High-tech report urges government to pitch in

November 14, 1991|By Knight-Ridder News Service

WASHINGTON -- The United States' high-tech manufacturers are continuing to fall behind their global competitors -- especially the Japanese -- and they will drag living standards here down with them unless the government does more to help.

That is the message from a 375-page study released yesterday by the Office of Technology Assessment, a respected, non-partisan agency of Congress.

The report gives Democrats an impressive non-partisan authority to cite when charging economic mismanagement by President Bush during the coming election year. Four leading Democratic senators wasted no time in seizing that opportunity.

"A week ago yesterday, Pennsylvania voters sent Washington a wake-up call. Today we release a report which confirms that economic policy-makers have, indeed, been asleep at the switch," Sen. Lloyd Bentsen, D-Texas, said at a press conference.

His reference was to the upset defeat of former Attorney General Richard Thornburgh for a U.S. Senate seat.

The senators attacked Japan even more than the Bush administration, sounding another theme Democrats are expected to emphasize through 1992 -- and one the OTA report validates.

Japan "is clearly a predatory trading partner that has one set of rules at home and another set of rules abroad," Sen. Donald W. Riegle Jr., D-Mich., said.

"The OTA report very clearly and convincingly demonstrates that if we play by our rules only and they play by theirs, we're going to lose," said Sen. Max Baucus, D-Mont., head of a key Senate Trade subcommittee.

Indeed, the OTA report's opening sentences read: "U.S. manufacturing is falling behind the competition. The standard of comparison is Japan. . . ." That theme echoes throughout the report, which concludes: "If there are no major changes in government policies . . . we expect U.S. manufacturing competitiveness to continue to sink, compared with Japan."

That means Japanese living standards are likely to continue their postwar rise, while U.S. living standards will continue to stagnate and decline, the OTA report said.

Essentially, the report contends that Japan's state-directed capitalism works better than does the United States' more purist free-market approach. Japan's government shelters key industries from cutthroat competition and often subsidizes their costs, while the United States does not.

European countries, South Korea and Taiwan are following strategies similar to Japan's, the report emphasizes. All employ comprehensive government strategies to help "critical commercial industries" whose technological advances are most likely to lift their entire economies and living standards. Such critical industries include electronic components, computers, software, communications equipment, precision machining, robotics, aerospace and biotechnology, the OTA report said.

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