Anger Management

With the Party Conventions upon us, soon we will hear roaring speeches about how to “Make America Great Again” or how we will be “Stronger Together” in order to regain our footing as a nation.

There’s no question that America is going through a period of turmoil. People are angry and frustrated. Friends and relatives of all political stripes talk about their concerns. Words that describe these conversations include “unsettled”, “fear”, “hate”, “baffled.”  Many express their worry for the future of this country.

I understand that anxiety. But are these truly unprecedented times?

Scholars and historians reflect on the 1960s and draw comparisons to the volatility, civil unrest, and racial tensions. The 60s was also a time of massive economic growth, perhaps signaling why our current challenges seem extraordinary. 

Ultimately, economic insecurity fuels stress, worry and can lead to social unrest.

An apolitical review of economic growth under the Obama Administration shows a “Tale of Two Narratives.”  On the one hand, the record shows that Gross Domestic Product (GDP) growth has tracked below the average of all Presidential terms dating back to Eisenhower.  On the other hand, one has to look at how he entered the Presidency, just as a major recession was starting.  Importantly, Obama’s record scores perfectly average for all the years for which there has been divided government.  If you look at the ratio of national debt to GDP, Obama has the second worst record with 20% debt.  On the other hand, George W. Bush, the President’s predecessor has the worst record on this point, with a 28% debt to GDP ratio.  Interestingly, LBJ ranks atop the chart with the best record of -11% debt to GDP.

There is no real consensus on the numbers.  Half the country seems to think Obama is the economic devil, and the other half thinks he’s an angel. It’s important to understand this context as we look to the future. We can all agree that we need to grow our economy, but it is the details that matter most.

Economists will tell you that there are four ways to generate economic growth.  1) Discover new and better resources, 2) grow the labor force, 3) train the labor force to be more specialized to improve their skill and increase productivity, and 4) create superior technology or other capital goods.

For eight weeks FSR’s Presidential Focus Series has raised several of these issues and encouraged the candidates to focus on policies that promote best in class innovation, tackle regulatory uncertainty and create jobs, increase responsible lending, protect financial data, and foster savings and investment.  Each week we have posed questions to ask the candidates specifics on how to achieve these goals. 

As we move forward through this presidential election, we must challenge the candidates to tell us their plans.  Are they comfortable with anemic growth or do they want to take the necessary steps to tackle the debt and create more goods and services?  What are their ideas and how will they make those plans a reality?

This week Ireland stunned the world with their announcement that their GDP rose 26.3 percent in 2015, compared with a previously reported 7.8 percent. The increase is partly linked to firms relocating to Ireland for tax benefits, so the question to ask is how we can improve our tax code to keep firms in the United States?   

Recently Kevin Brady, Chairman of the House Ways and Means Committee, together with Speaker Ryan, released a Blueprint for Tax Reform.  The framework is the latest in a number of proposals intended to put the country on a healthy fiscal path. To move forward, candidates must be willing to tackle tough issues like tax reform if we are going to grow the economy.  A better tax system will allow for innovation, promote savings and investment, grow businesses and create new jobs. 

Ultimately, growing our economy will lead to many good outcomes – better wages and a better national fiscal picture. We will see a decrease in health care expenditures, and more Americans will have access to good jobs. But these opportunities will also be good for the country socially. The stress, anxiety, and anger dominating our national narrative will improve, angry mobs will put away their pitchforks, and a sense of optimism will reemerge.

Hopeful rallying cries are Presidential politics 101.  It’s time for specifics and not just slogans.  So let’s get to work.