health coverage than general Motors, which is being strangled by its health care costs? Is there any group of companies that should have been picketing the White House more than our high-tech firms after the Bush team cut the National Science Foundation budget by $100 million in 2005?

Is there any constituency that should be clamoring for a sane energy policy more than U.S. industry? Should anyone be more concerned about the fiscally reckless deficits we are leaving our children than Wall Street?

Yet, with a few admirable exceptions, American business has not gotten out front on these issues. In part, this is because boardrooms tend to be culturally Republican – both uncomfortable and a little afraid to challenge this administration. In part, this is because of the post-Enron keep-your-head-down effect. And in part, this is because in today’s flatter world, many key U.S. companies now make most of their profits abroad and can recruit the best talent in the world without ever hiring another American.

So with business with its head in the clouds, labor with its head in the sand, the administration focused on terrorism and Congress catering to people who think “intelligent thought” is something done by God and not by Intel, it’s not surprising that “we don’t have a strategy for making American competition in the 21st century – a century of 3 billion new capitalists,” as Clyde Prestowitz put it. He is the author of a smart new book about the rise of China and India, called inappropriately “Three Billion New Capitalists.”

If we don’t get our act together, this will affect not just our economy, but also our power. America has just completed the most sweeping transformation of its national security establishment since 1947. “Unfortunately the entire restructuring been oriented toward combating one threat – terrorism,” said David Rothkopf, a Carnegie Endowment scholar who has just published a timely and important new book “Running the World.”

This is dramatically different from what was done in the wake of World War II, when in addition to creating the NSC, Department of Defense, Air Force and CIA, we also created the United Nations, the IMF, World Bank, conducted the Marshall Plan, rebuilt Japan and recognized that domestic growth was the most important wellspring of our national security.”

That domestic strength made us both feared and attractive. Remember, America won the Cold War not just with containment, but, even more important, with attraction – attraction for the society we were building.

“Undercutting that attraction with fiscal irresponsibility, inattentiveness to the engines of competitiveness on which future jobs will depend, cavalier treatment of the values that make the American way of life more appealing, closing our borders to the world – and thus both losing our edge and our understanding of that world – or focusing exclusively on enemies or the failings of the international community,” Rothkopf added, “is both self-defeating and runs counter to every lesson of how we won the Cold War.”

But who will tell the people? If not the situation room, it better be the boardroom – otherwise the costs to our country will exceed anything that can be measured on a balance sheet.