Congress’ Lost Opportunity Cost

Do you remember or have you seen pictures of the great cars produced in Detroit in the 50’s and 60’s?  These automobiles were things of beauty.  They excited the buyer and delighted the driver.  They also lasted about 3 years and then were destined for the scrap heap.  The quality of these beauties was woeful.

Then came a wake up call.

The Japanese arrived and reintroduced cost/quality to Americans.  The Japanese showed that someone else could produce high quality at low prices.

It took some painful years and mighty boardroom hand wringing before American industry decided to relearn what American quality experts had taught the Japanese in the early 50’s.  Drs Deming and Juran teachings had returned, and slowly American manufacturers accepted quality principles.

So what has that got to do with Congress and lost opportunity costs?

Well, it turns out that quality management techniques are universal and can be learned by anyone, not just the Japanese.  So, if the Japanese could make great cameras, televisions, and cars at hight quality and lower prices, why couldn’t the Taiwanese or Koreans?  There was no reason and the US market gobbled up these great products.

American manufacturers say opportunities for themselves also.  They could design and market their products with jobs based in the US and outsource to a low wage country like China to manufacture them.  Soon all manufacturers saw the same opportunities and even Japanese, Taiwanese, and Koran manufacturers looked for low wage countries and outsourced some of their production.  With quality principles, no consumers could tell where a product was made.

So where does Congress fit in?

We are living today in a global economy where goods and services can be produced at high quality anyplace in the world.  American manufacturers do not need the crutch of tax or tariff advantages.  They need instead better educated and more skilled workers, a sound flexible road network, and well equipped shipping ports.  They need to tools to do business, not tax and tariff crutches that encourage doing the minimum and making the most.

So, Congress needs to move on and get this fiscal cliff issue off the table.  Congress needs to deal with the physical and social infrastructure that will allow free enterprise to blossom again.

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