Finding the road to a healthy economic policy sometimes is a matter of getting behind the wheel the proper performance vehicle. Driving the new Corvette Stingray is as enlightening as it is thrilling. The engine roars to life and propels you effortlessly, while its cylinder deactivation system produces astonishing fuel economy for a car with such unbridled power. Shifts are quick and nearly seamless. The steering is tight and responsive and combines with the rigid yet lightweight body and chassis to produce a glorious driving experience. Magnetic shocks adjust to road conditions in milliseconds, and the brakes are balanced and superb. This slice of driving heaven is made in America and sells for tens of thousands of dollars less than similarly performing foreign exotics.
There is a message in all this beyond the stuff that sets the hearts of car guys aflutter. It is that America retains the capacity to design and build truly world-class products. At one time, that same ingenuity and productivity helped produce a vigorous post-war economy and a thriving middle class. That middle class affluence, in turn, drove up consumer spending and propelled the economy all the more. Today, however, despite still having the world's largest economy, best technology and abundant human and natural resources, we seem to be adrift in the global economy. A lack of fundamental leadership and direction, as much as changing markets, has resulted in shuttered factories, declining cities, deteriorating infrastructure and a widening income gap.
The fact of the matter is, competing and succeeding in a worldwide market requires the development and implementation of intelligent policies and judgments designed to produce the greatest economic benefit to the greatest number of Americans. It does not take an advanced degree in economics to understand that consumers with cash impact the economy in two ways. They make us a bigger player in the world market, thereby increasing our leverage in trade relations, and their domestic spending helps drive the local economy. While calls to address growing income disparity have been labeled in some quarters as socialism, it is simply a fact of democratic capitalism that expansion of wealth begets greater expansion of wealth.
And finding the balance that invigorates the health of the economy in today's world demands a thoughtfully developed strategy. There are competitors that are seriously playing to win, and they often do not play entirely fair. The realities of currency manipulation and vastly under-paid labor require targeted and meaningful responses. America should be using its productivity and consumer clout to influence global economic factors. It should be promoting domestic employment and an American manufacturing base that solidifies the middle class and strengthens communities and our economic foundations. It should be re-developing its core, not allowing it to deteriorate in the name out-sourcing for the sake of cheap products assembled in foreign sweatshops. And it should manage its fiscal affairs so as not to be overly dependent on borrowing or beholden to foreign interests to finance the operations of government.
Much of the blame for our inability to develop a cohesive and effective economic policy can be laid at the doors of the two political parties and the shills for special interests that they have become. Republican fiscal policy remains wedded to the simplistic mantra of cutting taxes and reducing regulations. Such a laissez faire approach has never turned out very well, as the experience of 1929 attests. In fact, Republicans have proven to have little fiscal discipline. The trickle-down economics of the 12 Reagan-Bush years produced the first trillion-dollar national debt, which eventually reached three trillion, while also ushering in the stock market crash of 1987. George W. Bush was the first Republican president in over 60 years to enjoy a Republican majority in both houses of Congress. During that administration, tax cuts, a costly prescription drug benefit in Medicare, two unfunded and expensive wars, and rising entitlement costs turned a $290 billion budget surplus into a $455 billion deficit, nearly doubled the national debt from $5.6 trillion to over $10 trillion, and resulted in an economic collapse.
Democrats, for their part, tend to be fixated on details while ignoring the larger picture. They routinely attempt to address what they see as the negative consequences of an existing policy without considering the need for fundamental changes in the policy itself. As Republicans cling to tax cuts, Democrats cling to safety net issues. This mindset reacts rather than governs and produces well-intentioned half measures. Obamacare is an example of legislation trying to address one consequence of existing policy — coverage for the uninsured — without comprehensive consideration of how health care costs are established, why charges vary wildly from place to place, or whether the system should even be based on employer-provided insurance in the first place. This finger-in-the-dike approach explains why a president elected on a slogan of "change" has produced so little.
Neither of the parties display any capacity to take on the serious issues posed by today's global economy, and, in fact, they now seem entirely incapable of the intelligent deliberation needed for the creation of policy that serves the best interests of the country. Until someone offers true leadership and direction, we will remain adrift in our squabbles. At least us car guys have a place to escape and view the economy as it should be seen by all Americans — from behind the wheel.
Raymond Daniel Burke, a Baltimore native, is a principal in a downtown law firm. His email is rdburke@ober.com.
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