Throughout the 1980s, liberals and conservatives heatedly debated the promise and the perils of a government-led national industrial policy. In the 1990s, argues political analyst Kevin Phillips, a new political compromise is in the making. No matter how sharp the disagreements of the 1992 presidential election campaign nor who ultimately wins the election, one outcome at least is certain: in the next administration, the United States will have some kind of industrial policy. In the best of all possible worlds, says Phillips, this new political compromise would give birth to a new American synthesis--one that would combine the Republicans' regard for the workings of the market with the Democrats' belief in the strategic role of government as an enabler of economic growth. But this is the real world of politics, not the ideal world of public policy. And so, what the debate will yield, regardless of who wins, is a national industrial policy that is vague, confusing, highly politicized--and frequently ineffective. It will be government intervention driven by special interests rather than by strategic intent. Given the many problems they face in the arena of global competition, executives may find this scenario unsatisfying. Believing that the United States cannot afford an incoherent and ineffective industrial policy, they will hope for some politician to fix the situation--or think that corporate leaders must fix it themselves. But, says Phillips, such hopes are a breeding ground of political illusions. Better for managers to learn how to live with a haphazard industrial policy and to concentrate on minimizing its negative impacts on their own company and industry. Such an approach may not be satisfying, but it is the essence of political realism. INSET: Why the United States Can't Be More Like Germany and Japan.. [ABSTRACT FROM AUTHOR]