Mobil Political Ad: A platform in search of a candidate (Mar, 1988)
Huh, this sounds exactly like the platform of a certain political party, no?
A platform in search of a candidate
Many a political pundit has noted that people generally vote their pocketbooks. They tend to elect the candidates they believe capable of steering the nation toward better times—more jobs, a higher standard of living, and the achievement of both personal aspirations and national goals.
Now, in the midst of the presidential campaign, we’re listing some points that are often overlooked in all the speechmaking, but bear directly on America’s economic health—a platform in search of a candidate, so to speak. In a nonpartisan spirit, and with profound respect, we urge that the next President:
• Make it his top priority to bring the budget deficit under control. The deficit poses a clear and present danger to every living American, and to future generations who will have to pay today’s staggering debt. The budget deficit is inexorably linked to the trade deficit. The latter offers clear evidence that America is simply using more goods and services than it produces, importing the difference, and borrowing to pay the bill.
Much of the borrowed money comes from abroad. This requires high real-interest rates in the U.S. to keep attracting foreign funds. As a result, foreign companies often can raise capital in their own countries at cheaper rates than their U.S. counterparts, and use the money for the new plant and equipment that translates into greater productivity. So American industry is placed at a competitive disadvantage in world markets, and fewer jobs for Americans are created.
High U.S. interest rates also mean high mortgage rates, making it more difficult for Americans to afford the homes they want, with enough left over for other necessities such as the education of their children and adequate medical care.
A prime way to narrow the deficit is to curb government spending. Between 1974 and 1987, government outlays rose from 19 percent of GNP to almost 23 percent. A cap on government spending as a percentage of GNP should be enacted to roll back this gradual rise, or at the very least keep it from climbing more.
• Raise levies on consumption—the money people spend—rather than from taxes on money earned, if the need for new revenues proves absolutely inescapable. Such a tax could be written to ease the burden on those least able to pay. Furthermore, it wouldn’t penalize American business, which is precisely what higher income taxes do. A consumption tax would also tap into the vast underground economy, and make taxpayers out of those who now escape the income tax.
• Encourage increased productivity in the private sector. American productivity—output per hour—lagged badly in the 1970s and earlier in this decade. This country is still playing catch-up. In the final analysis, increased productivity is the key to a higher standard of living, and to achieving balance in the nation’s trade statistics.
One way to boost productivity is through more research by the private sector. (Japan spends only slightly more of its GNP for R&D than does the U.S., but, unlike Japan, much of America’s R&D spending reflects its commitment to a strong defense.) The existing tax credit for R&D is scheduled to expire at the end of 1988. It should be extended. We also favor the current proposal to permit the allocation of at least 67 percent of a U.S. company’s research expenses to domestic income, for purposes of the foreign tax credit.
• Take a zero-based look at all existing regulations, including environmental regulation. Some regulation is necessary, but it should also be cost-effective. In the ’60s, regulatory zeal cost the nation millions of dollars that could have gone into plant and equipment, but didn’t. Industry simply can’t afford needless expense that brings minimal benefits, because such outlays act as a brake on productivity and make it more difficult to compete internationally. An Economic Impact Statement should be required before any regulations are enacted. Such a statement should include an examination of international competitiveness.
• Shun protectionism. Nothing would stifle the economy—and turn “better times” into a mockery—faster than trade barriers and global economic warfare. There must be recognition of the fact that America’s economy is part of a vast, interdependent global system. At the same time, we should insist on fair trade—reciprocity—among all trading partners. The current GATT negotiations offer the best vehicle for meeting these goals.
Unfortunately, when a candidate mentions the word economics, eyes sometimes glaze over and a fearful epidemic of yawns may erupt. But “better times is an acceptable euphemism—and the platform we suggest will surely help bring them about.