Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.
September 6, 2013 at 10:32 AM
Penny for the Commerce Secretary’s thoughts
Commerce Secretary Penny Pritzker was in Seattle Thursday, a stop on a “listening tour” of a dozen cities or so. As an aide put it, she is meeting with “businesses, thought leaders, entrepreneurs, academics and Department of Commerce employees. In these discussions, Secretary Pritzker is hearing about their priorities, concerns and ideas on how the public and private sectors can work together to strengthen the economy and create American jobs.” Among her stops here was the Year Up training program.
In a brief interview, Pritzker was relentlessly on message. “A common theme I hear is the challenge of finding a skilled workforce, or the mismatch between the jobs available and those open. The need for helping people reskill. Second, are the challenges facing business leaders. There’s growing interest in exporting among companies of all sizes. Removing non-tariff trade obstacles” and the passage of the Trans Pacific Partnership and the Transatlantic Trade and Investment Partnership.
Pritzker, in addition to being a major bundler for the president’s campaigns, is a billionaire heiress and founded PSP Capital Partners, the Parking Spot and Pritzker Realty Group. “The president was clear with me: Be a bridge to the business community, bring the business community view to the economic team,” she told me. “There’s a lack of appreciation of how much the president wants businesses to be successful. I have credibility among my compatriots in the CEO community.”
Clyde Prestowitz, the Reagan administration trade negotiator and Commerce veteran, offered this on his blog about a CEO in the position. That experience was “irrelevant” to being Commerce Secretary:
So she/he needs to have a knowledge not so much of how to build companies but what kinds of production and service provision can be done competitively from a U.S. base and of the impact of things like currency rates and the industrial policies of other countries on the productive capability of important sectors of the U.S. economy. She/he has to understand what makes the German, Chinese, Korean, and other economies tick and why their exports are so competitive and find the steps to enable U.S. based industries to respond and compete. She/he has to know something of international trade and competition law and how to use it to enhance the power of U.S. based production.
Of absolutely critical importance is the ability of the secretary of commerce to advocate and argue effectively for structural and sector-oriented policies within the councils of the administration. This is extremely difficult because it means arguing with some of the best PhD economists in the world and convincing them that macroeconomic policies can’t solve all problems. In effect, it means convincing them , or convincing the president over their objections, that they may be wrong. By the same token, it means wheeling and dealing in the Congress to obtain necessary legislation.
The Commerce Department does many important things, from NOAA and the Census to patents and trade. Unfortunately, Commerce Secretaries are minor players on the White House economic team (former Washington Gov. Gary Locke held the post in Mr. Obama’s first term). There hasn’t been a transformative Commerce Secretary since Herbert Hoover drove President Calvin Coolidge crazy with all his progressive, activist ideas. With today’s dismal jobs report, it’s not a good moment for the team.
Pritzker’s talking points may give some insights into the president’s thinking: That unemployment is largely structural (a skills mismatch) rather than because of a huge loss of demand; the continued pursuit of flawed trade deals that don’t address the job-killing trade deficit. I don’t doubt either person’s good will. Both, however, represent an establishment view that isn’t contemplating serious responses to the slow economy and unemployment crisis. Rising inequality, anti-competitive industry consolidation and the neo-protectionism of China and others…well, we don’t talk much about that. And to be fair, the Republican U.S. House is determined to prevent any action that isn’t a tax cut for the wealthy. Nor is there a single “business community.” There are several, often with conflicting agendas.
When I asked Pritzker what kept her up at night, she said, “My biggest worry is how do we make sure we have growing economy that is facilitating good jobs for all Americans.” We can all agree on that.
This Week’s Links:
• Jobs day: Tapering is insane | Slate
• Microsoft is using offshore holdings to fund Nokia acquisition | The Atlantic
• Why Nokia didn’t sell its patents to Microsoft | Reuters
• How Microsoft’s deal might succeed in the long run | MIT Technology Review
• Risk ahoy: Maersk, Daewoo build the world’s largest container vessel | BusinessWeek
Today’s Econ Haiku:
At this rate of growth
Expect low unemployment