Economic vision sought in 'Davos in Detroit'

By AFP

July 15, 2010 Updated Jun 14, 2009 at 9:41 PM CDT

A US summit opening Monday aims to "define America's future in the global economy" in a gathering of business and economic leaders billed as "Davos in Detroit."

Organizers of the three-day Michigan gathering argue that the world's biggest economy needs a new vision to maintain leadership and competitiveness, and will seek a consensus among leaders in the corporate, academic, labor and political sectors.

"There have been other conferences and summits but on US soil there has never been anything like this before on the most important subjects on the economy," said Matt Friedman, spokesman for the Detroit Economic Club, which convened the event.

"The closest thing is Davos," he said, referring to the World Economic Forum's annual gathering in the Swiss alpine resort on global economic issues.

Among the 90-plus speakers are chief executives Richard Anderson of Delta Air Lines, Steve Ballmer of Microsoft, Vikram Pandit of Citigroup, Fritz Henderson of General Motors and Alan Mulally of Ford.

For the US government, the line-up includes new chief technology officer Aneesh Chopra and Commerce Secretary Gary Locke.

Although the event is being held in the US industrial heartland and auto center sometimes known as the "Rust Belt," Friedman said that "it's not about Detroit. It's a national event that happens to be held in Detroit."

Tom Dekar, vice chairman at Deloitte LLC -- one of four so-called "knowledge partners" defining the agenda -- said the summit aims to produce a "to-do list" for the American economy.

"This is a great opportunity for people who are significant players in the economy to come together and talk about their visions of the future and the policy implications," Dekar said.

The summit, which may continue as an annual event, grew out of conversations at the Detroit Economic Club about the future of the US economy.

Called in September, the summit has taken on new importance amid a recession that is the worst in decades, costing more than six million US jobs.

Dow Chemical chairman Andrew Liveris, who is a co-chair of this week's summit, had told the club in September that the United States needs better policies to nurture growth in an increasingly competitive global economy.

"Instead of implementing policies that make our industrial heartland stronger, government has made it weaker," Liveris said. "And we've allowed bad economic policies to drive good jobs out of the country."

Summit organizers say the US needs a vision not only for manufacturing, but for energy, technology and the environment.

The summit reflects growing momentum for the United States to formalize an "industrial policy," similar to those used in Asia and elsewhere, to help nurture businesses in a tough global environment.

According to Liveris, "we already have an industrial policy, except, in reality, it's mostly an anti-industrial policy -- a set of contradictory, ill-planned and ultimately self-defeating laws and regulations that are creating havoc at the manufacturing base."

The notion of industrial policy is anaethema to many free-market economists, who say America's strength is derived largely from the laissez-faire, freewheeling environment that lets firms innovate without government interference.

"You don't expect government workers to be as innovative as people from Google or Intel," says Robert Brusca of FAO Economics.

"Why would you put these (government) people in charge of setting an industrial policy?"

Joel Naroff of Naroff Economic Advisors said the role of government in the economy needs to be reassessed in an environment in which the United States can no longer count on being the global leader in every sector.

Naroff said the openness of the US economy "is both a strength and a weakness" and that a careful examination of the role of government is needed.

"Just like everything else in economics, there is no one answer," he said.

He said it is too simplistic to argue that a hands-off approach will cure all economic problems.

US trading partners may complain about measures to aid American firms, but policies in Washington may lead to a healthier global economy, said Naroff.

"We need the rest of the world, especially the Chinese and the developing world, to start buying goods, not just Americans buying goods," he said.

"By forcing other countries to look internally for growth it'll help us and help the rest of the world."

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