Gov’t v. MFG: Regulation and political dysfunction threaten growth

By Bart Taylor | Oct 20, 2013

Government’s never been more involved in business. For Jay Timmons, President and CEO of the National Association of Manufacturing (NAM), this development has few upsides.

Timmons spoke in Denver last week at a business luncheon sponsored by CACI, the Colorado Association for Commerce and Industry, and took on much of the political establishment in recounting federal policy-maker’s lousy recent record of supporting manufacturing.

Refreshingly non-partisan in his takedown, Timmons asserted that neither political party is getting it right for business from Washington. Speaking on behalf of his 12,000-member organization, Timmons took aim at:

- The GOP House strategy to control the legislative agenda not through elections but with threats and political maneuvering.

- Bipartisan embrace of a growing regulatory framework, with over “3000 new regulations” foisted on business the past 20 years by both Republican and Democratic administrations.

- Including a “disappointing” raft of proposed regulations that may stifle shale gas development, which Timmons credited for fueling a manufacturing revival and adding as many as four million new energy jobs to the economy in recent years.

- The impact on competitiveness of the regulatory burden, where U.S. manufacturers pay an average of 20% more to make the same product as international competitors.

- The shortcomings of education and occupational training, where 82 percent of U.S. manufacturers have job openings they can’t fill due to a lack of qualified applicants.

Workforce issues are a widespread challenge here, with most firms profiled in CompanyWeek citing a lack of skilled labor as a challenge to growth. Timmons listed certification and immigration reform as policy priorities for NAM, including support of the immigration bill approved by the Senate earlier this year that remains stuck in the House.

It’s hard to miss how conventional wisdom may be changing with regard to long-standing business and political affiliations. NAM’s support of immigration reform including a “path to citizenship” runs counter to majority Republican congressional support. The dust-up over shutting down the government also strained established ties in a very public way.

How is it, asked someone incredulously, that Apple and others could possibly tilt toward the current administration as they did the past election? Timmons reminded the questioner that voters spoke clearly the past election; that the Republican spokesperson was “ineffective”.

A more accurate assessment is that Apple and other emerging powerhouse American brands view their future to be more closely aligned with important customer demo’s than with the political influence of the GOP. A downside may be that the progressive political agenda on the left often translates into a more activist governmental role in the economy -- including an ever-expanding regulatory framework and development bureaucracy.

It’s evident that neither side is capturing the imagination of business, certainly not NAM’s leadership. And for manufacturers in need of regulatory relief, meaningful immigration and education reform, and cost certainty that inspires investors and motivates customers, government and its proxy network can seem more foe than friend at times.