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The message from Washington this week that Dr. Larry Summers, President Obama’s chief economic advisor, will return to Harvard after the mid-term elections signals an opportunity for the President to revamp his economic policies and institute fundamental changes in his administration’s relationship to the business community.
Further rumors indicate that the President is considering appointing a leading chief executive to this essential post. In this regard his actions would parallel U.K. Prime Minister David Cameron’s appointment of HSBC Chair Stephen Green as minister of state for trade. Green’s charge is to attract international investment and drive growth in the country's exports – precisely what the U.S. economy needs, along with a heavy dose of innovation and private investment.
With the exception of Treasury Secretary Tim Geithner, Obama’s entire economics team is turning over, less than two years into this administration’s term. Preceding Summers’ departure were budget chief Peter Orszag and Christina Romer, chair of the council of economic advisors. Given the persistently high jobless rate and slow growth of the economy, the timing is right for the President to undertake a thorough review with a new team to develop a new set of pro-growth policies.
The President’s original team did a good job in stabilizing the U.S. economy with government spending and stopping the bleeding in terms of job losses and personal bankruptcies. However, it is been largely ineffective in stimulating private sector growth, jobs and innovation. As a result, the economy has stagnated, relying too heavily on the Fed’s monetary policies and massive deficit spending. These moves were intended to drive consumer spending, but with 26 million people still looking for full-time jobs, they obviously are not working.
It’s time for a sharp change in direction: the President should pivot to a new set of policies aimed at “Investing in America” to unlock corporate spending and stimulate hiring in the private sector.
His recent proposals on Labor Day were encouraging. The President offered a 100 percent deduction for capital investment until the end of 2011, an increase in research and development tax credits while making them permanent, and an additional $50 billion in infrastructure spending. All three initiatives suggest the President’s thinking is finally moving toward private-sector investment and job creation, and away from trying to cure the economy’s ills entirely with Keynesian approaches to massive deficits.
It is none too soon. A new economics team can give the Obama presidency – which inevitably will suffer significant reductions in November in its enormous Congressional majorities and possibly the loss of House leadership – a much needed shot in the arm.
This situation is similar to President Clinton’s challenge in 1994 after the Republicans’ mid-term gains swept them into House leadership. Clinton brought in Republican presidential advisor David Gergen, who helped him reshape the remaining six years of his presidency. After that, President Clinton relied more heavily on Treasury Secretary Robert Rubin, who masterfully guided the U.S economy to its strongest growth period in the last fifty years. Clinton’s policies shifted to the center, as he often co-opted Republican opposition in Congress. They won the confidence of the business community and stimulated private-sector spending. Twenty-three million jobs were added as corporate growth and profits surged.
Ironically, in those days no one ever complained about tax rates being too high. Small wonder: unlike the last decade with Bush’s tax cuts, personal earnings and capital gains under Clinton were exceptional, buoyed by the strongest stock market in fifty years. As a result of low unemployment, high individual earnings, and strong corporate profits, tax receipts surged and the U.S. government actually produced a surplus for three consecutive years! That’s a sharp contrast with the enormous deficits compiled by the Bush and Obama administrations in the past decade. Who says deficits don’t matter?
I have longed argued that President Obama needs a savvy business leader in the White House, advising him on a daily basis. With Summers’ pending departure, he has his opportunity. The good news is that there are many strong candidates from which to choose. However, the position must have adequate authority and influence to get chief executives to give up their current positions to serve their country, just as Henry Paulson did in 2006. Here is my short list of recommended candidates, all of whom are current or former CEOs:
Anne Mulcahy, Xerox: She did a remarkable job in saving Xerox from bankruptcy and restoring Xerox’s innovative spirit. She has also served on an important set of corporate boards so she knows how corporate leaders and board members think. (Full disclosure: we served on the Target board together for nearly a decade.)
Eric Schmidt, Google; John Chambers, Cisco; John Donahoe, eBay; or John Doerr, Kleiner Perkins: All four are extraordinary innovation leaders who could refocus the U.S. economy on R&D, innovation, and creativity that will add sustainable jobs for the next decade.
