Good morning.
The Aspen Institute this morning is releasing a set of recommendations for encouraging long-term economic growth (click here for the report), and combatting what it calls “short-termism.” Top of the list are measures to increase investment in infrastructure, education, and research and development. The report cites OECD numbers showing the U.S. now ranks only 10th in the world in R&D spending, and China is set to surpass the U.S. in basic science research investment by 2019.
Some of the proposals are already on the to-do lists of the President-elect and congressional leaders. For instance, the group emphasizes the need for infrastructure investment of $200 to $260 billion a year. It also calls for a modernization of the corporate tax system to encourage long-term investment by lowering the corporate tax rate and eliminating special-interest tax breaks.
But some of the proposals will certainly raise Republican eyebrows. The Aspen group proposes a Financial Transactions Tax of “a fraction of 1%” to slow down high-speed trading and encourage long-term investment. It also proposes a carbon tax, to create the incentive for reducing emissions that contribute to Climate Change.
Those signing the report include a number of CEOs, including George Barrett of Cardinal Health, Dom Barton of McKinsey, Paul Polman of Unilever, Phebe Novakovic of General Dynamics, Ian Read of Pfizer, Martin Sorrell of WPP, Chip Bergh of Levi Strauss, Greg Case of AON, and Stan Bergman of Henry Schein.
With the new administration arriving in Washington next month, expect a flood of this sort of policy briefs. But this one deserves a look, as a thoughtful focus on a serious problem – the short-term focus of American business and economic policy.