National Association of Manufacturers President John Engler joined Secretary of State Condoleezza Rice at the State Department earlier this week for the final report of the Secretary’s Advisory Committee on Transformational Diplomacy. Engler and former Sen. John Breaux (D-LA) served as co-chairmen of the group.

Secretary Rice:

As the Committee has suggested, we have now created a Global Partnership Center. More and more in the 21st century, diplomacy, development, and strategic communications are not going to be the work of governments alone. To succeed in all these endeavors, the United States will need the active engagement of our private sector, our schools, our universities, our NGOs, and private individuals. This new Center enables the Department to build better and coordinate better the public-private partnerships that we need to be effective in the 21st century.

Let me stress that reforming and transforming the State Department is a long-term effort. It began before me, with my friend and predecessor, Colin Powell. And I’m quite confident that it will continue long into the future. This is a critical national security priority, and to succeed we will need the support of the Congress, the American people and of concerned men and women throughout the country.

View the video here.

Following up on the earlier posts about the U.S. House’s carbon offset program, we see that Reps. Joe Barton (R-TX) and John Shimkus (R-IL) of the Energy and Commerce Committee have asked GAO to take a look. The two had originally requested a broader study of offset programs, and now, in a letter to Comptroller General David Walker, they write:

[We] believe carbon offset programs provide a potentially valuable way for people to make direct commitments to environmental quality. However, without transparency, honesty, and reliable evidence of effectiveness, the programs seem poised to betray purchasers’ good intentions. As you know, not only do the individuals making these purchases risk being duped, but taxpayers are at risk as well — as government bodies at all levels respond to ‘green’ marketing pitches.

We are troubled to see that our own U.S. House of Representatives has been involved in the questionable purchase of carbon offsets. In November 2007, the House Chief Administrative Officer, as part of the Democratic Leadership’s Green the Capitol Initiative, announced a substantial $89,000 purchse of offsets from the Chicago Climate Exchange. We now learn, according to the January 28, 2008, Washington Post report, “Value of U.S. House’s Carbon Offsets Is Murky,” that these taxpayer funds may not have been purchased any new environmental benefit — just empty promises.

In light of this, we request that GAO, in the course of its work on these matters, specifically examine and report the manner and means by which the House of Representatives made these purchases. The investigation should look at relevant spending authorities, financial controls, and related due-diligence behind the purchases, and whether this taxpayer outlay will actually reduce greenhouse emissions.

A reasonable request, more evidence of the serious questions being raised — the FTC is looking into the market – about this suddenly prominent business, which is often accompanied by feel-good claims of greenness.

The National Air and Space Museum has just received a surprise $15 million gift that will allow the Smithsonian to add a new wing to the wonderful Steven F. Udvar-Hazy Center out near Dulles Airport. As The Washington Post reports today, the wing will allow visitors to watch the restoration of historic aircraft.

Congratulations and gratitude are due especially to D. Travis Engen, who donated the money in honor of his father, the late Donald Engen – a Navy pilot, admiral, head of the FAA, and former director of the Air and Space Museum — and the senior Engen’s wife, Mary Baker Engen.

Travis Engen, we note, was president and chief executive officer of Alcan, the global aluminum company. Once again, success in the private sector and large, energy-consuming industries had produced wonderful charitable results. We hope the Smithsonian understands this connection better than it did a few months ago.

And since we’re applauding the Smithsonian today, we’ll admit to be surprised at seeing “The Dangerous Book for Boys” displayed so prominently in the Natural History Museum’s giftshop. Honestly, we would have thought the book too politically incorrect for the Smithsonian, so kudos. The book is bound to inspire a new generation of craftsmen, engineers, scientists and people who know how to have fun. (Stopping by the Renwick to catch a quilting exhibit, we saw the book there, too. Very good.) The Daring Book for Girls was also on display.

From Tom Shales, the Washington Post’s television critic, writing on a new series — ‘Eli Stone’: No Seer, But No Rerun Either — premiering tonight on ABC.

It’s not at all encouraging that a future episode deals, like the pilot, with a negligent corporation, this one manufacturing poisonous pesticide. What’s this going to be, Bad Company of the Week? That could get tired quickly, though yet another future episode begins with Miller’s voice saying, “This story’s different.” We shall see.

