What’s The Plan?

By Dan Kervick

The politicians always seem to be the last people to get it.   But anyone who actually works in the corporate world knows that the central economic concern these days, the thing that is holding us all back economically, is not uncertainty about tax rates.  They also know the core problem is not frustration with regulation and red tape.  Nor is the problem an epidemic of nocturnal terrors about government deficits.   The problem is this: not enough customers.  And the problem of not enough customers right now is exacerbated by the fact that there is also low confidence that there will be more customers in the foreseeable future.   With low confidence that broad prosperity will return to customers, the willingness to invest and hire aggressively is limited.  And since so many businesses perceive the world the same way, the combined effect of their general unwillingness to hire is persistent high unemployment, and a self-reinforcing perpetuation of the low demand that is the cause of the unwillingness to hire in the first place.

So one thing this country needs is the political determination to act at the national level to inject demand into the economy by putting increased purchasing power into the bank accounts of those most likely to make use of that purchasing power.  But something more is needed.  It is not sufficient to bestow a little temporary stimulus on the economy, because businesses do not invest for the long term in people and equipment just to satisfy a temporary uptick in demand.   A more convincing form of national leadership is called for – something that convinces investors than sustained and durable demand is on the way.

In a period of crisis, insecurity and confusion, people need an answer to one particular question above all others: “What’s the plan?” The crippling stagnation of the present era, in both the US and Europe, is due above all to the fact that we are afflicted with timid, conformist, weak and bureaucracy-minded politicians who serve the decadent status quo and don’t lead.  There is no plan.  The people with capital to invest, and whose ambitions and integrity urge them to seek more than unearned returns from parasitical rent-farming, often don’t know what to do with their capital because no one knows where we’re going as a nation.

Things seem even worse in Europe right now than America, since the Europeans have been following an absurdly destructive policy of attempting to dig out of public and private debt by monkey-wrenching the productive potential of their own economies.  They have been digging their debt holes deeper in the process.  At least prior to the recent French election, European leaders have seemed weirdly captivated by Frau Merkel’s preference for moralistic punishment over continental vitality and activism.   The Europeans still have no plan.  But there is no plan in America either.  Neither Mitt Romney nor Barack Obama, a pair of programmed and detached conformists, each competing with the other to prove he is an emptier suit than his opponent, is putting forward anything that deserves to be regarded as a real plan.

Planning is as American as an apple pie slice-o-matic gadget.  For all the vaunting of ceaseless change, innovation, risk and creative destruction in the official American ideology, real-world businesses crave and thrive on security and predictability, and they organize their activities around strategic plans. Investment projects are often time-consuming and very expensive, and require a substantial commitment of capital. Outside of the financial sector with its casino-borne pathologies, most business managers are not the risk-loving gamblers of legend.   They are cautious and thoughtful managers who seek to minimize risk.  Businesses need more than some reassurance that some potential customers somewhere will be coming into more disposable income. They need more than calls from politicians to let a thousand flowers bloom and to get the national government to get out of the way. They need some clear and reliable ideas about what people will likely be buying over the medium and long term and what they won’t be buying.  They need a national strategic plan.

Consider the national highway system built by Eisenhower or the space program launched by Kennedy.  The highway plan wasn’t just some generic spending or “stimulus” that put money in people’s pockets.  It was that too, but it was more than that.   It was a targeted plan to build particular things in particular places.  The specificity and grandness of the project meant that anyone desiring to build a roadside restaurant, a chain of gas stations, or a residential development knew where to build it. If there is no plan, then people have to sit on their capital and wait until something pops up and a clearer picture emerges.  Similarly, if the government says, “We’re going to be spending billions of dollars on going to outer space,” then an army of potential investors in the ancillary technologies of space exploration has clearer ideas about what they can do to make money and build their enterprises.  People who were thinking that maybe the government would be spending money on something other than space exploration are no longer in doubt. They can get off the dime and act.

