The Economy Can't Wait, Change Friday's Debate: Candidates Should Focus on Economic Priorities
By Newt Gingrich
This week I will bring you up to date on the latest plans for Solutions Day, this Saturday, and spell out the dangers of the Paulson bailout/power-grab plan now being debated in Congress. But first, a word about Friday's presidential debate:
Senator McCain should call for Friday's debate to be about the economy
We are seeing a meltdown in our financial system because our political system - the Congress and the President - has refused to confront how big the challenges are and has refused to enact real change.
We do not need a series of gimmicks and bailouts which leave us weaker and more in debt than ever. We need a serious, pro-growth plan for America's long-term economic health.
The economy is in crisis. The Paulson bailout will fail.
Senator McCain should seize this moment and demand that Friday's presidential debate focus exclusively on a pro-growth economic plan for America.
Foreign policy can be covered in a future debate.
You are invited
This Saturday at the Cobb Galleria in Atlanta, Georgia, we will unveil a four-part action plan for the American economy. You can see it at SolutionsDay2008.com, on DISH Network #219 and DirecTV #577.
This will be our second annual Solutions Day workshop. We will outline solutions for the economy, for energy, for education, and for health.
Why Solutions Day? Because America Needs Fundamental Change, Not Gimmicks and Bailouts
Solutions Day is inspired by our belief that America needs fundamental, long-term change to get on the right track.
One of our greatest challenges is energy security. We need real change in our energy policy to keep most of the $700 billion we send overseas each year for energy here at home. Texas Railroad Commissioner Michael Williams is going to help outline what America needs to do.
In addition my new book, Drill Here, Drill Now, Pay Less, is just out with a comprehensive energy solution.
Michael Williams, Texas Railroad Commissioner, to participate in Solutions Day.
Our New Film, "We Have the Power" Will Premiere
The last part of the Solutions Day workshop will be the premiere of a new documentary film Callista and I have made with Dave Bossie and Citizens United entitled "We Have the Power." The film both points out that we, the American people, have the power to force government to change and we, the American nation, have more energy than any other country.
In addition to energy we are going to deal with fundamental change in education. We're very excited to have former Democratic Governor and head of Ed in 08 Roy Romer join us.
We're also going to show a small part of "Two Million Minutes", Bob Compton's remarkable film about high school in India, China, and America.
Economy, Energy, Education, and Health Will All Be on the Table
The long-term health of the economy requires rethinking our health system. On Saturday the Center for Health Transformation will provide a series of health reform solutions. Former Democratic Vice Presidential candidate Geraldine Ferraro (a cancer survivor) will speak to her passion for ending cancer as a cause of death and suffering and former Senate Majority Leader Bill Frist (a heart-lung transplant surgeon) will also speak.
In addition, NBA star Dominique Wilkins will report on a very compelling diabetes and obesity project underway in Columbus, Georgia, and we will report on a very important Alzheimer Study Group co-chaired by former Democratic Senator Bob Kerrey and with former Supreme Court Justice Sandra Day O'Connor.
Please join us for Solutions Day. You can attend in person Saturday at the Cobb Galleria, or watch on the Internet, Dish TV or to DirectTV. Get more details at SolutionsDay2008.com.
Now to the Paulson Disaster
One of the reasons that Solutions Day has taken on such importance for me is this: We are living through one of the most challenging periods in modern America.
I cannot remember any time in my lifetime when we have had such a combination of big challenges, bad policies, and bad political leaders.
After a summer of failing to solve our energy problems, failing to solve our economic growth problems, failing to get federal spending under control, failing to modernize the health system, we now have an absurd and dangerous proposal to give a former Chairman of Goldman-Sachs $700 billion of our tax money to bail out Wall Street.
Treasury Secretary Paulson had two years to get ahead of the financial problems and failed.
Fool Us Twice, Shame on Us
We were told this summer that when the terrible $300 billion-plus housing-bailout bill passed the Congress it would solve the problem.
President Bush signed a housing bill that gives $500 million a year to ACORN, a very leftwing political organization, because it was going to solve the problem.
Now we are told the next $700 billion spent by Secretary Paulson will solve everything.
No Economic Growth = No Recovery = No End to the Financial Decay
The most important thing to remember is that without economic growth there will be no end to the downward spiral.
Without economic growth there will be another bailout next year and another bailout the year after.
The number one goal should be to restore economic growth.
Only through economic growth can we generate the resources to soak up the bad debt and heal the broken institutions which litter the landscape.
In the 1930s, faced with an immediate crisis of bad debt, the government adopted a series of bad ideas - tax increases and regulatory interventions that allowed the Depression to extend until World War II.
If we're not careful we're going to allow bad politics in Washington to lead to bad policies and the result is going to be a long period of weak growth and massive indebtedness.
In other words, politician, lobbyist, bureaucrat and lawyer generated economic decay.
Pro-Growth or Pro-Decay: Silicon Valley or Detroit as America's Economic Future
The stunning difference between a pro-growth and pro-decay policy was driven home by the three days I spent in Silicon Valley late last week.