It got tired years and years ago, Mr. Shales. Nevertheless, “Eli Stone” apparently wants to give “Law and Order” a run for its anti-capitalist money. Although…L&O last night eschewed its usual bashing of business and executives to rip a story from the headlines about Senator Craig and Norman Hsu (separate story lines). Surpisingly not awful.

Our friends at the American Tort Reform Association also knocked “Eli Stone” around for irresponsibly reinforcing the claim that measles vaccines lead to autisim. ATRA’s Sherman Joyce:

Leaving Hollywood’s hallucinations aside, the premier episode of Eli Stone reportedly features a lawsuit that alleges a link between a child’s autism and a preservative in certain childhood vaccines. Never mind that a growing body of medical research and most public health organizations insist no such link exists. So long as it makes for good drama and good ratings, who cares if parents might be misled into believing that getting their kids vaccinated is a bad idea?

The problem with screenwriters, seems to us, is the same problem that afflicts so many elected officials. They come straight out of college, surrounded by like-minded people, and drop right into hermetic Hollywood — or the government, in the case of pols — never encountering the real world of the private sector, where companies supply needed goods and services, bosses try to do right by their employees, people work hard, and the last thing on anybody’s mind is trying to screw the little guy.

P.S. How soon does John Edwards land a cameo role in one of the legal dramas/comedies? Guessing “The Practice.”

Last week we inaugurated this blog series on what the global value chain means for today’s manufacturers, especially the small and medium companies. Our latest publication, Forging New Partnerships, takes an indepth look at it.

A while back I met with a large group of manufacturers in Colorado Springs, Colo. They had been hammered by the tech drop off at the start of this decade and wanted to make sure it didn’t happen to them again. After prioritizing all their interests, finding a way to stay ahead of the innovation curve came out as the top area that they felt would ensure a more competitive future for them. So it’s no surprise that in today’s manufacturing value chain–where large OEMs expect their suppliers to contribute more in the way of new products and processes–Forging New Partnerships focuses on how small and medium manufacturers (SMMs) can keep their innovation edge.

From our interviews and a special SMM roundtable we held last fall, some of the innovation best practices emerged:

A better informed team of employees who know the stakes if new products are not produced correctly

A system of employee rewards for those who innovate, both in terms of cash bonuses to companywide recognition

Better informed customers who may need to understand why they need to share risks and costs for new product development

A high-tech college partner that can help SMMs think through and even develop their new innovation mandates. One California SMM has turned to local colleges for a “compute to compete” partnership.

Forging New Partnerships provides SMMs with a range of innovation options that they should consider now, from mastering lean manufacturing–including the Toyota Production System; developing new products and tailoring current products to new markets; harnessing federal and state programs by tapping grants and advisory services–such as the NIST Manufacturing Extension Partnership; and seeing the strong future for sustainable manufacturing and reducing the energy and environmental impact of products and processes. All of these are different paths to innovation; Forging New Partnerships highlights how many of today’s SMMs are following these pathways to build a strong business model.

Anytime somebody tries to make a political or economic point about trade policy and rising trade deficits, just check to see if they mention oil imports as a factor. If they don’t, they’re not giving you the straight story.

New economic figures point out what’s really going on. The Commerce Department reported yesterday that the economy rose an an annual rate of just 0.6 percent in the fourth quarter of 2007. For the year overall, the GDP increased by 2.5 perent in 2007 on a Q4/Q4 basis.

One bright spot in yesterday’s report was a continued improvement on the trade front, thanks to a realigned (lower) dollar and solid economic growth abroad. For the year overall, U.S. exports increased 7.7 percent, more than five times faster than the 1.4 percent rise in imports. Exports accounted for 40 percent of economic growth last year, the most in a dozen years.

With exports growing faster than imports for three consecutive years, the trade deficit has begun to narrow. After peaking at -6.2 percent of GDP in the fourth quarter of 2005, the trade deficit declined to -5.2 percent of GDP by the fourth quarter of 2007.

