More than five years after the Great Recession began, businesses are on track to add more jobs this year than in any year since 1999. The economy is headed in the right direction again – but are we doing enough to lock in strong, consistent future growth?
In a series of speeches this summer calling for a “better bargain”, President Obama is making the case for taking the long view on investments in our future, like infrastructure and education. We must, the President argues, focus on a “long-term American strategy”, evaluating opportunities through the lens of long-term competitiveness, not a 3-month political timeline.
Crucially, the President is asking Americans to take a business-like approach to government. Like any successful company would, we must make investments today if we expect growth tomorrow.
We’ve learned the hard way that there are consequences to building an economic expansion without a solid foundation. At the start of the last decade, lawmakers sought to use deregulation and tax cuts to boost the economy. But the economic expansion from 2001 to 2007 resulted in the weakest job creation of any post-World War II expansion. During that time, incomes were stagnant, manufacturing declined, and poverty went up. Then, in 2008, the economy collapsed.
Now, with a durable recovery underway, the President is calling on Americans and their representatives in Congress to take a different approach. The key to long-term prosperity, he argues, is making investments that give employees more skills, entrepreneurs more opportunities, and middle-class consumers more confidence.
That’s why the President is doubling down on policy proposals like making high-quality pre-school available to all American children. Long-term investments made in educating our children today will pay dividends in American competitivenesstomorrow.
The President’s renewed focus on long-term growth comes at a difficult time for the global economy. The IMF reports that growth is slowing and unemployment is rising around the globe. Economists are increasingly worried that the Chinese economy, having exhausted the benefits of rapid urbanization, is hitting a wall. And the European economy continues to struggle, with self-imposed austerity dragging down already anemic growth.
The modern economy, shaped by technology and still fragile from the far-reaching Great Recession, is increasingly vulnerable to shocks. A meltdown in Europe, or a sharp reduction in growth for emerging economies like China, would have disastrous ripple effects in the U.S. The stakes for building a sound foundation for future growth at home are high, given that a number of external factors could re-start crisis conditions for the economy.
The immediate growth prospects for American businesses are strong. The stock market has more than doubled since its recession low-point. Corporate profits are at their highest level of all time, and business investment, which is growing faster than in the previous recovery, is the highest since 2008. But without a long-term strategy for American competitiveness, businesses will be unable to sustain this growth. American businesses need a better bargain.