Wednesday, March 12, 2014
For decades we've been arguing over how to grow Maine's next economy. We've pushed and pulled and lurched from left to right, stalemated by philosophical differences over the role of government in the economy. The lasting results have only added to a general discouragement about our ability to get things done in Maine.
Nothing is likely to change until we find more common-ground approaches to growing the economy, and that can't happen until we're ready to re-examine some cherished old assumptions and acknowledge that nobody has all the answers.
The gulf between the two parties in Maine, on the economy, has never been wider than it is today. Republicans seem to believe that if it weren't for government we'd all be gently swinging in hammocks in the Garden of Eden, enjoying figs and fresh wine. Their plan is simple: Make government smaller and taxes lower, which will then free up individuals to start more new businesses and expand existing ones.
Republicans believe that we can cut our way to prosperity. "Investment" is a dirty word. If their idea worked, of course, states like Alabama and Arkansas would be world powers, and big spenders like the Germans would be in bankruptcy.
Democrats, meanwhile, have another set of problems. They don't think about the economy as much as they should, instead relying upon an unabashed faith that government is the true engine of change and progress. The size of the economic pie doesn't seem to matter nearly as much as how equal the slices are. They're content to let someone else worry about baking that pie, and then criticize both the chefs and the recipes.
Too many Democrats are still enamored by the 1930's New Deal, as though the Great Depression never ended. They tend to confuse massive public spending on "stimulus" projects with an economic strategy. Another group still clings to the LBJ formula for attacking poverty, which is to do it not with jobs but with government programs. Both Presidents Clinton and Obama have worked to introduce new Democratic ideas for the economy that do more to support businesses, but both have been constrained by those cherished and older frameworks within the party.
The Democratic game plan for prosperity is also simple: expand public employment and increase spending on infrastructure, education and training, social programs, health care and a myriad of ideas that tend to redistribute resources to protect the general good.
Democrats believe we can invest our way to prosperity. "Cutting" is a dirty word. If larger government produced greater prosperity, as they believe, the Soviet Union would be a world power today, and Greece and California would be in the black.
That isn't to say that either party is entirely wrong. In fact, they're both about half right. Republicans are right when they say that government resources are not going to expand, that we need a more frugal government and that government doesn't create lasting jobs, except in government itself.
Democrats are right when they say that no modern economy can grow without a forward-looking education system, efficient transportation and communications infrastructure, effective social safety nets and longer-range research and development spending. They're also right when they say that prosperity doesn't simply grow because businesses are unleashed, but in some ways because they aren't. Unbridled capitalism has a long history of overdoing things when left unchecked. It devours itself until only a few titans are left. It exploits resources until they are depleted, then moves on. It has too often used workers and consumers in the same way.
So what can Maine's leaders do to find common ground and move toward bolder collective action for a new prosperity? Here's my crazy idea: Why don't we all start working on a plan for Maine's next economy that acknowledges both the limits of what government can do and the value it can bring? It would be a plan that, in the best Maine tradition, values both frugality and investments equally, as any successful enterprise does.
We could think of it as a "Save-to-Invest" strategy, and here's how it would work: Every dollar saved by making government smaller and more efficient would be added to our investments in education, infrastructure and support for small businesses through research and development.
Nobody says that would be easy, or that we have the skill or leadership to make it happen, but it's exactly the kind of grand bargain that can get us unstuck and moving again.
Alan Caron is a principal of the Caron & Egan Consulting Group in Freeport. He also serves as the President of Envision Maine, a nonpartisan organization that promotes Maine's next economy. He can be reached at email@example.com.