I have developed many strategic plans for success during my 40-year business career, but the one I am about to present for the nation is the most humbling. Business strategic plans have to capture the keys to profitability and growth. This national economic vision must capture the keys to prosperity for everyone who has a desire to achieve his or her American dream.
It starts with education, then a job, and then a career.
People who achieve “success” are able to get beyond day-to-day survival. They find a way to thrive, constantly looking for that next exciting opportunity. This thrive attitude can be rekindled here in this great country, because we have the resources, the ingenuity and that spirit of America that has allowed us to survive during hard times and thrive when times are better.
Although our public education system has its flaws, we have seen time and time again pockets of excellence where students have defied the odds, when given a chance, to go on and find that elusive success. These exceptions along with the many private- and home-schooling success stories are the nucleus for rekindling a results-driven economy.
As my dad and others showed during their generation, a good dose of common sense can go a long way to supplement any deficiencies in formal education if the opportunities are there for people to better themselves.
For nearly 15 million people, that ladder of opportunity is not there right now. They can’t find a job. By unleashing the full economic potential of our economy, we would ensure there would be a job for every home and a career opportunity from every job.
This economic vision must start with some economic guiding principles (EGPs). As the saying goes, if you don’t know where you are going, you won’t get there. We know where we are going. We’re headed to a thriving land of opportunity.
EGP #1: Production must precede consumption
You can’t spend your way to prosperity. The Obama administration has shown this. Most families knew that it would not work because it does not work for a household. My dad had to produce enough cash for a down payment to buy his first home before he could get the keys to the new house. He had to work three jobs at times to produce enough cash, but he did it!
Production is the engine of any economic train, and consumption is the caboose. Before someone consumes, he must produce. The nearly $1 trillion in stimulus spending went into the caboose. It did not help fuel the real engine of the economy.
The engine of our economy is the business sector. It has received only disdain and lectures from the Obama administration, instead of fuel in the form of lower taxes, fewer barriers and more certainty about less government. (Specifics will follow in next week’s commentary.)
EGP #2: Economic growth is the result of risk-taking
The entrepreneurial spirit drives economic growth. Risk-taking is the expenditure of time, effort, resources, capital, creativity, energy and passion, all with the expectation that it will pay off, but with no guarantee it will do so. At the risk of his health, my dad worked three jobs with not enough sleep and rest, and little recreational time. He used the only kind of equity he had: sweat equity. It paid off for him. He achieved his American dreams.
Risk-taking is also the willingness to invest your capital in the ideas of others. It is the lifeblood of our economy. A capital gains tax is a wall between people with money and people with ideas. Remove the wall and more ideas will get financed, and more jobs will be created. It is the spirit of America.
When the economy is not growing, we must reduce the impediments to growth and increase the incentives for risk-taking. Regulatory burdens, trade restrictions and policy uncertainty all make it more difficult for an idea to get off the ground and the result is less economic growth.
EGP #3: Measurements must be dependable
Imagine what life would be like if we had to wake up in the morning and check the newspaper to find out whether an hour was still 60 minutes, whether a foot was still 12 inches or whether a pound was still 16 ounces.
The economy would be filled with too much uncertainty and eventually become dysfunctional. But that’s exactly what is happening with the most important financial unit of measure in the world, the dollar.
It took my dad 12 years to save enough cash to buy that first house. He did it with the expectation that the value of the dollar would be pretty close to what it was when he started saving. It was, because this nation did not have the deficits we have today, which is forcing inflation and a weaker dollar.
The most solemn pledge a government can make to its citizens is to maintain the value of the currency. The third EGP states that units of measure must be dependable. Dramatically reducing our national debt is the key to stabilizing the value of our dollar.
Concluding note
Prosperity is the natural state of our free-market economy if we get government out of the way, off our backs and out of our pockets. Prosperity begins with production. It requires risk-taking and a stable measure of exchange.
Good economic policy is guided by good principles, not politics.
It’s common sense.
Herman Cain, the former CEO of Godfather’s Pizza, is a Republican candidate for president.