The President’s Economic Summit: Talk vs. Ideas

by | Aug 14, 2002

No bold new ideas have been heard so far, or are likely to be heard, at the president’s “economic summit” today in Texas. Bold new ideas, it is becoming increasingly obvious, are not Bush’s style. In place of new ideas, the summit offers a lot of very conventional jabbering about “consumer confidence.” This, believe it […]

No bold new ideas have been heard so far, or are likely to be heard, at the president’s “economic summit” today in Texas. Bold new ideas, it is becoming increasingly obvious, are not Bush’s style.

In place of new ideas, the summit offers a lot of very conventional jabbering about “consumer confidence.” This, believe it or not, is emerging as the centerpiece of the administration’s economic strategy. Here is how a Bush spokesman described it as the summit began: “There’s not going to be a second recession. We’re going to talk up the economy.”

In other words, they’re going to stimulate the economy by saying lots of nice things about it. Tony Robbins was not invited to the conference, but his method seems to dominate the administration’s approach: trying to cheerlead the public to awaken the consumer giant within.

This is a waste of time. Wishing won’t make it so; we have more to fear than fear itself; and trying to jawbone our way to higher “consumer confidence” is no substitute for the actual production of goods and services.

What the economy needs is not happy talk but good economic ideas. Here is what the president needs to do to provide the real foundations for a stronger economy:

  • — Stop worrying about “consumer confidence.” Consumer spending is an effect of prosperity, not its cause. People buy when their jobs are secure, when they are getting raises and promotions, when they are making money and have reason to believe that they will keep on making money. But this only happens when companies are seeking to expand their operations. And that only happens when investors are willing to risk their money in new ventures. The big investors are the ones who make these decisions, and they don’t invest on the basis of good feelings or “irrational exuberance.” They invest based on facts about the climate for doing business. Improving the business climate — improving the actual facts that induce large corporate investors to risk their money — should be the administration’s primary focus.
  • — Stop threatening CEOs. The most immediate threat to the business climate is the ongoing anti-corporate crusade. Cases of actual corporate fraud are few and do not scare investors away from every company and every industry. What scares them away is the threat of a free-floating Securities and Exchange Commission (SEC) witch hunt, with the nation’s 1,000 largest companies being targeted for SEC audits and corporate managers being threatened with jail time for every accounting error. The conventional wisdom is that the more vigorously the administration attacks corporate leaders, the more the public will be “reassured.” In the meantime, some foreign companies are considering de-listing themselves from American stock exchanges to avoid the draconian new penalties.
  • — Fight the war. Attack Saddam, not CEOs. Bush’s repeated declaration that he has made no decision on Iraq and chosen no war plan is bad for our foreign policy and bad for the economy. It makes America look weak and indecisive, and it makes investors uncertain about the future. Declaring war would reduce this uncertainty and give investors something to look forward to: the prospect of a more stable, Saddam-free Persian Gulf.
  • — Make the tax cuts permanent. Bush is already saying this, but he is saying it the same way he threatens Iraq: he talks about it a lot, but takes no decisive action. Making the tax cuts permanent is crucial to remove uncertainty; as it is, no one knows what will happen to tax rates when the current round of cuts comes up for renewal. Bush needs to stop nagging and make this into a political crusade.
  • — Lead. For the past six months, Bush has been following events rather than leading them. The Arabs say that Israel is more of a problem than Iraq, so Bush puts his war plans on hold to make peace proposals for the Palestinians; the Democrats whip up a frenzy over corporate scandals, so Bush scrambles to show that he’s just as hostile toward CEOs as everyone else; the Democrats accuse Republicans of not caring about the little guy, so Bush pads his “economic summit” with truck drivers and local restaurant owners to show that he is listening to “real people.” The Bush agenda is always determined by someone else: by the Europeans, by the Arab street, by Democratic political hacks.

More gabfests only underscore this leadership vacuum. What we need is less talk, more ideas — and a president who will fight for them.

Robert Tracinski was a senior writer for the Ayn Rand Institute from 2000 to 2004. The Institute promotes the philosophy of Ayn Rand, author of Atlas Shrugged and The Fountainhead. Mr. Tracinski is editor and publisher of The Intellectual Activist and TIADaily, which offer daily news and analysis from a pro-reason, pro-individualist perspective. To receive a free 30-day trial of the TIA Daily and a FREE pdf issue of the Intellectual Activist please go to TIADaily.com and enter your email address.

The views expressed above represent those of the author and do not necessarily represent the views of the editors and publishers of Capitalism Magazine. Capitalism Magazine sometimes publishes articles we disagree with because we think the article provides information, or a contrasting point of view, that may be of value to our readers.

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