On government’s role in getting the economy moving

The government's role in restoring a healthy economy is primarily to get out of the way and to reduce the economic dead-load of taxes and excessive regulation.

In the very same way that the energy required for a rocket or an aircraft to gain altitude increases as the affect of gravity increases, so too do taxes and regulation increase the “energy” necessary to make the economy rise.

Therefore, half-measures must be avoided entirely. Half-measures will produce tepid or, worse, no improvement, while allowing political critics to say, "We've tried your ideas, and they didn't work."

The reforms introduced must be bold, courageous, determined and, yes, some will be painful, as well.

• Some economic activity presently based on government interventions (e.g., subsidies, artificial demand) will cease to exist.
• Initial price-jumps following the removal of interventions that were, in fact, or worked effectively as price controls will be unavoidable. Thankfully, the removal of some interventions will bring price decreases, as well.
• Changes in the value of the U.S. Dollar are likely to occur. Protecting the U.S. economy against currency values being artificially manipulated by other nations (such as the Chinese Yuan) is not wrong as long as the protection imposed is directly correlated to the amount of manipulation in the estimated true value of the currency.
• Recognition that disparities in income and wealth are normal, natural and actually function as a healthy stimulus to production and the growth of the economy is essential and should be articulated to the voters in a clear way.

When legislation is proposed, the changes and the impacts of the changes must be announced and explained in advance. The long-term vision must be reiterated. The reason for the change must be clearly defended against every onslaught from the opposition, and then the effects of the changes must be "survived" as reality sets in.

The costs the people must bear during the readjustment of the economy should be shared as widely as possible by implementing measures that are clearly articulated as "temporary" to ease the transition. Otherwise, the fragile political support of those suffering the temporary pain of the readjustment will be lost.

Telling the truth and not promising things that cannot be delivered is the only safeguard to the credibility of the reforms and of the officeholders who see that the reforms are imperative to our nation's full recovery and restoration.

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A political strategy for real recovery

The required systemic transformation of our now much-corrupted American republic cannot be simply an exercise in applied economics nor an application of political science. It must be understood that these changes will involve real human beings and will affect their day-to-day lives.

In the short-term, the dramatic, but necessary, changes will create new groups of “winners” and “losers.” I say, "short-term" because, as the market re-balances itself as government interventions are removed and taxes are reduced, the "short-term" losers will still be long-term gainers through economic growth, the return of prosperity, lower unemployment, a sounder dollar, and rising wages.

Nevertheless, the relative political and economic strength of various so-called “special interest” groups will shift as the transformations occur. And, in order to be successful, you—as the leaders—must clearly formulate, clearly articulate and, indeed, "sell" these necessary changes to the voters with a positive and compelling vision for the future. (By “successful” I mean, here, having the practical ability to create and maintain sufficient political capital to keep the restoration of the republic moving forward.)

The first and most important task must the formulation of a unified vision within the political caucus itself. Every member must learn to speak with the same voice, reinforce the same concepts, and deliver the same positive vision in every public discourse. The vision must be straightforward. It cannot be "fuzzy." And, it must motivate. It must effectively move the hearts—not just the heads—of men and women in the center of political spectrum.

Doing this will require clarity in both “yes” responses and “no” responses to the questioning press and electorate. The clear, articulate, well-considered answers must be stated in an "ideal" form—as a “visions”, while acknowledging that reaching the ideal will take time and will require a process.

Most importantly, the vision must clearly reject all the apparent alternative means and half-measures or you will have lost your path. Half-measures will never do the job.

In fact, half-measures are worst of all, because following the failure of half-measures (and they will fail) the public—and your opponents—will say, "We've given you your chance; we've given your methods a try; and we are little improved. Now, we'll do it our way." You will have squandered your cache of political capital.

It will be necessary to make temporary accommodations for the those who see themselves as "losers" in certain transformations (e.g., public sector employees, trade unions, entitlement recipients and more). While this is necessary, make it clearly understood why it is necessary and why such accommodations are temporary. Then stick to your guns.

Remember: "Selling" the vision is much more difficult and complicated than it first appears. It will require you and your team to address the people directly and clearly; to present your arguments compellingly and with conviction; and to be prepared to defend against the arguments that will naturally be cast against your vision. Every possible argument that might be set forth by your opponents in the press or at the polls must be anticipated and a rational, succinct response prepared. Doing this will require careful planning, considerable forethought and no small amount of endurance.

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We'll never build a lasting economic recovery...

"The fact is, we'll never build a lasting economic recovery by going deeper into debt at a faster rate than we ever have before." -- Ronald Reagan (1976)