Robert B. Reich, a co-founder of The American Prospect, is a Professor of Public Policy at the Goldman School of Public Policy at the University of California at Berkeley. His website can be found here and his blog can be found here.
The butcher metaphors of modern management are back: cutting out the fat, slicing to the bone, getting leaner and meaner. Well, all this butchering may slow the slide of stock prices, but it's not a way to build long-term competitive strengths.
The fact is, the key competitive assets of most companies these days is their people, not their machines or plants or even their patents, but their employees. Their employees' intellectual capital, knowledge about the companies' products, services and technologies. Their employees social capital, relations they built up over the years with clients and customers. And inside the company, relationships among employees who've become a team.
The Congressional Budget Office, in a report released yesterday, says the government will be forced to take $9 billion from the so-called Social Security surplus in fiscal year 2001 to make ends meet. The news undoubtedly will elicit a new round of fancy-dance explanations from the Bush administration for how it plans to avoid dipping into the Social Security surplus next year, and will add more fuel to the Democrats' charge that the president's tax cut has put Social Security in jeopardy. Expect the decible level to grow when Congress returns to Washington and both sides go to battle over the 2002 budget.
The Great American Debate about how to use the largest budget surplus in history has come to a choice between the giant $1.2 trillion tax cut recently passed by the Senate and the gargantuan $1.6 trillion cut passed by the House. This week House-Senate conferees begin picking a figure between these two. If future historians ever want to illustrate both the pathetic paucity of political debate at the start of the 21st century and the near-bankruptcy of the Democratic Party, they could do no better than to use this example.
Last week the Congressional Budget Office confirmed what every semiconscious observer of the budget process had known for months: that proposed spending by President Bush and Congress would force the government to take $9 billion from the ostensibly sacrosanct Social Security surplus. And over the following three years, CBO projected, the government would swipe another $21 billion--assuming, optimistically, that the president and Congress didn't spend even more money.