CAUSE FOR ALARM
To The Editor:
Edwin J. Feulner’s column, “GOP Wake-Up Call” (CE: June 1993), is outstanding. We must awaken Republicans to the terrible situation in today’s GOP. Three years have passed with little or no action by the Republican Party to repair our economy. As Feulner points out, when President Clinton asked the Republicans to “put up or shut up,” The Heritage Foundation was standing in the wings with a specific plan for cutting $609 billion worth of waste and inefficiency from the federal budget. Did the minority leadership take this ball and run with it? It certainly could and should have. There is no excuse for this lapse.
The minority leadership’s job is to expose the administration’s tax-and-spend policies for what they are. Feulner’s questions, “Is America’s memory so short that we have forgotten the double-digit inflation, stratospheric interest rates, and dismal economic malaise Reagan inherited in 1980? And have we forgotten Reagan’s tax cut (against all advice from the most ‘eminent’ halls of academe) and its result: the longest peacetime economic expansion in U.S. history and the creation of 21.5 million new jobs?” are right on the money.
The media made a huge issue out of the fact that when Reagan left office, the deficit was higher than when he came in. What they failed to notice was that, as a percentage of gross domestic product, the deficit had fallen from 6.3 percent in 1980 to 3.0 percent in 1989. This was the result of both economic growth and the Gramm-Rudman-Hollings Budget Control Act, which at least slowed the pace of Congress’ spending spree, the real cause of the deficit.
Let’s look at the real problem that is killing our economy: the current level of capital gains taxation. This ridiculous situation discourages capital formation, impedes job creation, and hinders U.S. international competitiveness by raising the cost of capital relative to our competitors. At a time when most of the industrialized world has minimal or no taxes on capital gains, America cannot continue to pursue foolhardy economic policies.
I have spent six years as a member of the Board of the U.S. Chamber of Commerce in Washington. During this time, the chamber had a permanent committee that studied capital gains taxation. It found that we reduced capital gains taxes in America three times between 1960 and the early 1980s. Each time we did, the government came into a bushel of money, and the economy skyrocketed. Too bad we didn’t push this program during the Bush Administration for at least three years. Our economy would have prospered, and we would not be mired in this increasingly troublesome situation.
It appears to me that our politicians are afraid to delve into this issue because of all the remarks made at the end of Reagan’s term about taking care of the rich. Now they are afraid that if they start moving toward capital gains reduction, they will be blamed for taking care of the rich. However, the U.S. economy depends on investments, and investments have to come from what people earn in business and in the stock market. Obviously, the American public and politicians fail to understand this basic fact about our economic system.
John E. Healy II
The Healy Group
New Castle, DE
BURNISHING THE BALDRIGE
To The Editor:
Christopher L. Hart’s article, “What’s Wrong-And Right-With The Baldrige Awards” (CE: November/December 1993), is refreshingly straightforward and objective. Total quality management has been criticized as a fad and the Baldrige Award as just another CEO trophy. However, critics repeatedly overlook the value of auditing your company’s performance against the quality standards set in the Baldrige Award criteria. Can a company go wrong by improving its quality, keeping a customer focus, and continually striving to improve? The answer obviously is no.
The Baldrige criteria objectively inform a company of whether or not it is as good as it thinks it is. During a year-long study of the Human Resource practices of the Baldrige winners, we repeatedly heard the winners say: “We found out a lot about ourselves when we filled out the Baldrige Award application. We are not as good as we thought we were.” Several of the companies applied for the award more than once before winning. Each time they applied for the award, the examiners’ feedback helped them make invaluable improvements.
Our study showed that the quality criteria are helpful for the more traditional manufacturing areas and also for the soft functional areas such as Human Resources. This area often is viewed (and rightly so) as a weak function that does not add true value to the company’s success. When seen only as a “gatekeeper,” HR’s role is merely to inform the company of what it can and cannot do.
However, this is not so among the Baldrige winners. Each company we studied required HR be a major player in the organization’s quality efforts. Management relies on HR to spread the word throughout the company as well as successfully apply quality principles to the HR function itself. Compared with non-winners studied, the HR function in the Baldrige companies is light years ahead in understanding the business, acting as a strategic partner, and championing quality.
There is no question every company gains something by comparing its operations against the Baldrige Award criteria.
Stephanie Y. Wilson
International Human Resource Group Westport, CT