The 4 Percent Project

I am in Dallas today and tomorrow, attending a conference on economic growth at the George W. Bush Presidential Center. The conference is titled The 4 Percent Project: Driving Economic Growth. It proposes a goal of 4 percent consistent annual GDP growth–an objective that has often been reached in the past, but is out of reach under current policies. The conference is small and by invitation. President Bush spoke early this afternoon and got a warm reception:
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There was a panel discussion on what public policies contribute to economic growth, moderated by Richard Fisher, the CEO of the Federal Reserve Bank of Dallas. The panelists were Allan Meltzer, a professor at the Carnegie Mellon school of business; Jeffrey Miron, an economist at Harvard; Susan Schwab, former United States Trade Representative, and Amity Shlaes, author and syndicated columnist. The discussion was intensely interesting. If I were to take away one lesson, it would be the economically destructive effect of excessive government spending, regardless of whether that spending is financed by taxes or debt (future taxes).
There was a question period at the end of the panel discussion. I was going to raise my hand, but when the first question came from a Nobel Prize-winning economist, I decided I’d better keep my mouth shut.
I then attended a breakout session on The Fed, Taxes and Spending that was moderated by Kim Strassel of the Wall Street Journal. The panelists were Kevin Hassett, formerly a senior economist at the Board of Governors of the Federal Reserve System and now with the American Enterprise Institute; Robert McTeer, a former CEO of the Federal Reserve Bank of Dallas who is now with the National Center for Policy Analysis; David Malpass, formerly chief economist at Bear Stearns and now president of Encima Global; and Paul Singer, the founder of Elliott Management, a hedge fund. The discussion was frankly brilliant. It ran the gamut from optimistic–Kevin Hassett pointed out that our government’s policies are now palpably bad on so many fronts that we have many opportunities for improved growth–to worrisome–Paul Singer argued that bank finances are as opaque as ever, and Dodd-Frank makes the financial system more brittle and less safe.
The day concluded with a rousing speech by Meg Whitman, who is still somewhat in campaign mode:
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The program will continue tomorrow. The cause, identifying ways of achieving sustainable 4 percent growth, is a good one. None of our problems, from debt to defense, is ultimately soluble without more robust economic growth. The good news is that economists know quite a lot about what policies will foster growth, if we can only make politicians cut out the demagoguery and implement them.

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