The United States pursues a range of economic policies, some industrial in nature, each carrying a package of economic and political justifications. However, in general, Washington relies mainly on monetary and fiscal policy to generate full employment and economic growth, even though the federal government does support specific industries, such as agriculture or aerospace, and occasionally intervenes directly to provide emergency assistance to firms such as AIG, Citigroup, or General Motors and Chrysler. The policies of most concern in this section are microeconomic in nature and affect both the environment for business and the international operations of companies.
Figure 5 illustrates a typical supply chain with manufacturing in China or other country but with brand headquarters and major retailing in the United States. The figure also shows selected public policies that affect decisions within the supply chain, particularly those dealing with where and how each step in the supply chain is accomplished. Other policies also are important to supply chains, but they are beyond the scope of this report (such as health care, workplace regulation, accounting standards, lawsuits and other legal issues, financial regulations, and executive compensation). Much of the analysis of the policies considered, however, also may apply to these policies.