While Washington and Wall Street were in a panic, the venture capitalists, entrepreneurs and creators of new technologies, new solutions and new wealth in Silicon Valley were too busy inventing the future to worry about Secretary Paulson.
I drove a Tesla, a new electric sports car that goes 0 to 60 in 3.8 seconds. It is a Silicon Valley invention built in San Jose. It is telling that it was not designed by the old auto world or produced in Detroit.
While Silicon Valley has been creating new wealth, new technology and new products, the city of Detroit has been decaying. In 1950, Detroit had 1,800,000 people and the highest per capita income in the United States. Today Detroit is below 900,000 people (the first major American city to drop below a million) and ranks 62nd in per capita income. Half the housing stock in Detroit is unneeded. Imagine what that does to the value of the rest of the housing supply.
Silicon Valley is a product of a combination of science, technology, entrepreneurship, venture capital and very educated people.
Detroit is the product of two generations of bad politicians, bad bureaucracy, high taxes and crime.
We are at a crossroads between Silicon Valley and Detroit.
The Paulson bailout would move us one step further toward Detroit and a failed future.
Secretary Paulson, Meet Lord Acton
In the mid 19th century, Lord Acton warned that "power tends to corrupt. Absolute power corrupts absolutely." Note that he dropped "tends" in the second sentence.
Secretary Paulson's proposal for a $700 billion grant of power with no legislative oversight and no judicial review is a fundamental violation of Lord Acton's principle. It is an invitation to corruption and tyranny.
If Russian leader Vladimir Putin had written the plan, I would have understood it. But having an American Secretary of the Treasury write such a plan is such a fundamental violation of our constitutional processes that it makes you wonder how Secretary Paulson can serve in the Cabinet.
Danger One: Crony Capitalism
The first danger of the Paulson bailout proposal is that it will create crony capitalism. People who are failing in business will hire lobbyists and curry favor with politicians to protect them from their own mistakes.
You cannot have capitalism on the way up and socialism on the way down.
You cannot create a welfare state for rich investors.
Danger Two: Bureaucratic Capitalism
The other great danger of the Paulson bailout is that to avoid crony capitalism we will create bureaucratic capitalism.
Already there is talk of salary caps and other government regulatory requirements which would drive the "private" out of "private enterprise."
Bureaucratic enterprise is no replacement for free enterprise - it's a contradiction in terms.
The Paulson bailout holds the potential to slow down American economic growth for another decade.
Or, as in the case of Detroit, forever.
What Should We Do?
As I wrote on Sunday on National Review Online here are four immediate steps we can take:
Eliminate the "mark to market" accounting provision which is driving companies into bankruptcy unnecessarily.
Repeal the Sarbanes-Oxley law which failed in every case this year and which burdens new companies with a $3 million-a-year accounting fee.
Join China and Singapore in eliminating the capital gains tax and watch money pour into the system from private investors at no cost to the taxpayer.
Pass a strong energy bill to return at least $500 billion a year in energy money to the United States.
If we had an extra $5 trillion in energy spending in our economy in the next ten years with a zero capital gains tax and a liberated entrepreneurial sector no longer crippled by Sarbanes-Oxley we would generate the wealth to absorb all the current losses.
A No-Growth Bailout Just Sets the Stage for More Bailouts
Congress should pass no bailout without attaching a powerful economic growth component to it.
A bailout in isolation simply sets the stage for more bailouts.
In the absence of economic growth the economy will decay and debts will decay and they will be back next year for even more of your money.
Economic growth is the only way to get America on the right track.
Action item: Call your Congressman and Senator today and demand they vote "no" on Paulson and "yes" on economic growth.
P.S. -- A Super Hero in Tights, a Rap-Rocker, and a 3-Year-Old from Kentucky: What do they have in common? Any one of them will win a year supply of free gasoline on September 27th. And your vote will determine which one.
All you have to do is cast your vote here.
On August 13, we started a video contest called "Drill Here, Drill Now, Pay Nothing" as part of our "Drill Here, Drill Now" petition effort. We asked people to send in short, creative videos demonstrating support for a "Drill Here, Drill Now" approach.
American Solutions sorted through all the submissions and chose the Top 3. All this week, you can watch all 3 and vote for a winner, to be announced at the end of Solutions Day on September 27th. Please take a few minutes to watch the Top 3 videos vote for a winner at AmericanSolutions.com/VideoContest, where you can also read a bit more about the people that submitted them.
P.P.S. -- News From the Center for Health Transformation: The Center for Health Transformation held its 4th Annual Creating a 21st Century Medicaid System Meeting. State healthcare leaders from across the country discussed both the challenges and successes they face with the Medicaid system. In other panels, numerous CHT members provided solutions available making Medicaid more transparent and more efficient system which ultimately benefits the American taxpayer (watch the archived webcast for more details). In the coming weeks and months, I'll be outlining my "Health Based Health Reforms" which will bring real change to our healthcare system on a massive, innovated scale.
(There were photos in the newsletter with captions, I tried to delete the captions but may have missed one or two. Just mentioning in the event something above doesn't quite read correctly...)
1 year ago