At a recent conference about U.S. economic growth and job creation convened by the Brookings Institution, one business leader after another expressed deep frustration with our dysfunctional federal government. It became clear that the U.S. business community is confronted with a fundamental choice: Ignore Washington or work with it to fix the problems plaguing our economy.
There is strong sentiment, particularly among technology entrepreneurs, that the government is ineffective at best, irrelevant at worst — and therefore it should be ignored. While these sentiments are understandable, this attitude is self-defeating. Even if the private sector and local governments do everything right, it won’t be enough. Only Washington can provide key drivers of our competitiveness — from a sustainable macro-economic policy, pro-growth tax code, prudent spending, sensible regulation, and market-opening trade treaties to smart public investments in education, infrastructure, and research.
There’s really no alternative: business leaders must set aside their disappointment with our national political institutions and instead work to fix them.
Our economic problems are multiple and urgent. Three important studies released since the beginning of the year illuminate the mounting challenges the American economy faces in the global marketplace. First, the Competitiveness and Innovative Capacity of the United States, prepared by the Department of Commerce and the National Economic Council, raises six economic “alarms” — inadequate job creation, declining wages and household incomes, pressure on manufacturing, stagnant innovation, a sub-par K-12 education system, and obsolescent infrastructure. Other measures showing negative trends include growth in government and corporate R&D, the number of advanced degrees in science and technology, and the creation of new firms.