Contemporary American politics has become extremely plan averse.  We have a deluded understanding of our own history.  We don’t think of the future as a vividly imagined and desirable goal that we actively choose and then organize ourselves to create.  We now think of the future as an unpredictable, blank vacuum that will only be filled up by the disorderly and radically decentralized initiatives of a million separate entrepreneurs, each doing their own isolated thing.  We think that plans are something that only bad old Communists had, and that real Americans love the way of plan-free spontaneity. This is a denial of our actual history, an extreme ideological disturbance that is probably the result of post-Cold War, end-of-history triumphalism about a fictional land of utterly free enterprise and unplanned spontaneous organization that never existed.

It is no coincidence that the American economy doubled in size during the 1939-45 period.  People certainly knew what the plan was then: a global war to defeat the fascist powers.  If we now choose something equally bold and equally urgent, but decidedly less martial, a plan around which to organize the vast untapped potential of the highly industrious American public over the next decade, we could probably double our economy again, and generate both enormous prosperity and a more equal distribution of that prosperity.

How we distribute the fruits of our industry will be just as important as what we choose to build with that industry, because the grossly unequal distribution of those fruits drains the demand for more fruits out of the most dynamic parts of the economy, and transforms a key source of economic energy into the inert and expatriated savings vehicles and shelters of the already wealthy.  Inequality also destroys the trust and social solidarity that makes people willing to work as a team and makes them desirous of producing things for others as well as for themselves.  A population that feels like a unified and sharing nation sees in the prosperity of others a source of joy and satisfaction, and a motive for action, not a cause for resentment and bitterness.  Social equality builds social health.  So a more equal distribution of wealth must be part of the plan.

Work for everybody must also be part of the plan.  It is absurd and cruel to accept a condition in which tens of millions of proud and needful Americans, ready and willing to work and contribute their gifts and industry to the creation of our future, eager to participate in the national project, are allowed to languish in unemployment and despair as we inflict upon them the dead-end indignity of joblessness.   There is so, so much to be done, and our instinctive sense of the social contract is based on the timeless law of reciprocity: work for reward, reward for work.   The present system of systematic and persistent unemployment is wrong and stupid.   Where the private sector won’t or can’t employ all, the public sector must pick up the slack.  Genuine full employment and guaranteed work for all citizens willing and able to work must be in the strategic plan.

We call ourselves a “developed” country.  But there are no developed countries.  There are only developing countries and declining countries.  A dynamic and developing nation needs a strategic national plan.  Contrary to the dogmas of the laissez faire macro-theologians who infest much the economics academy, an ever- developing nation needs to be willing to get off the strategic fence and pick some winners.   It needs to survey all the things it could do, and then select some things, reject other things, take some national risks, and provide the central strategic organizing theme around which investment can take place in a coherent, confident and effective fashion.

The leaders of thriving enterprises are not free-wheeling spontaneity addicts.  They are thoughtful planners.   And our nation is a grand enterprise that gives thematic and organizational focus to all of the enterprises that take place within it.  So can we finally get over our fanatical and paranoid political hatred of plans?  Drawing up a national plan is not the same thing as penning a roadmap to the gulag.  An activist plan for strategic national investment is not a black helicopter invasion.  Planning some big things does not mean planning everything.   And the highway plan, the space program, the GI Bill and the defeat of fascism were not Communist plots to sap and impurify our precious bodily fluids.

So if you get a chance to talk to one of those programmed mannequins in suits, throw some cold water in his face and ask, “What’s the plan?”  Ask for something real and bold and concrete and vivid and invigorating and inspiring.   Ask for something ambitious enough to match the capacities of an ambitious people.   His head might bobble a bit, but if we ask him often enough, and stridently enough, perhaps he will eventually manage to transform himself into The Man with The Plan.  We can help him out with our own suggestions.  Surely our imaginations are not so deadened by neoliberal passivity that we can no longer think of anything.