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A New Agenda for Growth

February 1, 2013 3 minute Read by John Prestbo

It is gratifying to see some of the issues — and recommendations — addressed in this blog beginning to show up in the mainstream press. We need all the help we can get in advocating the steps required to accelerate U.S. economic growth to 4% annually. The November 19 issue of Time magazine has two columnists writing on important topics. The first is Rana Foroohar, an Iranian journalist who is now assistant managing editor of Time. She tackles income inequality with admirable clarity:

You really can’t have a sustainable recovery in an economy that’s 70% fueled by consumer spending when 90% of the income gains since the recovery began have accrued to 1% of the population. That’s why I think the key to really solving the growth puzzle is tackling inequality. It’s been labeled a social issue. But there is growing reason to think of it as an economic issue.

Her principal prescription is tax reform, especially extensive simplification of the tax code. This overhaul is essential, I agree, and not only because it would make taxes fairer. It also would broaden the base of taxpayers, many of whom have disappeared from the tax rolls since the rates were lowered in 2003. They need to reacquire a sense of participating in the nation’s recovery. Turn the page and there is Fareed Zakaria arguing for a big effort to repair and upgrade our infrastructure. “Dealing with the larger challenges is important,” he writes, “but none of them will have an instant impact on the economy. A large push to rebuild America would.” And the benefits are not just short-term, he points out: “In the long run, you cannot have robust growth without strong infrastructure.” Zakaria believes a national infrastructure bank would foster a partnership between the public and private sectors. He also suggests President Obama ask Mitt Romney to spearhead the infrastructure project. Journalists are not policy makers, but they do have the capability of putting ideas directly to the people who are. Let’s hope the policy folks are reading, and listening.


Author

John Prestbo
John Prestbo

2012 Economic Growth Fellow

John Prestbo is retired as editor and executive director of Dow Jones Indexes. Previously he was markets editor at The Wall Street Journal. He has co-authored or edited several books over the past 30 years. The most recent is “The Market’s Measure: An Illustrated History of America Told Through the Dow Jones Industrial Average,” published in 1999 by Dow Jones Indexes. His column, Indexed Investor, appears on the highly regarded “MarketWatch” business and finance website. He received his bachelor's and master's degrees from Northwestern University.

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