America works best when government creates a stable environment for competition.

Oct 31, 2011
WSJ

By JIM MCNERNEY

America works best when American business and government complement one another: Business plays the vital role in economic expansion and job creation, while government oversees the environment in which business can innovate and compete. This approach fueled prosperity for generations and produced the world’s largest and most powerful economy. We seem far adrift of that ideal today.

Washington’s political gridlock and volatility threaten to derail an economic recovery that wants to take flight. Observers are right to perceive a collective failure to govern, and that perception creates costly uncertainty for job-creating American businesses.

The regulatory climate is a perfect example. A tsunami of new rules and regulations from an alphabet soup of federal agencies is paralyzing investment and increasing by tens of billions of dollars the compliance costs for small and large businesses.

No one wants to discard truly meaningful public-safety or environmental regulations. But what we face is a jobs crisis, and regulators charged with protecting the interests of the people are making worse the problem that’s hurting them most. Regulatory relief in the energy sector alone could create up to two million new jobs, and we won’t have to borrow a penny to pay for it.

In the view of business, America retains tremendous strengths. But absent a clear change in course, no one should be surprised if some companies ultimately invest abroad, creating jobs beyond our borders that could have been based here. This doesn’t have to happen, but an increasingly skeptical business community needs proof Washington can put America on a sustainable fiscal footing and promote economic growth.

A critical first step lies immediately ahead in the deficit-reduction mission of the congressional super committee. Business will watch the outcome closely. It will be a key indicator of whether political leaders can deliver when confronted with profound challenges.

The penalties for failure would be both real and symbolic. The immediate penalty (automatic spending cuts that would kick in if no agreement is reached) would create more hardship and job losses. Failure would also symbolize continuing political dysfunction in Washington and portend at least another year of the same until the 2012 election.

For the good of the nation, our elected leaders must now find it within themselves to pass sound laws, regulate judiciously, and put aside escalating tactical political battles. If the super committee succeeds, the White House and Congress should build on the momentum and:

• enact comprehensive, pro-growth tax reform that benefits everyone;

• proceed with regulatory reform; and

• reform and restructure existing entitlement programs.

Some will dismiss these prescriptions as the same tired lines from business. Others, rather than offer solutions, may take another opportunity to demonize all businesses for the part a small few had in contributing to the recession. But political leaders must rise above the vitriol and focus the country on the future.

Without that focus, America will lose over time an essential strength based on economic might. Countries cannot just coast on the successes of the past. And failure to govern wisely means losing out in the global competitive struggle.

Businesses know how to create jobs, create value, and win in a diverse global market. Even with an unsteady economic recovery, most business leaders believe the fundamental engine of American business is sound.

Washington needs to draw from that optimism. A key test will be the success or failure of the super committee. The outcome will tell us much about near-term prospects for America’s ability to grow, invest, and create jobs for the workers that need them.

Read more at: http://online.wsj.com/article/SB10001424052970203554104577003933737463986.html?mod=WSJ_Opinion_LEADTop

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