Denver Business & Economics Council - September 12,1995
By Jim Gibson
It is my sincere wish that we will have a very productive debate this afternoon on the role of government in the economy. We should be focusing on new realities rather than old dogmatic rhetoric. Our differing visions should be on the economic future of our country and state, rather merely a rehash of old arguments from a prior era.
Nevertheless, even historically, it has not been a question of whether government has a role or no role in the economy. Despite the current myths, history tells us that government was a significant player when the American republic was conceived. Everyone recognizes that Alexander Hamilton believed in a specific place at the table for the public sector, but even Jefferson, known as the intellectual giant behind laissez-faire, developed federal land policies and emphasized public infrastructure.
The Founding Fathers had no dogmatic commitment to the unregulated marketplace. Their legacy is rather a blend of private and public initiatives known in our day as the mixed economy.
More recently, reasonable people agree that the GI Bill played a large role in creating and strengthening the middle-class after World War II. Government made home ownership and higher education, realities for veterans and their families.
As a result, the real question before us this afternoon is not whether there is a role for government in the economy, but rather, what should it be? We must avoid the false arguments of role or no role because, as we move from the Industrial Age to the Information Era, voters justifiably tired of those arguments and increasingly are convinced that both traditional liberalism and conservatism are irrelevant.
Current conservative economics is especially irrelevant. For those of you who don't understand Republican economic policy, it is really based on the noble principle of equality - the rich and poor will get the same amount of ice. The only caveat is that the poor get theirs in the winter.
Now that we are free from false ideological and historical baggage, we can begin to freshly approach and aggressively tackle the economic challenges of our time. We need to develop new and innovative public initiatives that address the real issues of the economy and the concerns of our people:
Blinding Speed of Technological ChangeTough Transition from an Industrial to Information EconomyGlobal EconomyGrowing Gap between the Haves and the Have-NotsThe real issue of the 1992 and 1994 elections - stagnating incomes Successful economies have excellent workforces, high levels of investment and world-class infrastructures. Let me put a specific Information Age strategy on the table that does not require new taxes.
At the federal level, we must ruthlessly cut the $225 billion of tax and spending subsidies in the budget that serve powerful corporate interests. Just from that cutting alone, we will be adding by subtracting.
It is the competitive and innovative industries that are generating the well-paying jobs. Obviously, eliminating government handouts to these companies will only make them more competitive and innovative.
The second step is to take that savings and apply them to productive public investments and deficit reduction to spur private investment. The need for deficit reduction is obvious - let me make the case for specific public initiatives at the national and state levels - first to develop the workforce and second to upgrade our infrastructure.
We should invest in initiatives like Head Start for disadvantaged children so they can begin elementary school ready to learn. We must nurture the competition and deregulation of public education through charter schools and rigorous voluntary standards. Despite the petty political antics of the Republican Congress, we should expand national service which provides college tuition support for young people willing to give something back to the community. We also need to closely link non-college bound high school students to employers, especially in high-tech manufacturing.
And, maybe most importantly, we must help those already in the workplace.
While we must continue to promote free trade, we must recognize that the global economy is creating opportunities for well-educated "knowledge workers" but is also undermining the security of less-educated employees who face low-wage competition from developing nations. This nation must achieve two very important interconnected goals - enhancing worker opportunity and maintaining domestic support for free trade.
Let me be specific. Federal and state governments should scrap the failed hodgepodge of costly employment and training programs designed for the Industrial Age and replace them with a new learning enterprise controlled by its customers rather bureaucrats. Workers should be given a choice of providers and armed with information on occupational standards, provider performance and job opportunities. To empower them further, we should create Individual Development accounts, tax-favored savings that workers could draw upon to upgrade their skills.
Finally, we must further develop and maintain the transportation and communication systems which bind our markets and people together. 37 percent of the nation's interstates are only in fair condition or worse. The percentage in Colorado is even higher.
Now there's a progressive economic plan thus breaks us out of the current dismal debate and provides real promise to increase job opportunities and boost stagnating incomes. Let's hope my colleague's plan intends to do the same.