Ed Whitacre, General Motors: Whitacre a spectacular job did in turning around General Motors with his practical, no-nonsense style. If the President wants to reinvigorate the mainstream of American companies to get back to growth strategies, Whitacre is the perfect person.
Jeff Immelt, General Electric: It would be very hard to get him to step down from GE, but like Whitacre, he is a tremendous mainstream executive who has been a big advocate of manufacturing in the U.S.
Jamie Dimon, JP Morgan Chase: He has done a tremendous job in successfully guiding his bank through the economic meltdown of 2008-09, incorporating Bear Stearns and Washington Mutual, and positioning JP Morgan for future success. He knows Wall Street as well as anyone and would also be a superb Treasury Secretary if Geithner decides to follow Summers in stepping down.
That’s a fulsome list for the President to choose from. All of these CEOs are strong individuals who can hold their own in the political in-fighting in the White House and in Congress, yet all have the long-term vision and courage to rebuild the strength of the U.S. economy.
If the President has the wisdom to choose one of them and take their advice, his next six years could rival Clinton’s for economic success. For the long-term health of our country, let’s hope he does so.
I was recently asked by the editor of The Economist to participate in an Oxford-style debate* on the question, “Has President Obama Been Good for Business?” Originally asked to take the negative response to this question, the editors later shifted me to the positive side.
As readers of my blogs and columns know, I have been critical of the Obama administration for neglecting to focus on jobs and investment in America and for failing to build closer ties to business, as well as having no business people on the White House staff or in the cabinet. My comments in The Economist debate notwithstanding, I still believe that the President needs to pivot to the economic center and focus on investment, trade, and jobs. His recent pronouncements provide encouragement that he understands this and is moving in this direction, even before mid-term elections.
In my challenge to argue that the President has been good for business, I started with the situation he faced upon taking office in January 2009. Through my research I realized that his administration has made enormous progress in less than two years in restoring stability to the U.S. economy and addressing long-standing problems through multiple initiatives like financial services reform, automobile competitiveness, health care, government-funded research, and restoring America’s infrastructure.
That said, much remains to be done to ignite the domestic economy, re-establish confidence in the business community, and create sustainable jobs. This is where President Obama should focus his efforts in the next two years. Having a new economics team that understands investment and jobs is a major step in the right direction.
I hope you will enjoy The Economist debate.
* Economist Debates adapt the Oxford style of debating to an online forum. The format was made famous by the 186-year-old Oxford Union and has been practiced by heads of state, prominent intellectuals and galvanizing figures from across the cultural spectrum. It revolves around an assertion that is defended on one side (the "proposer") and assailed on another (the "opposition") in a contest hosted and overseen by a moderator. Each side has three chances to persuade readers: opening, rebuttal and closing.
Posted Sep 20, 2010 by Bill George |
Filed in: Leadership
This summer I read four very important leadership books that I commend to you for your fall reading. You may not see them on the best-seller lists, but let me assure you that all four have more substance and depth than most of the books on those lists. All of them are written by extraordinary leadership scholars whom I have known for many years.
Here are my recommended books, followed by my thoughts on each of them:
Driven to Lead: Good, Bad and Misguided Leadership (Paul Lawrence)
Professor Emeritus Paul Lawrence was one of the dominant leadership thinkers of the 1960s and 1970s. He was my professor at Harvard Business School in 1965-66. Years later, he and Professor Jay Lorsch (also one of my mentors) wrote Organization and Environment: Managing Differentiation and Integration, a breakthrough book in 1986 that described the shape of emerging organizations. Now 85 years old, Lawrence has spent the past decade attempting to develop a comprehensive theory of leadership, something no leadership scholar has ever accomplished.
To formulate his theory, Lawrence has gone back to Charles Darwin’s second book, Descent of Man. There he discovers what he argues are Darwin’s real theories about the evolution of the species. In the Introduction, he cites Darwin’s famous quote, “It is not the strongest of the species that survives, nor the most intelligent. It is the one that is the most adaptable.”
Lawrence describes how the leadership brain is evolving to have the capacity to integrate the four drives of man – security, material acquisition, bonding, and comprehension – into an integrated, holistic decision-making process. He proposes that this is the capability that effective leaders must have in order to deal with all the pressures they are under and resolve them to make effective decisions.
