America thrives on capitalism, and capitalism thrives on freedom – freedom of markets, of choice, of whether to start a new business, and even the freedom to fail.
American capitalism, the belief that markets will allocate capital to the highest and best use, has underpinned U.S. prosperity for decades, thanks to thriving business competition and a government that provided a fair and predictable framework for free markets to operate. But lately, government actions are creating economic uncertainty instead, and this is wreaking havoc on the American dream.
The Main Street entrepreneur, and, more recently, the Silicon Valley titan are used to experiencing the thrill of victory and the agony of defeat, as they used to say on ABC’s Wide World of Sports. But recent market turmoil has brought this rollercoaster home for many Americans. Some wonder if their bank accounts and 401(k)s are safe. Many are putting starter-home purchases on hold because interest rates are too high. And others can’t get bank loans to start a new business.
But we can breathe new life into the American dream by combining smart government policy and business ingenuity, unleashing innovation, and fostering cooperation. At the George W. Bush Institute, we believe that the way to do that is by promoting economic growth, education accountability, and supporting entrepreneurship.
We’re researching the best practices behind creating prosperous cities and towns as a means of expanding opportunity in America. We’re evaluating how cities can help entrepreneurs, both immigrant and nonimmigrant business ventures. And we are looking at ecosystem synergies between research universities and medical institutions.
A prosperous America is an educated America, so we’re providing state education leaders with the tools and resources to address the learning loss and lack of readiness exacerbated by the pandemic. We’re focusing on research-based teaching and strong assessment systems to deliver on the promise to educate our young people.
We’re also developing a modernized immigration policy focused on skills and education to accelerate economic growth.
We believe we can win this war for our future through private markets humanized by compassionate government – and by making sure that everyone has a chance at success.
But currently, capitalism is under threat. Inflation is shutting down housing and commercial lending. Bank capital requirements are inhibiting the bond markets. Environmental regulations are stymying affordable energy and increasing the cost of doing business.
U.S. debt is now greater than our GDP. It feels like Washington is putting one foot on the gas and the other on the brake – at the same time – and sending American capitalism into a tailspin.
We need to reach the right balance between industry subsidies that will stimulate investment and government regulations that could have the opposite effect. Because for all intents and purposes, across the ocean, China has declared economic war on America.
Beijing has created its own brand of state-sponsored capitalism. It’s taken the best of the American system by investing in the private sector but maintained firm government control and direction, such as developing innovative technology. This Chinese Communist Party economic model centralizes power and removes the market “inefficiencies,” such as competition, labor regulation, and multiple choices.
The United States business sector has all the tools it needs to bolster our competitive edge. But it needs a boost from Washington.
Business needs certainty to plan for the future. That means that our elected officials need to speak to each other, even if they disagree, and be prepared to compromise for the good of the American people. The lines of communication must remain open.
Congress and the administration are taking steps in the right direction by having ongoing conversations to negotiate the debt ceiling. For those conversations to be successful, they need to find common ground so the United States can meet its obligations at home and around the world. They also need to strategically examine both the spending and taxing side of the government’s balance sheet that’s contributing to our ongoing debt accumulation.
Right now, the United States is spending more than it’s taking in. All corporations and individual households on a budget know this isn’t sustainable. In a period of rising interest rates, it will further crowd out spending on infrastructure, the military, education, and other key areas.
Nobody’s going to get 100% of what they want, but it all starts with an open-minded, collaborative conversation in the same room.
Together, we can build a path to a brighter future for this great Nation by coming together as a country and keeping our capitalist system front and center.