Who does Joe Arvin think he is, telling Congress what`s wrong with the U.S. economy?
How dare this schmo, this no-name operator of a medium-size gear plant in Chicago`s western suburbs? How dare he print up 3,000 copies of an essay that nobody asked for, titled ”Our Economic Crisis,” and mail them to the White House, to members of the House and Senate and to all 50 state governors?
Who does this guy think he is? Some kind of official government adviser?
An Alan Greenspan or a Michael Boskin?
We should be so lucky.
Joseph L. Arvin is first and foremost a gear man. He got started in the industry at age 17, sweeping floors. Now Arvin is president of an outfit called Arrow Gear Co. in Downers Grove. Arrow makes precision gears for the aviation, automotive and power-tool industries. They bill about $30 million a year.
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But like a lot of manufacturers, Arrow is in decline. It recently had to let go 60 of its 230 employees, and Joe Arvin sees more layoffs ahead. The domestic gear industry is in trouble, he said.
The recession has hurt, but the longer-term problem has to do with foreign competition. For various reasons, the Japanese and Germans have invested more in their plants and equipment. They`re turning out high-quality gears at lower prices.
For several years, Joe Arvin has watched his industry and other sectors of U.S. manufacturing lose their edge. He watched in the `80s as American investors poured money into high-yield junk bonds, which financed corporate takeovers. He watched as precious capital flowed into shopping malls and office towers. And he watched as the Japanese socked their savings into new industrial plants and the latest technology.
Then the recession hit, and like a lot of us, Joe Arvin began listening to the competing recovery programs put forward by the Bush administration and the Democrats. Bush vows an all-out fight to lower the capital gains tax. The Democrats, including some on the presidential stump, promise to rescue the
”middle class” with tax breaks worth a dollar-a-day or more.
But to Joe Arvin, the gear man, those solutions are bunk.
”If the government doesn`t take steps to attract entrepreneurial investment in manufacturing,” Arvin said, ”there will be no additional jobs, no substantial growth, no sustained recovery of the U.S. economy.”
But who cares what Joe Arvin thinks?
Hardly anybody, until a few months ago. That`s when a frustrated Arvin passed the hat among other small to medium-size gear companies (the Chicago area is the center of the industry) and raised $10,000 to print their own platform for economic recovery.
You see a lot of writing on this topic, from stuffed-shirt editorials in journals such as Forbes magazine to position papers by groups such as the Council on Competitiveness. Not many authors make as much sense as Joe Arvin. Here are some of his recommendations:
– Instead of new tax breaks for consumers or stock market players, confer incentives directly on manufacturers by enacting investment tax credits and allowing faster tax writeoffs on new plant and equipment.
– Set aside the outdated taboo against government cooperation with manufacturers. Take a lesson from Japan Inc., where government works hand-in- glove with business developing new technologies, aiming investment at the most promising areas and training the work force.
– Curb the use of foreign components in defense weapons systems and require government purchasing agents to ”buy American” when it comes to certain ”necessary domestic industries” such as machine tools.
– Speed the transfer of new technologies from university and government laboratories to manufacturers. Slow the flow of U.S.-developed technology to foreign manufacturers.
– Reform product liability laws and procedures by capping damage awards and making plaintiffs pay the cost of frivolous lawsuits. The current system has all but wiped out America`s small airplane industry. Others are on the brink.
– End state subsidies to attract foreign-owned assembly plants; and insist, as other countries do, that these ”transplants” buy most of their components locally.
– Move beyond American management`s short-term, quarter-to-quarter fixation with regard to profitability, investment return and strategic planning for growth.
”Our nation is facing a crisis of monumental proportions which is nearly out of control,” Arvin concludes. ”Our only hope for avoiding an economic catastrophe is the swift action of our government while there is still time.” So there you have it, the view from Downers Grove, the advice nobody sought.
You can get a copy of Arvin`s essay by writing his printer: Crystal Image Productions Inc., 5240 S. Belmont Rd., Downers Grove, Ill. 60515. Enclose $1 to cover costs.
His 16-page booklet might come in handy for evaluating the tax breaks being written by the House Ways and Means Committee or for grading promises made by presidential candidates.
But you should resist temptation to write in Joe Arvin`s name on the primary ballot. After all, he`s only a gear man.