Lawrence’s notion of the four drives is not new. He and Nitin Nohria, the new dean of Harvard Business School, presented this idea in their 2002 book, Driven: How Human Nature Shapes Our Choices. Unfortunately, these ideas never caught hold because they were overwhelmed by the economists’ theories about people being driven only by material acquisition, which conveniently aided their mathematical modeling of human behavior.
Lawrence describes the leadership brain which has the capacity to evolve leadership abilities and decision-making. His hypotheses are very consistent with the breakthrough scientific work of Dr. Richard Davidson. Davidson uses fMRI technology to test the evolution of the neo-cortex with meditators to develop increased self-awareness and self-compassion. These new research findings are demonstrating that these portions of the brain can be evolved, even in as short a time span as eight weeks. Thus, neurological scientists are moving away from the notion of the entire brain being hard-wired to recognize how it evolves, which they term neuro-plasticity.
Throughout the book Lawrence attempts to apply his emerging theories to practical situations, with greater and lesser success. In some ways we should consider this work as an evolution in the thinking of a great scholar, not a finished product. Nevertheless, it is a most important step in understanding leadership and leadership development at much deeper and more scientific levels than have been previously attempted.
Still Surprised: A Memoir of a Life in Leadership (Warren Bennis)
In contrast to the scholarly depth of Lawrence’s work, Bennis’ memoir is a delightful journey through six decades of the evolution of a great leadership scholar and, literally, the field of leadership itself. Bennis has been my mentor for the past dozen years and has served as conceptual editor for all my books, which like Lawrence’s recent work have been published as part of Jossey-Bass’ Warren Bennis Series.
Bennis breezily navigates through seven decades of his adult life and introduces the reader to myriad leadership scholars such as Douglas McGregor and Erik Erickson, with whom he worked earlier in his career. He shares openly his frustrations with being a university president (at the University of Cincinnati), his exploration jaunts to teach in Switzerland and live on a houseboat in Berkeley, and his multiple marriages that ultimately brought him back to his first true love and current wife, Dr. Grace Gabe.
As we accompany Bennis on his personal journey, we get to see first-hand the evolution of a great leadership scholar, who has legitimately earned the title of “The Father of Leadership.” Along the way we learn how the field itself has gone from fledgling efforts to a dominant area of both academic and practical focus. Bennis has the unique ability to span both arenas without compromise.
Yet he never loses his humility or his humanity. He remains throughout a gentle soul, a mentor to many, and a guiding light to all who seek his wisdom. In the words of his tribe, he is indeed a mensch.
Rethinking the MBA: Business Education at a Crossroads (Srikant Datar and David Garvin)
In 2007 Srikant Datar and David Garvin, two of my most distinguished colleagues at Harvard Business School, undertook a two-year field study of leading business schools throughout the world that led to this most timely study of the current state of MBA education. Unlike many of the critiques of graduate business schools, which devolve into more of a polemic than a rational analysis, Datar and Garvin have undertaken extensive field research, including an in-depth examination of leading MBA schools, interviews with their deans, and extensive discussions and interviews with leading business executives.
With compelling logic, the authors make a persuasive case that “it is indeed time to rethink the MBA.” As a result of decades of increasing focus on economics-based disciplines, they argue that “the center of gravity of MBA education shifted strongly toward ‘knowing’ and away from ‘doing’ and ‘being.’ We believe it is now time to rebalance the scales.” They assert that “a number of critical managerial and leadership skills are simply not being taught fully or effectively. . . Remedying these deficiencies will require a substantial shift in pedagogy away from lectures and greater use of reflective discussions, practical exercises, personal coaching and experiential learning.”
For anyone interested in educating business leaders for the future, this book is a must read.
Handbook of Leadership Theory and Practice (Edited by Nitin Nohria and Rakesh Khurana)
This collection of 26 essays by world-renowned leadership scholars is edited by two of my closest colleagues at HBS, Nitin Nohria, the new dean, and Rakesh Khurana, whose seminal work, Higher Goals to Hired Hands, set the stage for the current rethinking of business education. Its 800 pages are not light reading, nor is this book for everyone. But it has already gained widespread readership among people interested in what constitutes genuine leadership, the theories underlying leadership, how effective leadership works in practice, and how it is evolving in today’s context.
