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November 30, 2004
An agenda for Commerce
Kellogg CEO Carlos Gutierrez is going to have a particularly big job running the Commerce Dept. In the past, this post hasn't really been part of the government's core economic team, which includes the Treasury, the Fed, and White House economic advisers. It's been more of a diplomatic position than anything else.
But given the particular challenges that face this economy, that diplomacy is more important than ever. Despite this morning's strong economic data, the U.S. still faces long-term threats to its competitiveness. There are more producers of low-cost, high-quality goods and services popping up around the globe, especially in Asia. To remain competitive, the U.S. needs a cheap dollar. That will help generate jobs, which will reduce the twin deficits, fiscal and trade.
The Commerce Dept. can help persuade other countries to accept a cheaper dollar. "We need someone who is willing to kick other people in the shins, in a nice way," says David Wyss, chief economist at Standard & Poor?. "The trade deficit must be cured. Other countries must be willing to export less or import more, and they have no desire to do either. That means that the dollar has to be allowed to move to a level that makes that possible," he says.
Gutierrez, 51, looks like a strong candidate for the job. Born in Cuba and raised in the U.S. and Mexico, his international background should help him abroad. And with a compelling personal story--he quit college to sell cereal out of a truck and worked his way up to CEO--he should be able to relate to executives and workers alike. But he'll need all of his persuasive power to get other countries to accept an ever cheaper dollar.
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