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Clinton Revives Debate Over Industrial Policy : Economy: He says government should take a more active role in supporting business. Bush disagrees.

May 20, 1992|RONALD BROWNSTEIN | TIMES POLITICAL WRITER

But Clinton envisions government's role extending beyond these investments, to the crafting of a "national economic strategy." Exactly what such a strategy would specifically entail isn't clear, but it is apparent that Clinton envisions a much more intimate relationship between government and business than now prevails.

Earlier this week, for example, he told the shipyard workers that government should move aggressively to steer defense contractors toward peacetime pursuits, such as construction of high-speed rail.

To get business where he wants it to go--and balance his promises of cooperation with populist notes of confrontation--Clinton has also brandished some sticks. He has called for the elimination of tax incentives for companies that move jobs overseas, and tougher tax treatment of lavish corporate salaries. He has suggested that any industry granted protection from foreign imports--such as the auto manufacturers--be required to reform their operations and increase investments in productivity.

Almost all of this is anathema to the free-market economists in the Bush Administration. Bush has also talked about government's ability to act as a "catalyst" for economic change--largely by reforming education and investing in infrastructure.

But Democrats insist he hasn't backed up his rhetoric with dollars. And his Administration has generally argued that the most important thing government can do to encourage economic growth is to get out of the private sector's way--by reducing environmental and other regulations, and cutting taxes on capital gains.

At times during the campaign, Clinton has mused that he faces the task of selling not only himself, but the idea that government itself can be a positive force for change. That's no small challenge in an era when many voters wonder why members of Congress can't balance even their own checkbooks. But if Clinton can't first soften those suspicions, analysts say, he's unlikely to convince Americans that the way to revive the economy is to give Washington a louder voice in the boardrooms.

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