ECONOMIC REVIVAL & JOB CREATION A STRATEGY

PETER BEARSE, Ph.D., International Consulting Economist

Independent-Conservative Reagan-Republican Candidate

to represent New Hampshire’s 1st Congressional District

Economic development is dynamic. It does not arise from a “Plan.” Rather, it is a Strategy that builds upon and amplifies the bottom-up, innovative and entrepreneurial dynamics of a competitive, advanced industrial economy. A Member of Congress should advance program and policies to maintain the U.S.A. as the #1 incubator of enterprise and innovation worldwide. Any strategy falls into two parts, “Macro” and “Micro.”

MACRO means national fiscal, monetary and trade policies. Such approaches should create a national environment to encourage entrepreneurship and innovation. These in-clude:

þ     Restore fiscal discipline.

þ     Reform and simplify the tax code to replace the income tax.

þ     Increase investment in large, long-term infrastructure building and improvement projects.

þ     Free up and expand international trade -- on playing fields leveled through tough negotiations.

þ     Reduce the costs of health care [unlike Obamacare].

þ     Reform our immigration laws. Besides enabling enforcement by state and local authorities, permit more both low-skill and high-skill (especially scientific and technological talent) workers to arrive here legally as guest-workers with a path to citizenship.

MICRO means decentralized (sub-national) private, public and public/private policies, projects and programs to promote and assist entrepreneurship and innovation by state and local authorities, potential and actual entrepreneurs, businesses, schools, inventors and others. They would include:

v     Entrepreneurship education and training: Vastly expand these at all levels and via multiple venues: from elementary school through college, in businesses via “intra-preneurship training” and through business plan competitions, among other ways.

v     Promote business “incubators”, “accelerators” and “innovation centers”. These provide affordable space, facilities and support services for new, start-up enterprises. The term “incubator” has been borrowed from hospitals. Here, it means nurturing baby businesses until they are able to leave the incubator to grow and create significant numbers of jobs.

v     Speed the business start-up process. Here in the USA, it takes 6 days compared to 1 day in New Zealand.

v     Assist new technology-based manufacturing start-ups to help rebuild America’s diminished industrial base. During the start-up phase, they require more space than non-manufacturing start-ups, plus access to costly technologies, equipment and other resources.

v     Cut some slack to students with entrepreneurial tendencies who otherwise, burdened by high amounts of student loan debt, may opt for a “secure” position in a corporate job-slot rather than take the risk to be their own boss.

 

v     Provide tax credits to “angel” or other investors in new ventures who would be willing to keep their money in new or early-stage enterprises for at least five years. Such commitments facilitate business building during the typically early but also fruitful job-creating years of new enterprises. Studies show that 64% of net new job creation overall in the U.S. is due to businesses 5 years old and younger. 

v     Reward innovation via competitions that provide significant prizes.

v     Cut paperwork and red tape -- to shorten start-up times and minimize the negative impact of government regulations on business development -- the costs of which are typically much higher for small businesses than big businesses.

v     Pass an energy bill to cut our dependence on foreign energy and help build a world-competitive alternative energy sector. To avoid the failures of the ‘70s in this area, such a bill should put a price on carbon emissions.

v     Revamp the Small Business Innovation Research Program to favor innovators over proposal writers.

v     Create local investment institutions, ways and means to enable a truly “bottom-up” approach to economic development whereby local people can invest in the develop-ment of their own communities. These include Community Development Finance Institutions, Joint Municipal/Private Security Offerings, and royalty or micro-finance.

v     Use labor subsidies to assist new business formations. These include extensions or additions to basic unemployment insurance benefits,

By contrast, the Democratic approach of the Obama Administration is top-down statism relying on centralized planning and industrial policy.  Also by contrast, the others seeking the Republican nomination to Congress offer neither plan nor strategy, just the same-old/same-old mantra of lower taxes and a “free” market. But in a time of war, lowering taxes is irresponsible; and the free market, like freedom itself, is not free.