In the Nation's Interest

Top 10 Things We Learned at CED’s 2015 Spring Policy Conference

The Committee for Economic Development’s 2015 Spring Policy Conference was held on April 22 and 23 at the Willard InterContinental Hotel in Washington, DC.  CED’s policy conferences are forums for members, senior policy makers, and industry leaders to discuss pressing national issues that are aligned with CED’s core policy areas: the economy, education, global competitiveness, and democratic institutions.  CED convenes these policy conferences twice yearly in order to address these seminal economic issues and advance reasoned solutions from business in the nation’s interest.

While there were many more insights gained from the conference than can be adequately articulated in a blog post, here is a “Top 10” (blog-worthy) summary:

10. For the U.S. educational system to be “successful,” it can’t just enroll and graduate our students.  The system must put them on a reliable path to a productive and sustainable career.  In both State Farm CEO Ed Rust’s keynote on “ensuring a competitive workforce” and in the panel discussion on “business strategies for improving educational attainment,” speakers emphasized that it’s in the business community’s interests to improve the educational system’s performance across the entire pipeline (from pre-K through K-12 and college and ultimately to the workforce).  In addition, businesses need to work more collaboratively with educational institutions to better align supply and demand in the labor market.

9. Economic inequality is a concern—not just for the people at the bottom.  In the session entitled “what does economic inequality mean for the future of capitalism?” speakers referred to inequality as a problem for all of society when it means we’re failing to fully develop and utilize our entire economic, human capacity.  The U.S. should look to our own human capital (i.e., the skills Americans develop through education and training) as an important “economic impact investment.”

8. Not all debt is bad.  But, not all debt is good.  In the U.S. and global debt session, experts weighed in on how much of a problem U.S. public and private debt is for the U.S. economy, and how our situation compares with that in other countries, citing a recent McKinsey Global Institute report.  Economically, it makes sense to go into debt when it enables investments that will pay off strongly and sustainably.  But debt to fund current consumption or an “investment” that isn’t really an investment or has very low return, is likely to be a bad deal—whether we’re talking about the federal debt or an individual’s student loan debt.

7. The judicial system fails to deliver impartial justice when judges are made partial by the elections that got them their jobs.  The session on judicial selection reform revealed how elections contaminate the independence of the judiciary.  When judges must go through high-cost campaigns to get elected, it means that they can no longer be unbiased and are too easily “bought” and influenced by those who contribute to their campaigns.  CED recommends a commission-based appointment approach instead.

6. Engaging in more cooperative and freer trade with other countries would be good for the U.S. economy, but trade arrangements must also support and retrain workers who are displaced in the transition.  The session on trade agreements emphasized the economic gains from trade that could be achieved under more open conditions, but also cautioned that gains in aggregate don’t insure universal benefits from freer trade.  Thus, we must commit to a better education and training system as part of our trade promotion strategy. Improving our educational system would increase the breadth and extent of our economic gains from freer trade and help mitigate the concentrated costs borne by individuals whose jobs have moved overseas.

5. To find bipartisan policy solutions to our society’s toughest problems, we must bring ourselves into open and honest conversations where we’ve checked our partisan labels at the door.  “No Labels” founder Nancy Jacobson and Congressmen Kurt Schrader (D-OR) and Adam Kinzinger (R-IL) discussed how the approach works.  Starting from common ground in a friendly setting helps members of Congress to focus from the start on points of agreement rather than differences to attack.

4. The best “economic game plan” for our country is one that reduces our debt burden and devotes greater resources to much-needed longer-term investments in infrastructure and our human capital.  The unsustainable fiscal outlook is not just a problem because of the level and trajectory of debt as a share of GDP but also because of the opportunity costs involved.  Our deficit spending tends to go toward current consumption rather than to longer-term investments that would boost productivity in a sustained manner.

3. As we kick off a new presidential election cycle, the candidates will likely have to focus on and take positions on longer-term issues more than was the case in the previous two elections. In the “it’s all politics” session, the political pundits agreed that profound and longer-term economic issues will be unavoidable in this election.  With the US no longer caught up in the emergencies of 9/11 or the financial crisis and Great Recession, the candidates are more likely to be forced to address longer-term issues such as fiscal sustainability, the adaptability of the workforce to the “machine age” (technology trends), global competitiveness, environmental policy, and a broader definition of “national security.”

2.  For health care reform to be most effective, we must strike an appropriate balance between taking greater advantage of the efficiency of market-based incentives and preserving the necessary aspects of government’s role.  In our final session on “business perspectives on health care reform,” CED released our new report, “Adjusting the Prescription.”  The report calls for increased reliance on market-based mechanisms to improve quality and reduce costs, but only in concert with a refundable tax credit that will insure universal access to health care.

And the number 1 thing we learned at the conference is…

1. Education is the ultimate root of “supply” in “supply-side economics”—so “education policy” is actually the most fundamental part of “economic policy.”
The need for a better, more effective educational system to help address the myriad economic issues and challenges our country faces was the theme that kept coming up throughout the conference. Whether it was asking about the ultimate causes of inequality and how education could better improve economic opportunity and outcomes, or how trade policy should include an education policy component so all Americans benefit from freer trade, or how the cost-benefit calculation for higher education could be improved, or how health care consumers could be better informed and therefore empowered, the conference sessions clearly underscored “education” as an essential input into our economic capacity and critical determinant of our ultimate economic success.