It is the caliber of the authors of these essays, and their contrasting and complementary points of view, which makes this collection so valuable. Its deficiency, if there is one, is that there is no integrating thesis that pulls all of them together, nor is there presented a generalized theory of leadership, such as Lawrence has developed. These efforts must be undertaken in a future work with tomorrow’s scholars that build on these very valuable ideas.
Taken as a whole, these four books are setting the stage for the revolution that is underway in the understanding what constitutes effective leadership and how leaders are taught and developed. Placed in an historical context, the timing could not be better for this revolution to take place, nor can it happen fast enough.
I am very excited to share with you information about a new leadership course that I will be leading for executives on the HBS campus, along with Dean Nitin Nohria and a terrific faculty. Called “Authentic Leadership Development,” it compresses the popular 12-week MBA course I created in 2005 into five days. It will be held on February 12-18, 2011. Joining us on the faculty will be Professors Rob Kaplan, Joshua Margolis, and Scott Snook.
This course is aimed at rising executives who want to develop their leadership and are prepared to participate openly in discussing their leadership journeys, their crucibles, and the challenges they face. The course will draw on my book, True North, along with exercises drawn from Finding Your True North: A Personal Guide. We will focus on the leader’s inner journey and ways to improve your EQ and self-awareness in order to become a more effective leader. In addition to personal reflection exercises and class sessions, you will be part of a 6-person Leadership Development Group.
Here is the link to the course on the HBS executive education website with all the registration information.
I sincerely hope you will consider coming and recommending it to your colleagues and friends.
Originally Published in BusinessWeek on September 9, 2010
With 26 million people unable to find full-time jobs, Americans are outraged by disparities in pay between executives and average workers as real incomes continue to decline. Multimillion-dollar bonuses at American International Group (AIG) and Merrill Lynch (BAC) certainly didn't help. Two consecutive years of declining CEO pay, on the other hand, haven't either.
As a result, politicians are lining up to give shareholders greater control over executive pay. On the surface these changes sound like shareholder democracy, which would be a good thing. But rather than solving problems with executive compensation, they may result in myriad unintended consequences.
Case in point: The Dodd-Frank Wall Street Reform and Consumer Protection Act grants shareholders advisory votes on compensation, allows activist shareholders with only 3 percent ownership to nominate board members, and prohibits voting by retail brokers representing small shareholders. These changes are likely to empower short-term money movers such as hedge funds at the expense of long-term owners—and pressure management to focus on the short term, which is the exact opposite of what's needed.
In another example of good intentions not adequately thought through, The New York Times called on the Securities and Exchange Commission to publish ratios of CEO pay to "typical employees," ignoring variations between industries. What about businesses focused on low-wage emerging markets? What about differences between high-wage software developers and low-wage service companies?
Imposed formulas for executive compensation simply won't work at many companies. And we've seen how powerful the temptation can be for executives to manipulate short-term results to increase their compensation.
The regulations that will spring from Dodd-Frank are still being written. In the meantime, rather than just responding to pressures, boards and CEOs have a shot at restoring the confidence of the public by crafting responsible compensation policies unique to their needs. Doing this now will give U.S. companies an edge in fending off investors who are in it for the quick kill. It will also raise their odds of holding on to the top talent whose pay is the target of all this debate and ire.
Here are six policies that should be rigorously followed, including in bad times when boards are more prone to bend the rules for those in their top ranks:
1. Provide full transparency for compensation policies and actual practices. Principles and pay policies should be consistent over time. Novartis (NVS) has been the forerunner in Europe by making its compensation practices fully transparent.
2. Create policies that reward long-term performance with long-term pay. ExxonMobil (XOM) withholds more than two-thirds of its officers' compensation until they retire or for 10 years, whichever is greater. This focuses executives on long-term results and provides for sound succession.
3. Reward executives for their performance, not the company's stock price. Target (TGT), for example, compensates its executives based on same-store sales performance relative to its peers.
