America’s leaders aren’t leading — and the damage is mounting. Citizens have complained for years about Washington’s squabbling children, who’d rather stamp their feet and hold their breath than resolve momentous issues of economic policy. The games are childish, but the resulting suffering is serious: Millions can’t find work, confidence withers, growth slows and the self-reinforcing upward spiral that makes an economy grow can’t get going — largely because our supposed leaders won’t grow up.
You may have heard such generalities before, but consider this specific: The chief executive of a Fortune 50 industrial firm with operations in 180 countries told one of us recently that the prospect of the year-end “fiscal cliff” of tax increases and federal spending cuts means that “we’re already holding back on things we’d otherwise be doing. I could show you a list.” He doesn’t want to be identified, for obvious reasons. But his list represents economic growth that isn’t happening because Washington’s leaders prefer playing inside-the-Beltway chicken to dealing with a potential economy-crushing problem less than five months away. So the U.S. hobbles on, its gross domestic product growth having slowed from a feeble 2 percent annual rate in the first quarter to 1.7 percent in the second.
(John Nickle/For The Washington Post)
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Yet U.S. economic policy isn’t being meaningfully discussed in the presidential campaign. The addition of Rep. Paul Ryan (Wis.) to the Republican ticket brought the issue more airtime, but we aren’t counting on a substantive discussion breaking out, just candidates endlessly repeating their talking points.
Our Fortune colleagues have sought for months to get Republican presidential nominee Mitt Romney and President Obama to share, in detail, their plans for reviving the economy. Our boss, feeling frustrated by the candidates’ lack of specificity, asked us to propose a policy outline that we believe would serve the nation well. In doing so, we emphasize that stability is at least as important as policy.
In Washington’s immature world of extremes, where “compromise” is a synonym for “treason,” crises don’t get resolved until the last, looming moment, as with the 2011 debt ceiling embarrassment and possibly with this year’s fiscal cliff. And major policy shifts such as health-care reform pass without bipartisan support. When Standard & Poor’s announced its historic downgrade of America’s credit rating a year ago, it explained that the move “reflects our view that the effectiveness, stability and predictability of American policymaking and political institutions have weakened.” Managers, investors and consumers have no idea what’s next, what will last, and what will be reversed after the next election or perhaps after the next news cycle. Result: a CEO’s on-hold list, multiplied across the country.
America needs more than just smart moves to get a struggling economy moving. We have to increase tax revenue and reduce spending growth. Most important, we have to give neither side everything it wants — to adopt policy so relentlessly bipartisan that it attracts strong, stable support from both sides. Believe it or not, that has been the norm in U.S. history, even though fundamental disagreement between the parties is eternal. Former senators George Mitchell and Bob Dole, grown-ups who led the Senate’s Democrats and Republicans, respectively, in the 1990s, had dinner together every week and successfully did business. They also held each other in the highest personal regard and still do. Today, however, researchers at Princeton and the University of Georgia find that Republicans and Democrats in Congress are further apart than at any time in the 120-year period they studied.