PPB August 2016

AUGUST 2016 •

PPB

• 59

American

Dragon

town, in every state in this coun-

try, is looking to corral that glam-

orous high-tech company, and it’s

tempting to swing for the fences.

But if state and local govern-

ments really want to help manu-

facturers, they should look for

solid singles and doubles hitters,

regardless of the industry—espe-

cially if that mid-size manufac-

turer has implemented fewer,

faster, finer.

Invest In Education And

Infrastructure

Winter 2015 was particularly

tough in Rhode Island, and one

of its main side effects—pot-

holes—shines a light on the dis-

mal state of our country’s infra-

structure. A 2013 report card on

America’s infrastructure, pre-

pared by the American Society

of Civil Engineers, graded our

bridges at C+, noting that one in

nine of our roadway bridges is

structurally deficient and that the

average age of the over 600,000

bridges in this country is 42

years. Inland waterways, which

carry the equivalent of 51 million

truck trips each year, received a

D- grade due to the generally

poor condition of locks and

channels that need dredging. The

condition of our roads was grad-

ed D, transit systems D, energy

grid D+ and aviation D. Because

the state of our infrastructure has

a direct relationship with our

ability to compete globally, it

must be addressed. Aging infra-

structure is a sure sign that we

have lost our edge as a world

leader.

In a document prepared for

The American Road and

Transportation Builders

Association, James Pinkerton

and Bob Patterson make a com-

pelling case for the past and

future importance of government

funded infrastructure. They take

the reader through the historical

and political figures, from

George Washington to Dwight

D. Eisenhower, who had the

vision and tenacity to ensure that

the U.S. had the world’s best

waterways, railroads and high-

ways. And they take us through

the slow steady decline since the

1970s, linking our deteriorating

infrastructure with the loss of

manufacturing jobs.

Pinkerton and Patterson

[authors of

A Vision of American

Strength: How Infrastructure Built

the United States

] note that “per-

haps the most far-reaching con-

sequence of the collapse of U.S

infrastructure has been the corre-

sponding loss of manufacturing

jobs and the waning of America’s

middle class. When a country

scrimps on infrastructure, or kills

big public projects, it also side-

lines its manufacturing sector.

That overlooked side effect has

weakened America by marginal-

izing the 65 percent of the U.S.

workforce without college

degrees, whose livelihoods, since

the days of Henry Ford, have

largely depended on making

material things.”

Meanwhile, in the American

Society of Civil Engineers

report, the conditions of our

public school facilities received a

D grade. Much has been written

about the “knowledge gap”

between available jobs and the

unemployed, and that gap must

be bridged. But bridging it

begins with a better school envi-

ronment. As a nation, we will

never produce better students

until we provide better school

buildings, better equipment and

a clean, safe environment in

which to learn.

In many respects, develop-

ments in the high technology

sector of our economy have

blinded us to the dangers of our

crumbling infrastructure. Garry

Kasparov and Silicon Valley

investor Peter Thiel, in a 2013

Financial Times

op-ed, wrote

that “we can now use our phones

to send cute kitten photos

around the world or watch

episodes of

The Jetsons

while rid-

ing a century-old subway; we can

programme software to simulate

futuristic landscapes. But the

actual landscape around us is

almost identical to the 1960s.”

Encourage Corporate

Patriotism

In August 2014, the

Walgreens store chain

announced they were going to

complete their purchase of a

smaller European rival and move

their corporate headquarters to

Switzerland in order to take

advantage of the European coun-

try’s lower tax rate. Public reac-

tion, largely fueled by social

media, was swift and vehemently

opposed to the maneuver. Days

after the announcement,

Walgreens reversed course and

decided against the maneuver,

known as a tax inversion.

In a tax inversion deal, a U.S.

company acquires a (usually)

smaller company in another

country with lower tax rates,

“merges” with that company, and

moves its nominal headquarters

to the lower tax country. It’s not

illegal. However, if a U.S. based

company does a tax inversion

deal—which helps them avoid

U.S. taxes—should they still be

considered a U.S. company? Not

in my book. They may still mar-

ket themselves as though they

are a U.S. company, but if your

headquarters isn’t in the U.S.

you’re no longer a U.S. company.

What spiked the social media

uproar was that Walgreens had

traditionally positioned itself as a

“Main Street USA” company, and

would have certainly continued

to do so after the financial

maneuver.

Walgreens’ decision to forego

its tax inversion was, in many

Get your own copy of

American Dragon: Winning

the Global Manufacturing

War Using the Universal

Principles of Fewer, Faster,

and Finer

by Michael

McKeldon Woody at special

member pricing of $15.98 at