4. Lengthen the time horizon for bonuses. Companies should withhold significant amounts of compensation using restricted stock, with forfeiture for accounting adjustments and leaving the company. In 2009 the top 30 officers of Goldman Sachs (GS) received no cash, getting bonuses in restricted stock with three-to-five-year vesting periods instead.
5. Avoid formulaic approaches. Compensation tied only to short-term metrics leads to long-term problems. Companies should include qualitative performance measures like strategy implementation, research milestones, and leadership development. To make its shift to "leading by values" relevant, IBM (IBM) includes bonus opportunities for furthering its values, especially in global collaboration.
6. Boost equity between workers and executives. People with greater responsibilities should receive greater compensation, but one way to signal that everyone matters is to drop special plans, benefits, and perks for executives. Medtronic (MDT) gives employees a "means to share in the company's success" by enabling them to become shareholders through company-funded employee stock ownership plans.
To rebuild trust and negate the impact of restrictive regulations, corporate boards must develop compensation systems that reward all employees fairly and are applied consistently. This will focus leaders on long-term value creation and give boards a solid footing from which to defend their policies. It might even enlighten policymakers as they figure out how to put Dodd-Frank into practice.
Originially Posted in Harvard Business School Working Knowledge
September 7, 2010
Asian beliefs, philosophies, and practices are influencing everything from the way we treat the ill to how we make cars. Now, a Harvard Business School professor is looking to the East as a model for developing strong business leaders.
William George, an expert on leadership development, recently teamed with Tibetan Buddhist meditation masterYongey Mingyur Rinpoche to present a conference on "mindful leadership," a secular process to explore the roles of self-awareness and self-compassion in developing strong and effective leaders.
"To our knowledge, this is the first time that a Buddhist Rinpoche and a leadership professor have joined forces to explore this subject and see how Eastern teaching can inform our Western thinking about leadership and vice versa," George says. You can read George's summary of the Mindful Leadership conference on his Web site.
For George, leaders who don't develop self-awareness are subject to becoming seduced by external rewards, such as power, money, and recognition. They also have difficulty acknowledging mistakes, an Achilles' heel that has crippled a number of CEOs who have appeared in the news recently.
We have set up a forum for readers to give their own ideas on this concept and to ask Professor George questions.
Sean Silverthorne: Tell us about the Mindful Leadership conference. What were the goals?
Bill George: The Mindful Leadership conference, which was held in Minneapolis August 13-14, 2010, brought together 400 participants in an exploration of how mindfulness can contribute to sustaining effective leadership. The seminar was co-led by Yongey Mingyur Rinpoche, a leading Buddhist meditation master, and myself.
Its goal was to bring together Western understanding about leadership and Eastern wisdom about the mind, developed from practices that have been used for thousands of years, to contribute to the self-awareness and self-compassion of leaders.
Q: What is mindful leadership, and what are its benefits?
A: Mindfulness is a state of being fully present, aware of oneself and other people, and sensitive to one's reactions to stressful situations. Leaders who are mindful tend to be more effective in understanding and relating to others, and motivating them toward shared goals. Hence, they become more effective in leadership roles.
Q: How does one become mindfully aware?
A: I would not claim to be an expert in this area. Our Mindful Leadership seminar focused on the practice of meditation as one of those ways, with a variety of meditation techniques taught by Rinpoche. This was strictly a secular teaching, not a Buddhist one. In my experience I have observed people become more mindful through prayer, introspective discussions, therapy, and the use of reflective techniques and exercises.
Q: You have said that few leaders lose their jobs because of lack of intelligence, but many do so because of lack of emotional intelligence. Can you talk about this a little more and give some examples.
A: Leaders with low emotional intelligence (EQ) often lack self-awareness and self-compassion, which can lead to a lack of self-regulation. This also makes it very difficult for them to feel compassion and empathy for others. Thus, they struggle to establish sustainable, authentic relationships.
Leaders who do not take time for introspection and reflection may be vulnerable to being seduced by external rewards, such as power, money, and recognition. Or they may feel a need to appear so perfect to others that they cannot admit vulnerabilities and acknowledge mistakes. Some of the recent difficulties of Hewlett-Packard, British Petroleum, CEOs of failed Wall Street firms, and dozens of leaders who failed in the post-Enron era are examples of this.
