U.S. economic policy is sorely lacking an effective grand strategy, and we are likely to endure high unemployment, weak economic performance and trying financial markets until such a strategy is articulated and pursued.
So, what should be the economic grand strategy? In a word: growth.
The grand strategy is sector-neutral. It doesn't have favored industries or political parties. It does not seek to curry favor with special interests. The grand strategy fights statism everywhere.
The grand strategy goes out of its way to ensure that big companies are not advantaged at the expense of smaller, entrepreneurial competitors. If banks are "too big to fail," they are too big. They must be allowed to succeed or fail on their own merit, without any hint of government support.
A pro-growth strategy is decidedly long term in orientation. It aims for higher standards of living five, 10 and 20 years out, long past the next election cycle. It replaces the false promise made to the next generation of entitlement-program recipients with a solvent, dependable model that encourages work and savings.
An effective growth strategy confronts tough challenges before they become intractable. Fundamental tax reform—dramatically lowering tax rates for individuals and companies while eliminating loopholes, deductions and credits—is critical to economic growth.
Achieving strong growth requires the free flow of capital, goods and ideas. We have world-class products and services to sell to the growing middle class in emerging markets. We must find our voice to resist the rising tide of economic protectionism…
The growth strategy also demands an abiding respect for the rule of law, and stable, cost-effective rules of the road from regulators.