Tribes should develop foreign policies to counter U.S. policy of contraction

Nobel winning economist Joseph Stiglitz is trying to change the national debate about the deficit, the role of government and the impact of those policies on the day-to-day economy.

“There are principled ways of cutting the deficit ...  putting Americans back to work,” the Columbia University professor recently said in a speech, as quoted in the Nieman Watchdog. He said this is essential in a country where economic inequality is growing and where one percent of the population controls 40 percent of the wealth and takes one-fourth of the nation’s income every year.

He says remember:  “The deficit didn’t cause the downturn. The downturn caused the deficit.”

I wish this was the official line from the Obama Administration. Instead both Republicans and too many Democrats are proposing policies of contraction. We should be shouting: Invest in people! Invest in infrastructure! Invest in ourselves!

Instead there is an unfortunate consensus supporting the policy of shrinking government without purpose; no one knows what the end game is supposed to look like, only the foggy notion that government should be smaller.

The policy of contraction puts Indian Country at risk of a total economic collapse. It’s as if policy makers want to see how bad things can get on reservations and in native communities where the economy is already bleak. This is policy recipe being advocated: Significantly reduce government funding; shrink and eliminate the only good paying jobs available, and hope for the best. In the larger economy the mantra is that the private sector will pick up the pieces. (Although Stiglitz and other economists make the case that governments should be spending more now to create jobs because that would be the best way to end deficit spending). But that is total fiction in remote Alaska villages or on an Indian reservation because there is no significant private sector. Nearly all of the jobs are government -- tribal, federal, or those programs funded by indirectly by government.

Ideally Indian Country would get some sort of exception to this flawed policy of contraction -- a hold harmless provision. That is happening a little bit. You see it in support from Republicans in Congress to protect the Bureau of Indian Affairs or the Indian Health Service budgets. The problem is that tribes are no longer “sole” source entities; the impact of cuts to community health clinics are nearly as important as direct IHS funding.

In my view tribes should prepare for the worst. We need to think through the impact of contraction policies and look for ways to protect people during the coming downturn.

Every tribe, for example, might consider its foreign policy. Who’s in charge? What are the foreign policy goals for the tribal community? What is required to make that so? Is there even a designated person to look for international funding or building relationships with world governments?

As the United States shrinks its spending, finding governments with an expansive investment focus is essential.

A new report from the Asia Society says China’s direct investment in the United States was some $5 billion last year and that number is expected to grow. The report says the U.S. should send a clear message that China is “welcome.” That’s a message Indian Country should send as well.

The report says China is interested in doing business here. “Chinese investors still seek deals in the United States and the investments are growing.  In particular, this appears to be the result of Chinese investors’ effort to broaden their portfolio of investments, spread the risk in that portfolio, and gain valuable management skills and western brands that they would not otherwise be able to acquire without investing in the United

States,” the report says, based on interviews with Chinese and U.S. officials.

Indian Country has an advantage in dealing with China that isn’t true for the rest of the United States. Our infrastructure is already built using “state-owned” enterprises. We call them tribal enterprises and they range from farms to hotels and casinos. We already know how government investment can create jobs.