16 July 2012
Make the private sector make promises, too
Fareed Zakaria's opinion piece in the latest Time summarizes the debate over stimulating the American economy quite nicely. One major party wants to stimulate the economy by stimulating consumer demand, through government spending if necessary. From this perspective, since the supply side (i.e. the private sector) can't expand and create jobs in the absence of demand, "the only cure is for the government to step in, spend money and create demand." The other major party assumes that the supply side (i.e. the private sector) could revive the economy itself "if they were in an environment that encouraged them to do so." Noting that many of the most successful products of recent times (e.g. the iPad) responded to no pre-existing demand, this view sees demand as less important than freedom to innovate, a freedom presumably impeded by a perceived anti-business environment in government today. Zakaria takes a "why not do both?" approach, calling (to the likely horror of deficit hawks) for both lower corporate taxes and more government investment in reviving the nation's infrastructure. I cite Zakaria not to criticize his own stance but to point out the constant implication of Republican (and libertarian) rhetoric that only an "anti-business" atmosphere is holding the private sector back from reviving the economy. We'll hear a lot along these lines this year, and my advice to anyone who isn't a Republican or free-market fanatic is: call their bluff. It follows from this line of argument that there are things entrepreneurs could do now to create jobs, if not for the mean old government and its regulations and taxes. Let's find out what these brilliant ideas are. Let's get these great leaders to tell us how many jobs they'll create if Mitt Romney is elected President. If they're being held back now, they should be able to tell us what they're being held back from. Where are the new products and the expansion plans? If the entrepreneurs can't tell us immediately, that itself tells us something. If they tell us that the economy doesn't work as simply as fewer burdens = more jobs right away, that tells us something more. If they're bold enough to make promises, then we have something to hold them to -- or more specifically their Republican minions -- at the next election. My suspicion for some time has been that free-enterprise ideologues have made "government" a scapegoat for their own failures. Any failure on the part of self-appointed spokespersons for the private sector to make plain promises about job creation in more "encouraging" circumstances would tend to confirm my suspicion. Given their feeble enthusiasm for Mitt Romney, many Republicans would like this election to become a debate between the private and public sectors. They expect to win such a debate based on the commonplace assumption of superior private-sector efficiency. If so, then the electorate has a right to know from that faction of the private sector that subsidizes the Romney campaign exactly what they propose to do -- or at least if they propose to do anything, once government presumably no longer holds them back. For good or ill, we expect politicians to make promises during election campaigns. If the private sector itself, or some surrogate like the Chamber of Commerce, proposes to be a political actor, we should expect and demand similar promises from them, and hold them accountable for how they keep them.