Biden is our President-elect and one thing is certain: Whatever the ultimate balance of power in the US Senate, we do not need four more years of a stalemate. The major economic issues facing our country require a US Congress that can listen, learn, debate, and collaborate with the President to find solutions that advance the well-being of our nation.
What are our major economic issues?
The pandemic. The exponential growth rate in COVID virus cases (and with it, ICU bed usage and deaths) is slowing down our economic growth while at the same time increasing the deficit, food shortages, evictions, anxiety, and business bankruptcies, small and large. Our excess death date and virus incidence proved we are not managing the pandemic effectively. We need the President and Congress to act on Federal powers to drive manufacturing to support Covid-fighting efforts so that we close the growing shortage of healthcare supplies and protective equipment and increase testing. Hats off to the Trump administration and our drug companies for accelerating the development of a vaccine. But here too, we will need better control of the supply chain for the vaccine to be widely available and deployed.
Immigration. This issue incorporates a bundle of smaller issues: the status of the Dreamers (children brought here but not able to be citizens); addressing farm and food processing labor needs; meeting global standards for sanctuary seekers; retaining our competitive advantage as a beacon for students and entrepreneurial immigrants; and, addressing the status of residents who entered the US without permission but have lived and contributed to our nation for decades. We could solve the problems if it were not such a political cause. Unlike other developed nations, our nation’s population has remained relatively young due to our higher immigration rates. We need immigrants to pay for future social security as the baby boom ages, to fuel entrepreneurship, to move our birthrate back to a sustainable number, and to fuel our consumer economy.
Competitiveness. There were many adverse outcomes of our entry into Iraq, but one is rarely discussed. That is how federal research dollars shifted significantly towards defense-related research from basic science starting in 2001. The industries of the future demand government investment in basic research and China is rapidly gaining ground on us. The internet? Medical imaging? Search engines? All were a result of federal investment in R&D. It is our most important investment in my book.
Climate Change. The warming of the earth is not just an environmental issue, it is a business issue. It is costly to keep repairing communities affected by floods, fires, and hurricanes. New reports show a carbon tax and similar solutions are now net job creators. We need a plan that fairly transforms our nation towards renewable energy and fuels with little environmental impact. (See federal R&D investment comment above e.g., focus on carbon capture, reuse of spent nuclear fuel, and biotech-based fuels.) Biden had it right – why are we wasting precious federal tax dollars subsidizing big oil? Let’s invest in Green and the jobs it can create.
Inequality. We have record economic inequality in our nation and the studies conclude that it hurts our economic growth. A dramatic flattening of our tax rates over the last forty years is a major driver, along with winner-take-all markets. Educational policies, closing tax loopholes, and more fairly taxing investment versus labor income are potential solutions. Many states are passing a living minimum wage without the dire consequences that conservatives fear.
Infrastructure and budget deficits. I group these together as we have a deteriorating infrastructure at a time of record budget deficits, which continue to worsen at state, federal, and local levels with the pandemic. We’ll need some fresh approaches to infrastructure financing. We’ll need to raise overall taxes to pay for infrastructure investments and stop spending federal money that has low returns.
Healthcare. The data is clear that as a nation we pay far more for healthcare and have far worse population health than other developed countries. Indeed, life expectancy is falling for non-college-educated white men. Non-value added administrative costs, inadequate primary care (which is cheap) versus specialty care (which is expensive), excessive end-of-life spending, and avoidable medical errors must all be addressed. The system is designed to maximize individual incomes and corporate profits; it should be designed to give citizens and payers (governments, employers, and individuals) high-value care.
There are of course other national issues, but without a strong economy, I do not see how they are addressed. Hence my narrow focus on these eight. Sadly, we have this many as our federal governing processes have been broken for way, way, way too long.
None of these problem/opportunity areas can be addressed without collaborative work at the Federal level. A divided US Congress may get you federal judges, but it will not bring acceptable solutions to underlying problems affecting our wellbeing.
As citizens, we can vote. But it is very hard to move politicians outside of elections. Business leaders on the other hand have the power—through their purse and their numbers—to create change.
We need business leaders to become focused beyond their business. Get busy. The truly great leaders will emerge.