USA TODAY US Edition

USA’s global com­pet­i­tive edge gets duller

Har­vard study: Ugly pres­i­den­tial race one rea­son for slug­gish­ness

- Paul David­son @Pdavid­sonusat USA TO­DAY

The U.S. has made vir­tu­ally no progress in a bat­tle to re­claim its elite po­si­tion in the global mar­ket­place, a Har­vard Busi­ness School study says, squarely plac­ing the blame on a bro­ken po­lit­i­cal sys­tem and a coarse pres­i­den­tial cam­paign.

“We be­lieve that the na­tion’s po­lit­i­cal sys­tem has now be­come Amer­ica’s great­est com­pet­i­tive weak­ness, and that the sit­u­a­tion con­tin­ues to de­te­ri­o­rate,” Har­vard pro­fes­sors Michael Porter, Jan Rivkin and Mi­hir De­sai wrote in a re­port ti­tled “Prob­lems Un­solved and a Na­tion Di­vided.” The ero­sion of the na­tion’s abil­ity to com­pete glob­ally is the main rea­son for its slug­gish eco­nomic per­for­mance dur­ing the 7-yearold re­cov­ery, the au­thors say.

This marks the fifth year that the school has as­sessed the USA’s drop-off in com­pet­i­tive­ness com­pared with decades ago but the first time it has sin­gled out the po­lit­i­cal di­vide in Washington as the chief cul­prit.

“The prob­lem now is frankly that we can’t make progress” be­cause of the po­lit­i­cal paral­y­sis, Porter — con­sid­ered the na­tion’s fore­most ex­pert on U.S. com­pet­i­tive­ness — said in an in­ter­view.

The 102-page re­port also cas­ti­gates Repub­li­can pres­i­den­tial can­di­date Don­ald Trump and Demo­crat Hil­lary Clin­ton for widen­ing the po­lit­i­cal chasm.

“The 2016 pres­i­den­tial race has done lit­tle to im­prove the dis­course and shed light on the fu­ture steps we need to em­brace,” the study says.

“In­stead, too of­ten, the can­di­dates cre­ate greater con­fu­sion” and “es­pouse sim­ple, al­most-car­toon­ish slo­gans with­out a real plan of ac­tion.”

For the first time since Har­vard be­gan the study in 2012, the Har­vard alumni sur­veyed were more pes­simistic than they were a year ago. Fifty per­cent of the busi­ness lead­ers ex­pect U.S. com­pet­i­tive­ness to de­cline, up from 42% in 2015; 30% fore­see gains, down from 39%.

The alumni largely reaf­firmed that they sup­port the eight-point plan the Har­vard pro­fes­sors out­lined in 2012 to re­store the na­tion’s lead­ing sta­tus.

Those rec­om­men­da­tions in- clude cut­ting the 39% cor­po­rate tax rate, high­est among ad­vanced economies; mak­ing im­mi­gra­tion to the U.S. eas­ier for highly skilled work­ers; im­prov­ing in­fra­struc­ture; and low­er­ing trade barriers.

Yet the vast ma­jor­ity of alumni sur­veyed be­lieve the po­lit­i­cal sys­tem ob­structs eco­nomic growth and com­pet­i­tive­ness. De­spite agree­ment among Democrats and Repub­li­cans on is­sues such as taxes and in­fra­struc­ture, Con­gress re­mains dead­locked.

On taxes, the par­ties “have wasted more than four years quib­bling over a com­pro­mise num­ber,” the study says.

The re­port also as­sails Repub­li­can anti-trade rhetoric and Demo­cratic anti-busi­ness sen­ti­ment that has made build­ing con­sen­sus tougher. The can­di­dates “have too of­ten ap­pealed to Amer­i­cans’ worst fears,” it says.

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