Cuomo Points Way Toward a National Industrial Plan

Just before Congress adjourned for the Christmas holidays last week, it passed a little-noticed law creating yet another commission that will be financed with just $1 million--hardly enough to pay staff salaries and buy lunches for the 12 as yet unnamed commission members.

But if things go well, the new National Economic Commission set up by Congress certainly should help put this country on a less confrontational course in setting national economic policies.

There is widespread agreement these days that workers and corporations alike fare better when they drop their traditional roles as adversaries and instead adopt a labor-management relationship that promotes cooperation and gives workers and their unions a voice in corporate decision making.

Cooperation, though, is hardly the word to describe the way this country makes decisions about national economic policies.

Obviously, something better is needed than those sometimes ugly, often unproductive confrontations among the nation’s political and economic powers as they struggle to cope with the damaging federal debt of more than $2.35 trillion, an annual trade deficit of nearly $160 billion and the impact of Wall Street’s Black Monday.

New York’s Gov. Mario M. Cuomo is among many who believe that cooperation is an intelligent approach to labor-management relations and that it also makes sense in government policy making too.

Since there are such powerful adversarial forces battling one another on the national level, true cooperation between them may be impossible. But it is an admirable goal that should at least be pursued.

At Cuomo’s request, Sen. Daniel Patrick Moynihan (D-N.Y.) introduced the bill creating the national commission, which will begin work in March.

Its 12 members--representing government, industry, labor and academia--will be appointed by the President and the majority and minority leaders of the House and Senate. The commission’s proposals are not due until after the 1988 presidential elections.

But Cuomo could set an example in his state. He has formed the New York State Industrial Cooperation Council to get a cross section of the state’s leaders to deal with everything from the impact of foreign trade on New York to the handling and prevention of plant closings.

The New York council is already off and walking, if not running, and it is led by some power-wielding leaders including investment banker Felix G. Rohatyn, economist Lester C. Thurow, Harvard Law School Prof. Paul Weir, Morgan Guaranty Trust Co. Chairman Lewis Preston, Allegheny Ludlum Corp. Chairman Richard P. Simmons, and such union leaders as Amalgamated Clothing and Textile Workers President Jack Sheinkman, Service Employees International Union President John Sweeney and Lynn Williams, president of the United Steelworkers of America.

Cuomo proposed the New York council and he pressed for creation of the National Economic Commission before he took himself out of the 1988 presidential race. But both ideas could help him if he ends up in next year’s race after all, or if he tries for the White House later on.

The items on the agenda of the New York council are not all fresh ideas, but the basic concept of cooperation among political and economic powers ought to inspire the national commission to do likewise.

The national commission also should look at some of the other things that the New York council is doing, such as preparing a plan to put some of the state’s $80 billion in public employee pension fund reserves into job-creating investments.

It also made a “New York Compact” that includes promises from thousands of companies to give workers advance notice of plant closings, and the state will help extend health insurance benefits for four months to workers who lose jobs in such shutdowns.

The state council is helping to develop employee ownership of companies and is stimulating worker participation programs in both the private sector and government.

The council is not limited to studying New York issues. It is trying to develop ways to deal with national issues ranging from the trade and budget deficits to declining American competitiveness.

The idea of government, management and labor cooperation to solve problems has been used before, sometimes successfully.

Close tripartite cooperation at the national level has had considerable success in Japan, West Germany and some other industrialized countries.

And the controversial, but valuable, notion of a tripartite “national industrial policy” to revitalize smokestack industries was a significant issue in the early days of Walter F. Mondale’s 1984 presidential campaign.

Critics Sense Socialism

However, conservatives smothered the industrial policy plan, which would have, among other things, created a federal development bank to assist valuable but financially troubled industries.

Industrial policy also would introduce the tripartite system into at least some critical decisions that are now made by a few corporate executives who guide the giant companies that profoundly affect the entire country.

The critics said it all smacked of socialism and was the antithesis of a free-market economy.

There was considerable government-labor-industry cooperation at the national level beginning in the Great Depression of the 1930s with the New Deal of President Franklin D. Roosevelt, and the cooperation increased during World War II.

But then the concept faded for the most part until President Jimmy Carter tried to revive it in a vain attempt to fight the twin evils of rampant inflation and unemployment.

Carter first created a tripartite Wage Policy Board seeking voluntary restraints on wages and prices. He went further in 1979. Carter, AFL-CIO President Lane Kirkland and other union leaders reached a historic national accord that gave organized labor a key role in deciding the Administration’s economy policies. But the accord did not include industry leaders, which brought protests from them.

Carter’s effort to get tripartite cooperation on at least some of the government’s economic policy decisions came late in his Administration and it all ended in 1980, with the election of President Reagan, an ardent free-market advocate.

Perhaps even before Reagan’s successor takes office, the new National Economic Commission will have proposed a broad plan for tripartite cooperation in formulating crucial policy decisions. And while Reagan will almost surely see little merit in it, the next president could make it a reality, as seems to be happening in New York, at least on a limited scale.