Dear Mr. President,
Recently I have written several columns dealing with what ails our economy. I have afterwards been astounded at the number of comments I receive informing me that wrecking the economy is part of your administration’s plan to drive the nation into the ground so that it can be rebuilt as a socialist utopia where government pied pipers will lead us all to nirvana.
I, for one, do not for an instant believe you purposely want to harm the economy. In fact, with the 2012 election looming, I am certain you are second to no one in your desire to claim credit for a booming economy. Therefore I am wondering why you appear to be desperately avoiding doing anything that could get the economy moving again.
The only answer I can come up with is that you don’t know what to do, and you are surrounded by advisers who are just as clueless. Seven quarters of lousy growth numbers since the official end of the recession, last week’s stock plunge, Friday’s downgrade of the nation’s debt rating, and stubbornly high unemployment are all screaming the same message: What you have been doing is not working. One wonders, then, why all the proposals coming from your administration appear to call for more of the same.
Albert Einstein once defined insanity as doing the same thing over and over in hopes of a different outcome. Mr. President, you need two things: new ideas, and a willingness to act on them. The White House has become an echo chamber, where the same limited ideas get repeated ad nauseam. Giving a failed policy such as the stimulus program a new name — the infrastructure bank — does not disguise the fact that you are trying to enact Son of Stimulus.
It would help if you (and Republicans also) stopped obsessing about only one side of the economic equation — the debt. It is time to move the debate to the topic of growth. When the nation’s economy is growing, jobs multiply, government revenues increase, and the debt becomes a bit more manageable. You can’t ignore the debt, but you can start putting forward options to get the country past the seemingly endless debates over spending.
Your future success also requires a major adjustment in your own attitudes toward business and the economy. Given your background as a community organizer, it may be difficult for you to accept that capitalist businesses are not the enemy of the American people. Rather, the business-dominated capitalist model is the best system ever devised by man to provide the greatest amount of good to the greatest number of people. You may find this difficult to believe, but businessmen are the greatest believers in redistributive economics I have ever come across. They just prefer to redistribute their profits through paychecks, dividends that enrich 401(k) plans, and investments that create jobs.
If you truly desire to deliver the nation from its current economic morass, then call off your administration’s war on business. Consider what happens to the entrepreneurial impulse when success means you could easily find yourself summoned before Congress to make a public apology for turning a profit. You have often chastised business for not spending the one or two trillion dollars it is holding in excess cash. Since cash, in today’s low-interest environment, yields companies next to nothing, it is time for you to ask yourself why they continue to hold onto it. I suspect most firms would welcome an opportunity to put that cash to good use. They will not, however, squander it. Unlike the stimulus program, which threw away nearly a trillion dollars, companies cannot spend a trillion dollars and have nothing to show for it. Unlike the way government treats taxpayers, companies cannot go back to their customers and ask for a cash fill-up. The reason business is holding onto its cash is that your administration has created such a negative and uncertain business climate that many companies have judged it too risky to put their cash reserves in play.
The much-needed revolution in attitudes within your administration must come from the top. As a first step, fire all your economic advisers. Interestingly, the economists you started with have already bolted. Rats are never hesitant to leap from a sinking ship. Unfortunately, you flubbed the opportunity their departure presented by replacing them with ideological clones. Please have Secretary of the Treasury Timothy Geithner show them the door, and then shove him out before the door closes.
For the time being, it probably is not wise to replace them with other economists. What good have their ilk done you? Which of them predicted the financial crisis? Have any of them advocated any measures that have helped us out of our economic hole? By now even you have to be sick of hearing economists say, “but on the other hand,” as if there were two equally good alternatives for every problem. If you do have to replace them with other economists, then stop listening to them. Let them sit in the corner writing papers no one will read, as you get back to the serious business of fixing the country.
Rather than continually turning to the clueless council of economic advisers, create a body of business advisers. Bring to your side the men and women who have been keeping American business afloat during this crisis and let them help you unclog the paths to prosperity. If they knew that they would be listened to and that they could make a difference, you will be amazed at how many will flock to your banner. Dozens, probably hundreds, of “evil” businessmen will forgo their paychecks, their bonuses, and their private jets to work uncompensated to help you fix America.
As your former adviser Larry Summers pointed out, “. . . if Hitler had not come along, Franklin Roosevelt would have left office in 1941 with an unemployment rate in excess of 15 percent and an economic recovery strategy that had basically failed.” Apparently, Roosevelt’s economic advisers were as oblivious as your own. The people who met the emergency of World War II and got American industry working again were not economists. They were the businessmen who came to Washington to work for a dollar a year. It was they and their selfless sacrifice, coupled with those who stayed back in the factories, that made America the Arsenal of Democracy.
Realizing he needed the full might of American industry to win the war, Roosevelt pushed the New Dealers aside, so as to make room for men who actually knew how to build and deliver a product. It is well past time for you to do the same.
— Jim Lacey is professor of strategic studies at the Marine Corps War College. He is the author of the recently released The First Clash and Keep from All Thoughtful Men. The opinions in this article are entirely his own and do not represent those of the Department of Defense or any of its members.