How to Renew America’s Economy
This country – and much of the world economy – is in a backwards slide that must be reversed. Many leaders in corporate America today, including me, have ideas on the biggest challenges we face and the best solutions. I shared my own views on this recently with the National Association for Business Economics in Washington, D.C., of which our Chief Economist Gene Huang is president.
To revitalize our economy and build opportunity for current and future generations, we must:
• Reduce our reliance on imported petroleum;
• Combat overregulation; and
• Revitalize business through tax reform, education and training.
Next year marks the 40th anniversary of the Arab Oil Embargo, yet we haven’t come close to curbing our addiction to foreign energy. We’re pumping nearly $300 billion a year out of our domestic economy for imported energy sources. On top of that, we spend more than $70 billion annually on military protection of petroleum supply lines. It adds up to trillions of dollars in lost purchasing power that could otherwise fuel the American economy.
As a global airline, FedEx has no choice today but to use imported oil. But we’ve also committed to reducing that dependence through more energy efficient aircraft and building our fleet of all-electric and hybrid-electric trucks. We’re working closely with U.S. manufacturers to drive down cost so your local pizzeria can afford one too. We also support continued research and development of biofuels. They’re already technically viable in both vehicles and aircraft; now we need to make them cost-competitive.
The next step to revitalize America’s economy is combating overregulation. Often, regulations grow out of abuses, real or perceived. But some regulations are so complex or outdated that innocent bystanders, especially small- and medium-sized businesses, get hurt.
Study after study quantifies the cost and productivity losses from overregulation. It doesn’t seem like a coincidence to me that some of the fastest growing sectors of the American economy are the newest and least regulated ones, such as the tech industry. Could that be, at least in part, because there hasn’t been time to write too many regulations for them?
I believe that if we stand by and do nothing, over-regulation will only get worse. And the cost will be paid in slower economic growth.
Finally, we need to revitalize business – large and small – here at home. The first step is reducing the corporate tax rate, currently the highest in the industrialized world. Lowering it will increase incentives for companies to invest and create jobs in the U.S. That also frees up resources for these businesses to invest in research and development, expansion and capital expenditures – all activities that directly stimulate the economy and lead to job creation and stability.
But that job creation benefits no one if we can’t train our people in the skills that are needed. At FedEx, we’ve faced this challenge first hand and work with local community colleges to train aviation technicians and technology specialists. We need more of this type of practical education and skill development offered in America’s community colleges and training institutions, because without it our fellow Americans will be woefully unprepared to take on the well-paying, high-demand jobs in our near future.
It’s time to follow the advice of one of the greatest Americans, General George C. Marshall, who said, “Don’t fight the problem, decide it.” Let’s all tell our leaders to get back to the business of leading this country, making the hard decisions, not just the popular ones. Let’s stop debating and make some decisions to renew America’s economy.
Also take a look at Mr. Smith’s guest blog at Forbes.