Above, watch the full conversation about sustaining economic growth.
*This article originally appeared on the AIF Blog.
The recent turmoil in the financial markets has prompted much discussion about the increasing interconnectedness of global markets and its effect on the United States economy. But when a panel of experts at the 2015 Aspen Ideas Festival sat down to discuss how to sustain American economic growth, the focus was almost completely on domestic problems and solutions. And all agreed that big innovative ideas from the private sector are needed to lead, with strong support from government and a game-changing rethinking of America’s economic future.
Financial Times US Managing Editor Gillian Tett asked the panelists — Sen. Mark Warner (D-VA), Southern Company Chairman and CEO Tom Fanning, and Markle Foundation CEO Zoë Baird — for their biggest ideas on economic policies that could be rolled out in the near future. Here’s how Tett framed the current economic situation and her questions.
Warner, who was a venture capitalist and technology investor before running for public office, had three policy ideas he suggested could give the economy a short-term boost:
- Avoid another fiscal crisis resulting from “the stupidity of sequestration”
- Find a permanent source of funding for investment in infrastructure
- Work toward tax reform
Prompted by Tett, Warner said the probability of those things happening is “north of 50-50.”
Fanning, who in addition to leading Southern Company also chairs the Federal Reserve Bank of Atlanta, shared that he is “very optimistic about the economy.”
“I think we have darn good cards to play,” he said, adding that the United States has the opportunity to be energy secure and to be a net energy exporter. But it needs to do more to get there.
“We need to build the infrastructure, build the pipes so we can create an unassailable advantage relative to any other economy on the planet to grow jobs, restart manufacturing, and grow personal incomes to make American lives better,” said Fanning, who also suggested that the US government should completely revamp its tax policies, reduce its costs, and deal with entitlements.
Baird, whose Markle Foundation addresses issues in health, national security, and the economy, suggested that there needs to be more forward thinking and a bold, defined vision for an American economy that’s in the midst of a historical transformation by technology and globalization.
“We can grow many more good jobs in America,” said Baird, whose three big ideas are:
- Focusing on service-sector exports
- Figuring out how to use technology to increase growth
- Creating a skills-based marketplace rather than the increasingly obsolete diploma-based marketplace
As far as the government’s role is concerned, Baird suggested that change happens faster when led by the private sector, but government has a critical role to play by being obligated to direct resources to the right areas to help. Fanning said the government should stand more out of the way with less regulation, and Warner suggested that the federal government should stop cutting its domestic discretionary fund, which funds things like education and the energy sector.
Noting that under the current federal budget, the domestic discretionary fund has been lowered from 18 percent to 9 percent, he asked, “Would you ever invest in an enterprise that spent less than 10 percent of its revenues on workforce, plant equipment, and staying ahead of the competition, which for government is education, infrastructure, and R&D? That is a faulty business plan in a global economy.”
For more in-depth discussion on this topic, watch the full session here.