Candidates Lack Vision for the U.S. Economy

David Choi, professor of business, argues that no presidential candidate has an economic vision for America. 

This year’s primaries have already been the most exciting in decades. Americans are fired up – about “replacing Bush”, supporting or bringing back the military in Iraq, and having a war hero or the first woman or African American as President of the U.S. People are voting in record numbers and the candidates have received more money and attention (20 televised debates among democrats alone) than ever before in U.S. history.

But given today’s recessionary economy and increasing competition from abroad, there is surprisingly little discussion about the U.S. economy and its future. As Paul Krugman of New York Times noted (January 14, 2008), the people have been paying more attention to the candidates’ facial expressions than their economic policies.

It’s true. Ask the supporters what is their candidate’s vision or strategy for America’s economy? You will get a long silence.

The candidates may remark about tax cuts, health care, housing crisis or the stimulus package. For example, McCain would make the Bush tax cuts permanent and offer additional tax breaks to cover for health care costs. Clinton would offer more help to those about to lose their homes from foreclosures. Obama has called for a tax credit worth $4,000 for college tuition every year to make college affordable.

All these sound somewhat acceptable but other than presenting various piecemeal programs, no one has articulated a comprehensive plan for improving America’s economy. What is each candidate’s vision for America’s economy in 5 or 10 years? How do we regain America’s competitiveness for the long term?

Even if some of the above-mentioned individual plans were passed, they simply skim the surface. Would any really help us compete against China and India? How will tax breaks really help the poor get health insurance so they can become productive members of our economy? Is a $4,000 tax credit for college enough to create better engineers and strengthen our leadership in technology? (By the way, private college tuition and dormitory run $40,000 a year.) Shouldn’t America have a clear economic vision and strategy – the way good companies and sports teams do?

At least the candidates are smart people who know what they are doing, right? Or do they? You could be concerned that none of them have ever been in business. None of them have run anything or allocated capital between different priorities. All of them have been legislators, whose jobs have been about pushing individual legislation. It doesn’t help our confidence when John McCain admits that "the issue of economics is something that I've really never understood as well as I should."

Imagine having a CEO of a major corporation not having a long term plan for its share price. Could one become a CEO without promising to grow its business faster than 2% per year (like our country’s GDP)? What would shareholders do with a CEO making minor short-term tweaks without having a comprehensive strategy?

If you think it’s unfair to expect so much from politicians, it turns out that leaders of other economically successful countries (especially the ones we are competing against) do exactly that – set ambitious goals, put together plans and accomplish them.

For instance, in 2002, the Chinese government drew up a plan to quadruple its economy by 2020. The country is well on its way to meeting this ambitious goal, having almost doubled its GDP already. India plans to double per capita income in ten years and become the dominant force in IT and entertainment in the world. The new South Korean president has been elected for promising he would deliver a 7% GDP growth and a top ten economy in the world. Such ambitious goals are rallying and energizing the people in these countries to work together diligently.

Maybe we should issue visas to political leaders, not just programmers or laborers.

Of course, we don’t live in a planned economy like China. But it may be that we are not challenging the political candidates enough on economic issues. Sadly, we all seem to have gotten used to the 3% GDP growth, dominance of Japanese car manufacturers, our failing K-12 education system, the shrinking middle class, and the idea that there is little Washington can do about the economy. The politicians don’t realize that economic policies don’t all have to be about redistribution between the rich and poor. Americans would be willing to make sacrifices to grow the pie for everyone if someone were to led with a sensible vision of the future.

Is a certain candidate better equipped to help us compete globally? Maybe. But we won’t know for sure until we pay more attention to economic policies and ask the candidates to articulate how their plan will help America compete more effectively in coming decades.

Posted 3/5/08