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July 1, 2009

UNDERSTANDING, PERSPECTIVE AND CARE

“Don’t throw the baby out with the bathwater.”
—Thomas Murner, Die Narrenbeschwörung (1512)

What does it take to restore health—complete, total, sustaining health—to the North American manufacturing environment?

Certainly, we need a thriving global economy, active credit markets and the kind of confidence that helped to power the boom years of 2004 through 2008. But as I survey the manufacturing, metals and policy environments today, the missing yet crucial prerequisites for long-term economic health are understanding, perspective and care.

By understanding, I mean a shared sense of insight among business leaders and policymakers about what it takes to build and sustain the world’s largest economy. It certainly isn’t socialism or government control of our economic lives. The Iron Curtain’s fall demonstrated, in shattering terms, how bankrupt collectivist economic philosophies really are. Or so I thought, until the latest crop of politicians in Washington started tearing into things.

By perspective, I mean calm and reasoned acknowledgement that booms are followed by busts, which in turn are followed by new good times. One of the goals of modern business management has been to seek stability through the business cycle to reduce risk and level the peaks and troughs of market change. We in business certainly don’t advocate recessions, but unlike politicians, whose worldview usually seems limited to the date of the next election, we expect cycles and plan for them.

Finally, by care I mean acting with a sense of prudence and restraint so that we don’t ruin those things that are good about our economic system while we are trying to fix it. As we’ve said many times in this space, there is no condoning bad, illegal and wrongheaded behavior by businesses. And, unlike those in Washington, we believe that one of the best cures for bad dealing is business failure. If there are no meaningful consequences for damaging mistakes, then there is no accountability and no ethical code to help guide our way. Washington’s “fixes,” which have come at a breathtaking pace, are in fact huge risks that bet our long-term future on the short-term perspective and desires of a relatively few, rather radical, political theorists.

As business people, we test theories before we bet the company on them. Too many people, communities and relationships depend on us to exercise understanding, perspective and care in what we do. When an idea is proven wrong, we don’t adopt it. When a good idea runs into bad trouble, we don’t immediately junk it, but we seek to understand what went wrong. We act like our very livelihoods depend upon it, because they do.

We are in feeding season in Washington these days, with major struggles ahead of us on card check, LIFO accounting, taxes, trade, currency, health care and more. There seem to be no limits to how far Congress and the administration will go, how much money they will spend, how great the debt they will incur or how many sound principles of economic health they will violate. That’s not a Republican sentiment or a Democratic one. It is a responsible business sentiment.

So once again, I encourage every business leader to step up and make his or her voice heard. Thomas Murner’s warning, in his satire of 1512 about going too far, is as true today as it was then. Let’s not let it happen.