Q: The two essential aspects of effective leaders, you explain, are self-awareness and self-compassion.
A: An essential aspect of effective leaders is authenticity; that is, being genuine and true to one's beliefs, values, and principles that make up what we call someone's True North.
Authenticity is developed by becoming more self-aware and having compassion for oneself, without which it is very difficult to feel genuine compassion for others. Self-awareness starts with understanding one's life story and the impact of one's crucibles, and reflecting on how these contribute to motivations and behaviors. As people come to accept the less-favored parts of themselves that they do not like or have rejected, as well as learning from failures and negative experiences, they gain compassion for themselves and authenticity in relating to the world around them.
Q: How does the work you are doing in this area align with your concept of "True North"?
A: In our work on True North and in teaching authentic leadership development to students and seasoned leaders, we have learned that the greatest challenge to following one's True North comes when the pressures and seductions are intense. That is when it is most crucial to be self-aware.
This of course is not a new idea. Self-awareness is central to Daniel Goleman's emotional intelligence. It is relatively rare to find people who are fully self-aware. Mindfulness is a logical step in this process of gaining self-awareness that should be combined with experiences in leading through challenging situations and gaining awareness through feedback and group support.
Q: I know you are a strong believer in group support in the development of leaders. Can you talk a bit about how group support differs from mentorship, for example?
A: Mentorship is a one-to-one process with someone who has greater experience and is willing to share from that experience. Group support as practiced in True North Groups consists of a small number of peers (usually five to eight) willing to share themselves and their lives and support each other through both good and difficult times. A key element of these groups is learning to give and receive nonjudgmental feedback in order to recognize blind spots, accept shortcomings, and gain the confidence to address great challenges in their lives.
Q: Do you think business schools should be paying more attention to this subject?
A: Any business school committed to developing leaders needs to offer courses and other experiential opportunities that enable students to develop greater awareness of themselves, their motivations, and their strengths and shortcomings.
This process is most effective when real-world experiences can be reflected upon to deepen self-understanding in a supportive and trusting environment. This is the central tenet of the Authentic Leadership Development (ALD) course at Harvard Business School, which will soon to be offered to leaders as part of the School's Executive Education offerings.
Q: If HBS Working Knowledge readers want to learn more about mindful leadership, which resources would you recommend?
A: Current literature on this subject is limited because the ideas are still in the early stages of development. I highly recommend Jon Kabat-Zinn's book Wherever You Go, There You Are and his CD Guided Mindfulness Meditation, and Yongey Mingyur Rinpoche's books The Joy of Living and Joyful Wisdom. In the ALD course at HBS, we use my book True North and its companion workbook, Finding Your True North: A Personal Guide.
Q: What are you working on next?
A: I am working on a book on peer support groups with Doug Baker that is tentatively titled "True North Groups: The Vital Link." These groups are based on the Leadership Development Groups we use at HBS and the groups Doug and I have participated in for more than 25 years. Many of the ideas we explored in the Mindful Leadership conference will be covered this book.
Kudos to President Obama for taking the initiative to create jobs, especially in the private sector. After declaring the end of the combat operations in Iraq, he made three crucial announcements on Labor Day that will go a long way in creating jobs and putting the domestic economy on the front burner.
In rapid-fire succession on the campaign trail, the President made the following announcements:
- New business investment will get a 100 percent tax write-off, beginning September 8, 2010 and running through the end of 2011. This incentive should unleash a great deal of pent-up capital spending. Most importantly, it will result in sustainable private sector jobs.
- Research and development tax credits will be increased and made permanent. There have been R&D tax credits in the past, but they have been temporary, and their renewal has always been subject to the whims of Congress. With the President’s proposal, business leaders will feel secure making these long-term investments. The new products and ideas unleashed by this expanded R&D tax credit program will create new jobs and new companies for years to come.
- The Obama administration will invest an additional $50 billion in government-funded infrastructure projects, also fueling new jobs.
Most importantly, these three announcements, coming on Labor Day, signal that the President and his closest advisors recognize the depth of the jobs crisis and are prepared to act aggressively to create sustainable private-sector jobs. That’s good news for all Americans.
