Washington as Mary Poppins: the role's changing
Washington's role as an economic nanny is changing. The Reagan administration believes business shouldn't hide from marauding imports behind government's skirts. Likewise, consumers shouldn't count on so much protection from built-in safety factors such as labeling requirements. Having someone to run to is all well and good, the White House says, but in the long run you'll have more by learning to fend for yourself.Skip to next paragraph
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But where's the line between coddling and caring? How much help can the government afford? Those questions lie behind almost every argument about economic policy in Washington today, from deficit squabbles to regulatory dust-ups. To answer them, it's necessary to hang a dollar value on risk. That's hard - a little bit like pricing a sunset.
Several little government-as-nanny issues surfaced on Capitol Hill the other day. They're relatively small now, but they will probably grow. And they show how difficult it is for any administration to convert ideology into law. Leaky import shelter for Detroit
Sen. John C. Danforth (R) of Missouri asks the official about the Japanese auto import restrictions. Were they working?
''It appears, overall, that they haven't worked out too well,'' admits David R. Macdonald, deputy US trade representative.
Eight TV cameras swing back and forth, senator to witness, as if they are watching a tennis match. The press table is full of foreign journalists. Next to me, a Japanese reporter from NHK radio flashes a tape recorder with a rising-sun sticker.
President Reagan didn't really want the restrictions in the first place; they aren't exactly a shining example of free trade. But his hand was forced by Congress, which threatened to legislate the same thing. Mr. Danforth (who drives a Mercedes) introduced one of the bills. He was ''not willing'' to do it, he says. Who made him? The American public, apparently.
''The American people can put up with this only so long,'' says Sen. Charles E. Grassley of Iowa. ''Then there's going to be retaliation. That's what we want to avoid.''
Technically speaking, the restrictions are working very well. The Japanese are not exceeding their first-year limit of 1,680,000 units. But those limits were set when the total auto market was expected to be 10 million units. In fact , US auto dealers will move closer to 8.5 million cars. So foreign cars will have about the same share of the US market this year: 26.5 percent.
The government's attempt to shelter the domestic auto industry, it turns out, was directed only toward the import problem. But weakness in the economy, consumer price resistance, failure to modernize: These auto industry problems made the import restrictions less effective. The hearing witnesses (Ambassador MacDonald and a pair of Commerce Department officials) say as much in their testimony. But they are not gathered before this gaggle of senators to criticize Detroit. Rather, they skip right on to more international finger-pointing.
The auto trade situation is ''symptomatic'' of a larger problem, says Lionel Olmer, Commerce undersecretary for international trade. That problem is ''the enormous US trade imbalance with Japan, which this year will exceed $15 billion, and unless present trends are changed could reach as high as $50 billion by 1990 .''