USA TODAY US Edition
USA’s global competitive edge gets duller
Harvard study: Ugly presidential race one reason for sluggishness
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.