Bipartisan Solutions to
Restore Trust & Prosperity
by Steve Odland and Joseph J. Minarik
Today, amidst the crisis of confidence in business and our economic system, Steve Odland and Joe Minarik lay out a clear plan for how business and policy leaders can generate prosperity for all, and make capitalism sustainable for generations to come.Order your copy Now
The Issues Covered
CREATING LONG-TERM PROSPERITY REQUIRES WIDE-RANGING REFORM
- Health Care
- Crony Capitalism
- Fiscal Health & Tax Reform
- MAKING WASHINGTON WORK
- CAMPAIGN FINANCE
- Corporate short-termism
Despite recent efforts, the cost of health care continues to skyrocket, threatening the affordability of and access to coverage for quality care. All of the nation’s budgets – household, business, and federal, state and local government – are under strain.
The heart of the solution lies in reforms that put market forces to work, while maintaining access for all – Medicare enrollees and younger persons alike. The entire health care system could achieve improved access, quality, and innovation if providers and insurance plans are motivated to deliver greater value to all.
Capitalism can endure only if its benefits are universally recognized. But today, capitalism is questioned, if not under attack. A primary reason is that income growth has lagged badly since the financial crisis, and economic inequality recalls the record levels of the 1930s.
Our nation can and must do more to increase economic opportunity for all. Every American must have the skills to move up the economic ladder in a fair system.
From no-bid contracts to regulatory loopholes to tax carve-outs, crony deals suggest that the economic system favors a well-connected few. This is a key reason for the widespread disillusionment with market-based capitalism.
Crony deals can protect incumbent businesses from potential innovative competitors, slowing economic and household income advancement. Growth in the size and scope of government has increased the leverage that any crony deal can exert on the fortunes of a business. Rising campaign costs create a dependence of elected policymakers on those who can provide campaign finance, and those who play that role can make aggressive use of lobbying. Business leaders must refrain from pursuing crony deals and become spokesmen for the importance of competition on a level playing field.
We need regulation because markets sometimes fail to function properly. Regulation can level the playing field by providing information, as just one example. To work effectively, regulation must be designed to achieve benefits that exceed the costs, which requires coordination between the legislators who write laws and the regulators whose regulations implement them. And in a rapidly changing world, regulations must be kept up to date.
The regulatory process needs better cost-benefit analyses. Regulators should make better use of technology to incorporate comments and feedback from interested citizens. And the regulatory process must provide neutral and continuous ex post review so that each regulation remains in step with the changing economy which it must support.
Quality education is essential for individual advancement and economic growth. Business sees the need every day as the main consumers of the education system’s output. The advancement of technology increases the knowledge and skill content of work, and our nation’s international competitors are surpassing our current educational performance.
Education has many benefits, but business leaders have direct experience in job readiness. Business must convince policymakers of the need for new investments in pre-K education, higher and uniform standards in the K-12 years, programs to address the needs of “unconventional students” who today fail to complete college degrees, and “re-skilling” for all of those who need to find new jobs and careers in the dynamic 21st century economy.
Globalization – the ever-widening mobility of capital, labor, goods, and even ideas – has generated immense prosperity. At the same time, however, it has obsoleted and devalued many skills and careers, causing dislocation, fear, and anxiety.
To fully capture the opportunities of globalization, while avoiding its costs, business leaders must show the way to better integrate trade and immigration in the economy. Importantly, they must advocate policies that support workers and communities caught in the transitions inherent in globalization and rapid technical change, so that capitalism truly works for all of us.
Left unaddressed, the burgeoning national debt subjects our nation to enormous and excessive risk. At the very least, rising debt-service costs will crowd out essential investment in the private and public sectors. In the extreme, the U.S. Treasury will find itself unable to uphold the full faith and credit of the nation, leading to utter economic and financial chaos. Treasury securities are attractive in international financial markets because other nations’ finances look even worse.
Business must make the case for fundamental tax reform, eliminating or reducing both individual and corporate tax preferences to both increase revenues and reduce our tax rates to globally competitive levels. Business must show how our vital safety net – Social Security and Medicare – can be made sound for this and future generations. And we must re-establish sound budgeting processes so that our public finances get back and stay on track.
The breakdown of the policymaking process in Washington is another reason for the loss of trust in government broadly. The failure of our elected policymakers to address the urgent, crucial issues facing our nation is a scandal of epic proportions. A continued inability to govern means that business – and workers and our entire economy – inevitably will suffer.
Business men and women must resume their traditional role in the public square in times of trouble. They should make clear their willingness to recognize and praise civility, constructive engagement, and honorable compromise in the nation’s interest. Business leaders also should inform themselves about basic reforms to the legislative process (coupled with reforms to campaign funding and lobbying) that would steer elected policymakers to put the nation ahead of politics.
The money chase in today’s campaign finance system corrodes public trust in government, and as a result erodes public trust and puts a damper on economic growth.
Business leaders must demand the same disclosure and transparency in our electoral system that they are required to offer in their firms’ finances. They should recommend a matching system for small-dollar contributions for federal elections that will make it possible for our elected policymakers to run without reliance on big-dollar donors. And they should demand that states move from election-based to appointment-based judicial systems, to end the unseemly reliance of prospective judges on contributions from individuals and interests who may later come before the bench.
In the decades following the Second World War, business scholars began espousing the notion of the corporation’s role as confined to maximizing profits for the shareholders of the moment. This ideological shift swept corporate America, due in part to companies’ belief that greater global competition required that they pare down to essentials. The result has been “quarterly capitalism,” which has shifted focus and resources away from building enduring value in the firm.
Business leaders can reverse this trend by expanding their sights to a corporate model that serves all stakeholders. Companies cannot prosper over the long run without also achieving success and sustainability for their customers, employees, suppliers, the environment, and the communities in which they do business.
What Business and Policy Leaders are saying
Now more than ever, business and policy leaders need to harness and realize the unparalleled power of capitalism. This book shows us how.
Neither an encomium nor a dirge, but a thoughtful, practical analysis of how business leaders can help repair the weaknesses in American capitalism and make it perform better for all of us.
Founding Director, Congressional Budget Office
No method of organizing economic activity has done more for the prosperity of the ordinary person than capitalism. It has harnessed the desire to deploy capital and one’s intellect and labor to do better for one’s family by meeting the needs of others. However, course corrections are periodically required to make it work fairly for everyone. Sustaining Capitalism offers the perfect course correction for capitalism—one that gives every citizen a shot at realizing the American Dream.
This thought-provoking book provides a bipartisan roadmap to how business leaders and policymakers can make capitalism work for all— to ensure that every citizen gets a shot at realizing the American Dream.
Americans are rightly worried about prospects for long-term growth, but a deeper concern is declining trust in public institutions—can government work for growth—and do so for everyone? All business leaders should read this book—a manifesto of the need to stand up for free enterprise and for policies that help it raise living standards. Sustaining Capitalism offers bipartisan solutions in key policy areas and in reforms to make government more accountable. This book offers a call to action to business leaders to reclaim their role in the public square.
and Economics, Columbia Business School
While one might debate any specific policy proposal in this thoughtful book, the authors make an important call to business leaders to engage more deeply in the public square to help bridge today’s partisan divide.
Sustainable solutions to America’s toughest challenges will require bipartisan support, and this book presents a range of common sense ideas to grow the economy, secure our fiscal future and move the country beyond political gridlock.
Peter G. Peterson Foundation