Barack Obama Should Put Empowerment on His Economic Agenda

Empowerment is the key to economic growth, political analyst Michelle D. Bernard writes.

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Barack Obama has embarked upon a historic presidency. His first priority is the economy, and particularly creating millions of jobs. But he should link empowerment to employment. Success would provide him with a critical substantive legacy to add to his already dramatic achievement.

The U.S. economy tanked last year, suffering the largest drop in jobs since 1945. Many of those losses obviously were caused by the housing crash and financial crunch. But systemic problems also afflict the economy, making America more vulnerable to economic bad times. For decades, the United States dominated the global economy. Real competitors were few. But the world has been transformed, with a more united Europe, rapidly growing China, and developing India increasingly challenging American predominance. Immediately after World War II, we could succeed in spite of ourselves. That is no longer true. Thus, it isn't enough just to create jobs. We need to prepare the American people to fill them. And we need to prepare the American economy to support them.

There is no single, simple solution. Rather, we need to empower the American people by allowing them to make critical decisions. What they need are choices, not dictates. That applies to economics, employment, education, healthcare, and much more.

The starting point should be emphasizing citizen involvement and choice in job creation. Most of the discussion of the forthcoming economic stimulus package assumes government spending and control. However, the president has indicated his support for tax cuts as well. Large tax cuts directed at those who are working to keep America afloat should be the centerpiece rather than an afterthought of the Obama program. For instance, instead of passing cash to the latest private business and state government that come begging, the administration and Congress should suspend the Social Security tax on workers. Everyone would get a benefit—most lower-income people pay far more in FICA than income taxes. Moreover, working people would effectively direct the recovery by choosing where to spend their extra cash. Rather than handing the automakers big checks, make the companies compete for consumers who control more of their own money.

We also need to more effectively prepare Americans for better jobs in the future. That means improving education, which can best be done by empowering families. We are all familiar with the politics of education in the Democratic Party. However, President Obama has already broken the mold. Schools need to be designed with the education of children, not the jobs of teachers, in mind. That doesn't mean denigrating the role of teachers. To the contrary, teachers need more authority and flexibility, and good teachers need to be rewarded for their success. However, that is likely to happen only when families across America have more choices than just one local public school. We can argue about the best means—vouchers, tax credits, charter schools, and the like—but empowering parents who heretofore have been marginalized and ignored is key.

Healthcare, the cost of which usually falls on employers, long has been blamed for the difficulties of American manufacturing enterprises such as the auto industry. The link between employment and health insurance discourages worker mobility. Rising Medicare and Medicaid costs threaten the government's long-term fiscal solvency. The issue is horribly complicated, with almost as many proposals for healthcare reform as there are health insurance policies. The one strategy that will assuredly fail, however, is strengthening the public and private bureaucracies that today pose the primary impediment to better and less expensive care.

Again, the policy should be empowerment, or what today is called consumer-directed healthcare. Obviously, accident victims aren't likely to go out and get competing bids for emergency-room treatment. But the right policies would increase the number and variety of choices of health insurance policies and healthcare providers for patients. This strategy would better match the right care to the right person, as well as make medicine more cost conscious. The result would be a vast improvement over the current system—and would help make American industry more competitive, ultimately increasing the number of secure, well-paying, private-sector jobs.