I read an interesting article the other day, at the Contracting Business
website. Article Reprinted here with thanks to editor Matt Michel.
I offer it for comment, and a respite from the political drivel hitting the airways…
10 Steps To Get The Economy Booming.
Lately, every day seems to bring new depressing economic report. What gives? The recession officially ended in June 2009. We’re two years into an expansion. Why doesn’t it feel like one? Why won’t the economy get rolling?
In a word, it’s Washington. Fortunately, what Washington screws up, Washington can fix. Here are 10 steps to get the economy booming.
1. Change The Rhetoric — The administration and congress need to adjust its terminology. Instead of demonizing business, celebrate it. Stop considering profit a four-letter word. Stop telling students that working in the public sector is a higher calling than creating jobs and wealth.
2. Hire Businesspeople — Washington is clueless about businesspeople, about how we think, how we react to policies, and how we respond to incentives. Only 22% of congress studied economics or business in college (http://ow.ly/6e6OP). Writing in Forbes, JPMorgan’s Michael Cembalest noted that just over 20% of the current administration’s cabinet appointments have private sector experience. This compares to a post war average of 45% (http://ow.ly/6e6N4).
Increase business experience in the White House and on Capitol Hill and reduce job killing stupidity.
3. Halt the Regulatory Juggernaut — From the start of 2008 through the middle of 2011, 75 new major regulations were introduced according to the Heritage Foundation. This was countered by only six deregulatory actions. An onslaught of more regulations are in process (http://ow.ly/6e6QR).
Regulations distort the marketplace and freeze business while everyone waits to determine the impact. Just stop it. Freeze new regulations for five years. Remove the ability of unelected bureaucrats to fabricate regulations by requiring Congress to approve each one. Sunset existing regulations by requiring periodic reauthorization.
4. Implement Free Trade Agreements — We’ve had free trade agreements negotiated with Columbia, Panama, and South Korea that the administration is not presenting to the Senate for ratification. Pass these and immediately increase jobs and exports (http://ow.ly/6e6Sg). Meanwhile the Europeans and Canadians take advantage of our inaction, costing U.S. jobs.
5. Eliminate Market Distortions — The marketplace is a bizarre, crazy quilt of subsidies, requirements, restrictions, and tariffs that protect the politically connected at the expense of everyone else. Eliminate the ethanol requirement. Get rid of green energy subsidies. Privatize Amtrak, Fannie Mae, and Freddie Mac. Let people choose their own toilets, light bulbs, air conditioners, cars, and so on without interference from Washington.
6. Lower the Minimum Wage — The current wage level is preventing young and low skilled workers from learning valuable work skills because they aren’t worth the minimum wage. This is why youth unemployment is 18%. Among blacks it’s 31% (http://ow.ly/6e6TX).
7. Tap Into Domestic Energy — I’ve written before about the vast amounts of coal, oil, and natural gas that lie beneath our feet. We keep finding more domestic energy supplies and developing new ways to safely recover them. Tapping our own energy resources could make us energy independent in a decade, creating a million good paying jobs, cutting our trade deficit, and lowering the cost of living.
8. Limit the Fed to Price Stability — The Federal Reserve needs to stop tinkering with the economy, printing money, devaluing the currency, and raising the specter of runaway inflation, which all cloud the economic horizon. Its mission should be maintaining price stability. Period.
9. Adopt Tort Reform — Simply making the loser pay the winner’s legal costs would eliminate most frivolous lawsuits, cut health care by reducing defensive medicine, cut insurance costs, and generally boost the economy.
10. Lower Corporate Tax Rates — At 34.6%, U.S. businesses pay the highest corporate tax rates in the developed world. The average among developed countries is 18.6%. The global average is 17.7%. Cutting rates would increase investment and jobs in the U.S. (http://ow.ly/6e7wj).
Is this everything that should be done? Not by a longshot, but it’s a start. However, since common sense isn’t common in the Capital, I’m not planning on any of it. Instead, I’m focusing on the things I can affect, which is investing in business so that it grows and prospers regardless of Washington. I suggest you do the same.