As U.S. takes tumble, growing cries for government policy

By Nick Carey - Analysis

DETROIT (Reuters) - Funny how a near-total meltdown of the global financial system can change your perspective on things.

For years the mantra of Corporate America has been that the invisible hand of the free market is best left unburdened by the heavy yoke of government policy.

But in the wake of the collapse of Lehman Brothers and the economic freefall that followed, there appears to have been a paradigm shift in corporate thinking.

Now, if you listened to the assembled executives and academics at the National Summit in Detroit this week, the heavy hand of government no longer seems so, well, heavy handed.

In various panels, participants have called for the U.S. government to come up with an industrial policy, an energy policy, infrastructure policy, education policy and others to help "define America's future" as the summit's slogan boasts.

"We can't hide from the global marketplace, so we have to prepare for it," said Sandy Baruah, assistant Secretary of Commerce under former U.S. President George W. Bush, who was not known for favoring government intervention or regulation of the markets -- with the notable exception of the massive financial sector bailouts in the twilight of his tenure.

"We need a national competitive strategy," Baruah, now a senior fellow at the Council on Competitiveness, said. "It's the right thing to do and time has run out."

ATTENTION DEFICIT ... WAIT, WHAT WAS THAT?

Others made similar calls to action.

William Ford, chairman of Ford Motor Co and great-grandson of company founder Henry Ford, lamented that the United States, unlike the rest of the world, has no established industrial policy.

"As a nation we've had collective ADD (Attention Deficit Disorder) when it comes to the issues," he said. "We have to have a longer-term outlook."

"People are waking up to the fact that our industrial base is eroding," he added. "Prosperous nations don't let that happen."

Joseph Welch, chief executive of electricity transmission company ITC Holdings Corp, warned that America's position as the world's top energy consumer would inevitably lead to problems as developing nations seek their share of resources.

"We are going to see a reallocation process that will have dire consequences -- not for us, but for our kids or grandkids," he said. "We need to start thinking now."

"Can you imagine that the largest energy consumer in the world doesn't have an energy policy?" he added.