This letter is sent to you because while, as of June 3, we have yet to find out which of you will be the second senator from Minnesota, we are pretty sure that one of you will be. Right now, that job is all about the economy. Anyone who feels differently should go back to debating whether the Rose Bowl is preferable to the Orange Bowl (which the U.S. Senate did in May).
There is no one in business who does not have well-thought-out ideas on how to reform the American economy. Because I know that both of you are applying yourselves 12 hours a day to economic reform and have not been distracted by the start of a new Senate session and the attendant circus, let me offer a few observations.
The president and other members of his administration have argued that long-term recovery for the country requires major reforms in education, transportation, health care delivery, and energy. That’s only partly true. For example, look at the energy reform measure that is currently being discussed: a cap-and-trade carbon policy. In the intermediate term, this may provide good environmental benefits, but it certainly is not a benefit economically and may in fact represent more of a taxing scheme than an environmental policy. Alternative energy generation is imperative to avoid continued and growing reliance on unfriendly countries, but you should realize that in the short run at least, this represents a tax on the economy.
Similarly, transportation programs (which usually means large mass-transit projects) can be seen as job creating and thus stimulative to the overall economy. While this is true, I would hope that you would favor extensive analysis of the cost of large mass-transit projects, and in particular, whether more long-term jobs can be secured by other expenditures.
Health care reform has become the promise and precipice of many political administrations. I would urge you to resist the constant temptation to buy off large numbers of voters by promising them more and cheaper hospital stays, nursing homes, and prescription drugs. HMOs, imported and competitively bid prescription drugs, and all the other hula-hoop suggestions of the day won’t have any major long-term effects on either the cost or quality of health care. The cost of health care is driven by age and medical utilization rates. But health can be affected by education.
And so, if you’re really serious about the long-term health of the population and the American economy, concentrate your efforts and legislative proposals on improving education.