We need to focus on the critical levers for economic growth along with sources of revenue to help pay for it, as well as ways to overcome the short-term thinking currently baked into government policy and business protocols
The American Prosperity Project - a nonpartisan framework for long-term investment
How to encourage companies and the American nation to engage in more long-term thinking
A new initiative on the topic of long-term investing is the recent American Prosperity Project, an initiative spearheaded by the Aspen Institute, to encourage companies and the American nation to engage in more long-term thinking. In an article in The Atlantic it said:"There are a few reasons why short-termism has become more prevalent in America. There’s a growing culture of analysts and traders obsessing over a company’s quarterly performance, and panicking if a company posts poor quarterly results. This culture has been enabled by the availability of information about companies on the Internet and television, but it has also arisen because traders’ compensation is tied to how their holdings perform every year."
The signatories of this project find that: "The time is right for a national conversation about long-term investment in infrastructure, basic science, education and training for workers who feel the brunt of globalization and technology. We need to focus on the critical levers for economic growth along with sources of revenue to help pay for it, as well as ways to overcome the short-term thinking currently baked into government policy and business protocols."
The ideas offered in this document have been developed under the auspices of The Aspen Institute in consultation with a non-partisan working group of experts in public policy formation, tax and regulation, business, and corporate law and governance. While these ideas enjoy support across party lines, breaking the log jam and taking action will require a coalition of leaders across the private and public sectors who are committed to the health of the commons and America’s prosperity. Amongst the signatories is SHIFT TO's Dominic Barton.
The American Prosperity Project is a nonpartisan framework for long-term investment. It has three goals:
- Focus government investment on recognized drivers of long-term productivity growth and global competitiveness—namely, infrastructure, basic science research, private R&D, and skills training—in order to close the decades-long investment shortfall in America’s future. Building this foundation will support good jobs and new business formation, support workers affected by globalization and technology, and better position America to address the national debt through long-term economic growth.
- Unlock business investment by modernizing our corporate tax system to achieve one that is simpler, fair to businesses across the spectrum of size and industry, and supportive of both productivity growth and job creation. Changes to the corporate tax system could reduce the federal corporate statutory tax rate (at 35%, the highest in the world), broaden the base of corporate tax payers, bring off-shore capital back to the US, and reward long-term investment, and help provide revenues to assure that America’s long-term goals can be met.
- Align public policy and corporate governance protocols to facilitate companies’ and investors’ focus on long-term investment. Complex layers of market pressures, governance regulations, and business norms encourage short-term thinking in business and finance. The goal is a better environment for long-term investing by business leaders and investors, and to provide better outcomes for society.
Although these goals defy seemingly intractable politics-as-usual, they are broadly shared across a wide spectrum of leaders in both public and private sectors. The ideas outlined here have many sources and they require more conversation, debate, and action to reach the targeted outcomes of creating good jobs, encouraging innovation, and combatting economic short-termism.