Why we don't have it, and how we could
The ABCs of prosperity
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I talked at length on my radio show last week about the fact that President Obama’s economic growth record is abysmal compared with recent presidents who enacted low-tax, growth-friendly policies. From John F. Kennedy to Ronald Reagan to George W. Bush, we saw double-digit multiyear growth on a per-term basis as a result of policies that sought to unleash the private sector rather than empowering government.
Even Bill Clinton presided over excellent GDP growth after he worked with the Republican Congress on more growth-friendly policies, particularly in his last two years in office.
By contrast, Barack Obama has pursued policies of big spending, heavy regulation and ever-increasing government intervention in markets – especially in support of labor unions. Some of his liberal defenders say he hasn’t raised taxes all that much, but after the fiscal cliff agreement that was finalized in January, you can no longer say that. And with the coming new taxes associated with ObamaCare (not to mention the fact that Democrats are demanding even more tax increases in place of the looming budget sequester), it’s clear that Obama is a high-tax, heavy-regulation, big-spending, government-interventionist president.
How is that working out for us? Not well! Cumulative multiyear growth throughout Obama’s presidency is a paltry 7.5 percent. That is simply terrible, and Obama shows no signs of understanding this. He told congressional Democrats this week that if they just “stick to their principles” (in other words, keep up with the same insanity and hope for a better results), Nancy Pelosi will become Speaker of the House again in 2014.
Now Republicans can and will point out that these heavy-handed, big-government policies don’t promote growth. But they need to do more than that. The reason pro-growth policies work is that they are all about empowerment of individuals. When Republicans start emphasizing the need for policies that lay the groundwork for the ABCs of prosperity, they will not only win, but they might even govern effectively.
What are the ABCs of prosperity? I’m glad you asked. I’ll even throw in a D for you:
- Education. They key here, as far as public policy is concerned, is to remove barriers to education instead of building them up. Remember the D.C. Opportunity Scholarship Program? It was passed in 2004 when (ahem) Bush was president, and it was designed to remove barriers to success for students in poverty-stricken Washington D.C. Students who received the scholarships graduated at a 91 percent rate. Others were at 49 percent. Because it removed barriers! But Democrats didn’t like it because teachers’ unions didn’t like it, and now it’s gone. For all their talk about spending on education, too many of the policies that accompany this spending create barriers to education. Remove those barriers and you get people ready for B.
- A job. Have you checked the unemployment rate lately? It’s still around 8 percent. That’s terrible. Under Bush it was consistently under 6 percent. Have you noticed that we’ve still got well over 350,000 people filing new unemployment claims every month? We need to empower the private sector to grow and create jobs, and public policy must be designed to achieve that objective. This is what my 9-9-9 plan is all about. I recall that during the presidential campaign, former Sen. Rick Santorum said the problem with my plan was that it couldn’t pass. I responded that this was the difference between him as a politician and me as a businessman. He proposes things that can pass. I propose things that solve the problem. Leaders need to change their thinking, forget about what’s politically viable and focus on what solves the problem. Policies that empower the private sector to create jobs put people in a position to succeed, and that leads them to C.
- A career. Those who attain the education they need (whether it comes in a traditional form or an entirely unconventional form), prove themselves in the jobs and handle themselves responsibly usually find themselves on a path to a rewarding career. These folks may have the occasional professional setback, but they are confident and competent and they know how to bounce back and make good decisions. They are stable and prosperous, which sets them up for D.
- Ownership. Whether it’s a house, a car or a business, the more you own, the more empowered you are in your own life. Consider the difference between a person on one end of the spectrum who owns a house, and the person on the other end who is “renting to own” furniture and a flat-screen TV. The latter person is beholden to someone else for almost everything in their life. The former person is empowered and stable. Now I will quibble with the Bush Administration about something here. They recognized the power of ownership, but they pursued policies that made it too easy for people to become homeowners before they had gone through steps A, B and C. They thought ownership would breed responsibility. Nope. It works the other way around.
Prosperity does not come from government. It comes from people who live the ABCs of prosperity. These are the people who are empowered to drive the creation of wealth and offer opportunities to others.
The best thing government can do is enact policies that create an economic atmosphere conducive to prosperity. That is the opposite of what the Obama Administration and its allies in Congress are doing. Republicans can complain all day along about how horrible big government is, but when they really make the enactment of pro-prosperity policies their top priority – and achieve them – that will be when both they and the nation win.