While this decline is noteworthy, it masks an even greater improvement. Because our economy relies heavily on imported oil, the rising cost of a barrel of oil has become a major factor in the U.S. the trade deficit. In the fourth quarter of last year, petroleum imports alone accounted for the majority (55 percent) of the entire U.S. trade deficit. Outside of petroleum imports, the U.S. trade deficit has already narrowed by 40 percent over the past three years and now, at 2.3 percent of GDP, stands at its lowest level since 1999 (see chart).

Jay Nordlinger reports on remarks at Davos by François Fillon, prime minister of France.

Fillon declares that France has rejoined the world as an economic partner. It is no longer the sick man of Europe; it has overcome a crisis of confidence. And France has learned several lessons. For example, “the corporate world is not the enemy of the wage-earner.” Also, “globalization is not an option but a fact.” Fillon speaks not only of reform, but of a “new state of mind” — attitudes that complement reform.

Even as strikers crippled the movements of the French people, says Fillon, the people stood behind reform. The nation has made a choice “in favor of opening up.”

Addressing the Davos throng, Fillon is proclaiming dynamism, classical liberalism — Reaganism. He says that no one should pay more than 50 percent in income tax. He says that the French must understand that the success of some also helps bring about the success of others.

There are a few supposed capitalists attending the World Economic Forum who would do well to pay attention to M. Fillon.

From President Bush’s remarks today at Robinson Helicopter, Torrance, CA.

Now, people in our country — let’s be perfectly frank about it, you hear them say trade isn’t any good; it doesn’t help. If I were a worker at Robinson, I’d be arguing against that. You’ve got good jobs here. People are working, and 70 percent of what you make gets sold overseas. So you can’t tell the people at Robinson Helicopter that trade isn’t good. When 70 percent of that which you manufacture gets sold somewhere else other than the United States, they ought to have a sign walking in here and say, trade is not only good, it is great; and we want the federal government to make it easier for us to sell products.

Good VOA report.

UPDATE (6:25 p.m.) Governor Schwarzenegger reinforced the trade and economic-growth message. Very good.

And excellent video of the event at the Governor’s webpage.

Congratulations to Robinson Helicopter in Torrance, California, which has been playing host this afternoon to President Bush, who has been speaking about the importance of trade and exports.

Excellent backdrop for the message.

Torrance, CA—In 2007 Robinson Helicopter Company manufactured 823 new helicopters, the most civil helicopters ever produced in a single year by one company. The industry record was 806 previously set by Robinson in 2005.

Robinson also broke the record for production of a single helicopter model in one year, producing 664 R44s. The prior record, also set by Robinson, was 563 R44s in 2005. While the R44 breaks records, the R22 maintains its market niche finishing the year with 159 helicopters produced.

Robinson expects strong sales to continue in 2008. To meet the growing demand, Robinson is focusing on increasing its production rate, which already averages 18 new aircraft per week.

Last year, Robinson sold its 8,000 helicopter. The buyer? A New Zealander. Robinson helicopters are even showing up in such places as Kazakhstan. Exports creating jobs …

The danger is high that any of the economic benefits of passing a stimulus plan will be vitiated — rather, stomped into the dust — by the ever-increasing costs of complying with new state and federal regulations. Take the pending EPA regulations that would lower acceptable ground-level ozone concentrations, a proposal based on questionable science and with no regard to the economic consequences. The very opposite of a stimulus…

The head of the Georgia Industry Association is making that case today to a hearing of the state Senate Science and Technology Committee, “Estimated Attainment Costs and Economic Impacts in Selected Regions of Proposed Revisions to the EPA 8-Hour Ozone Standard.” GIA’s Executive Director Sheri Wilburn tells the committee what the consequences would be for Atlanta:

The benefits are questionable, the costs clear, and they are enormous…The proposed rule change would cost the Atlanta metro $143.8 billion and 165,200 jobs. The Administration’s decision to change the ozone rule will be made in D.C., but its impacts will be felt across Georgia. Atlanta’s economic strength is needlessly being put to the test – EPA’s own estimates show that ozone levels have decreased 21 percent from 1980-2006.

Others testifying represent the Metro Atlanta Regional Business Coalition, Georgia Retail Association, Georgia Agribusiness Council and the Georgia Public Policy Foundation. The EPA’s new rule is expected in March.

The report, commissioned by the National Association of Manufacturers, on the economic consequences to Atlanta is available here. We’ve put the GIA’s entire news release in the extended entry section below.

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