Thus, it was disappointing to learn that Republicans and certain leading business lobbyists are already challenging this proposal. Their preference is to extend the upper-class tax cuts pushed through by President Bush. Although no business person likes paying taxes, these targeted moves to increase jobs should be applauded by leaders throughout the business community. It’s the most important move the President has made in his 20 months in office – and he deserves full credit for taking the initiative to “invest in America.”
With 26 million Americans unable to find full-time jobs, this isn’t a time to play election-year politics. It is a time when every elected representative should support the President’s initiatives and help get Americans back to work.
President Obama’s announcement last night that America’s combat troops in Iraq are coming home is good news indeed. After the tragic loss of 4,400 lives of our most courageous citizens and $1 trillion in spending that could have been used here at home, seven and one-half years of agony from a war that never should have been started is finally coming to an end.
Sadly, our troops are coming home to a country whose economy will not have jobs to offer them. With 27 million Americans unable to find full-time work, these loyal veterans will have to stand in long lines for jobs or shift to the unemployment rolls.
Let the metaphor of our veterans coming home be a message to the 300 million Americans, myself included, who have never been to Iraq. It is time for us to “come home to America.” With the Labor Day holiday approaching, we need to get our citizens back to work.
The strength of our great country is in its free-enterprise democracy that enables anyone with a good idea to start a company or anyone with a modicum of skills and a willingness to work hard to reach the top, even in the largest corporations.
These days, we are not creating jobs for people, nor does the start-up capital exist to enable the Steve Jobs and Bill Gates of the future to get funding to bring their ideas to fruition. Instead, we educate brilliant foreign students and force them to go back to India or China to start their companies, while encouraging our best and brightest Americans to get rich by trading commodities on Wall Street.
With the troops coming home, America needs to come home to its senses and its roots. The time is right to stop nation-building overseas and start nation-building here at home. Let’s stop financing foreign governments with imports and start financing our people with jobs and opportunities – not in government-funded jobs, but in a vibrant private sector that generates profits and personal income, and pays taxes to reduce our mounting national debt.
How can we do this? It won’t be by driving consumers to spend money they don’t have. People without jobs, or afraid of losing their jobs, aren’t in the market for new houses and new automobiles. They have to repay the credit card and mortgage debts that are already weighing them down.
Contrary to what the politicians tell us, there is no “quick fix” to this dilemma. Nor is the economy gradually improving, as we’ve heard from the economists for the past 18 months. By not investing here at home for the past decade – in research and development, in manufacturing, in infrastructure, in education, in new company startups, in small business – we have created long-term structural problems. We must face the reality that long-term problems require long-term solutions.
What are these solutions? How can we rebuild the competitiveness of the U.S. economy by investing in America?
While President Obama is meeting with his economic advisers looking for ideas, here is the comprehensive investment program that is needed to reignite private sector investment and create the millions of jobs that will get Americans off the unemployment rolls and back to work:
- Provide private-sector investment accelerated tax credits at double the current rate to stimulate factory and building investments,;
- Double tax credits for increases in research and development and make them permanent to accelerate creativity and innovation,;
- Offer hiring credits for small businesses with 50 or fewer employees to jumpstart small business hiring--where 70 percent of the jobs are created—;
- Offer a capital gains tax holiday for start-up companies the first time they are sold to stimulate new company formation,;
- Create a government “fund-of-funds” to funnel money into venture capital without picking winners or losers to provide more funding for new companies,;
- Expand government infrastructure funding for the next three years to rebuild America’s roads, bridges and public buildings,;
- Offer tax credits for expanding exports to reduce our growing balance of payments deficits,;
- Announce a comprehensive program of energy development here at home that includes both renewable and non-renewable energy sources to reduce energy imports;
- Change the Washington rhetoric to encourage corporate profits and provide certainty for investments by suspending additional regulations and ceasing the threats of additional taxes on corporations to get corporate leaders to start investing their $1.8 trillion in cash here at home.
As a nation, we cannot let our current political malaise stand in the way of making America competitive once again. The time to act is . . . now!
