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The 4% Solution: Unleashing the Economic Growth America Needs
Foreword by President George W. Bush
With contributions from world renowned economists and Nobel prizewinners, The 4% Solution is a blueprint for restoring America’s economic health
The United States is reaching a pivotal point in its economic history. Millions of Americans owe more on their homes than they are worth, long-term unemployment is alarmingly high, and the Congressional Budget Office is projecting a sustainable growth rate of only 2.3%—a full percentage point below the average for the past sixty years. Unless a turnaround comes quickly, the United States could be mired in debt for years to come and millions of Americans will be pushed to the sidelines of the economy.
The 4% Solution offers clear and unflinching ideas on how to revive America’s economy. It sets a positive economic goal and asks some of the top economic minds on how to achieve it. With a focus on removing government constraints, The 4% Solution defines the policies that will allow Americans to save, invest, and create the jobs that the United States needs.
The 4% Solution draws on the best minds in the business, including five Nobel laureates:
· Robert E. Lucas, Jr., on the history and future of economic growth
· Gary S. Becker on why we need immigrants in order to grow
· Edward Prescott on the cost (to growth) of the welfare state
· Vernon Smith on why housing leads us into and out of recessions
· Myron Scholes on why we need to innovate in order to grow the economy
With contributions from world renowned economists and Nobel prizewinners, The 4% Solution is a blueprint for restoring America’s economic health
The United States is reaching a pivotal point in its economic history. Millions of Americans owe more on their homes than they are worth, long-term unemployment is alarmingly high, and the Congressional Budget Office is projecting a sustainable growth rate of only 2.3%—a full percentage point below the average for the past sixty years. Unless a turnaround comes quickly, the United States could be mired in debt for years to come and millions of Americans will be pushed to the sidelines of the economy.
The 4% Solution offers clear and unflinching ideas on how to revive America’s economy. It sets a positive economic goal and asks some of the top economic minds on how to achieve it. With a focus on removing government constraints, The 4% Solution defines the policies that will allow Americans to save, invest, and create the jobs that the United States needs.
The 4% Solution draws on the best minds in the business, including five Nobel laureates:
· Robert E. Lucas, Jr., on the history and future of economic growth
· Gary S. Becker on why we need immigrants in order to grow
· Edward Prescott on the cost (to growth) of the welfare state
· Vernon Smith on why housing leads us into and out of recessions
· Myron Scholes on why we need to innovate in order to grow the economy
368 pages, Hardcover
First published July 3, 2012
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Displaying 1 - 4 of 4 reviews
September 3, 2020
Five Nobel Prize-winning economists and scholars contributed to the research in this book and I’m quite impressed. Turns out getting 4% annual growth is possible when you have low taxes, a functional pension system, low regulations, more high-skilled immigration, little to no trade barriers, better education opportunities, less spending, less debt, and less borrowing. Perhaps the best chapter in this book is the one by Kevin Hassett, a wonderful economist at the American Enterprise Institute.
I didn’t vote for George W. Bush, nor was I even born when he launched his campaign. If Bush had governed the way these economists have argued in this book maybe his legacy wouldn’t be looked at so negatively.
I didn’t vote for George W. Bush, nor was I even born when he launched his campaign. If Bush had governed the way these economists have argued in this book maybe his legacy wouldn’t be looked at so negatively.
August 11, 2012
The George W. Bush Institute, part of the larger George W. Bush Presidential Centre, has released its first book on the economy - a collection of 21 chapters penned by business leaders and economists, including five Nobel Laureates. The chapter topics are vast, covering almost every area that could be linked to economic growth, including: the size and role of government; the impact of housing; productivity; tax policy; monetary policy; entrepreneurship; trade; energy policy; education policy; entitlements (social programs); immigration; technology; and the non-profit sector. There are several chapters providing a broader context, explaining the history, nature and role of economic growth, with all agreeing that 4% is a stretch goal. Unfortunately, discussion of health care is notably absent, a surprising omission given both its economic impact and that the US system is an outlier amongst developed nations.
Readers will not be surprised that many of the findings, discussion, and prescriptions sync strongly with Republican ideals. What is surprising - and maddening - is the unevenness of the contributions. Some, such as Gjerstad and Smith’s new and original research citing household rather than business expenditures as the primary driver of economic cycles, their review of other countries’ policy responses to housing downturns, and their subsequent prescription for the US economy is thought provoking and befitting a Nobel Laureate’s (Smith, 2002) stature. Excellent work. Among the other well researched and supported chapters are: Blahous and Fichtener’s interesting recommendations on social security reform (including the natural interaction between benefits and fertility rates); Maria’s fascinating look at the complex role of entrepreneurship in both rich and poor economies; and Lucas’ “History and Future of Economic Growth” which covers much ground, including recognition of Europe’s conscious choice of social welfare over economic growth.
Hayward and Green, conversely, have written a pro energy exploration piece based on selective data and opinion, and seem completely unaware of the role of externalities in economics. They state “Americans have become very efficient in their use of energy”, and in trying to highlight the harm environmentalists inflict on the economy they cite the case of a recent power plant proposal: “because the plant involved pumping vast amounts of water from the [Hudson] river and carving out the side of a mountain, a collection of environmentalists waged a concerted campaign to block it.” Of course cheaper energy would boost growth, but the chapter reads like an op-ed piece by the energy industry rather than a serious contribution to the debate on economic growth.
The book’s other chapters are similarly excellent or poor, and unfortunately in the latter camp on occasion the authors are also confused. For example, in his opinionated but unsubstantiated chapter on monetary policy, Malpass argues that a weak US dollar leads companies to “devote an increasing portion of their time and energy to currencies rather than operating their business,” implying that with a strong dollar companies will spend less time on exchange rates. The dollar’s strength impacts import and export activity oppositely, and it’s nonsensical that a strong or weak dollar will lead companies to spend less or more time, respectively, managing their foreign exchange exposure. Other chapters, too, leave readers scratching their heads - both at the logic of the argument presented and the chapter’s inclusion in this book.
Those looking for confirmation of their small government beliefs will find the book interesting and comforting, while those looking for economic counterarguments to the prolific prescriptions of the ‘left’, for example Krugman or Stiglitz, will find the book both thought provoking and infuriating. Because the book is presented as a serious contribution to the current debate on boosting economic growth, it must be viewed as a weak effort.
Readers will not be surprised that many of the findings, discussion, and prescriptions sync strongly with Republican ideals. What is surprising - and maddening - is the unevenness of the contributions. Some, such as Gjerstad and Smith’s new and original research citing household rather than business expenditures as the primary driver of economic cycles, their review of other countries’ policy responses to housing downturns, and their subsequent prescription for the US economy is thought provoking and befitting a Nobel Laureate’s (Smith, 2002) stature. Excellent work. Among the other well researched and supported chapters are: Blahous and Fichtener’s interesting recommendations on social security reform (including the natural interaction between benefits and fertility rates); Maria’s fascinating look at the complex role of entrepreneurship in both rich and poor economies; and Lucas’ “History and Future of Economic Growth” which covers much ground, including recognition of Europe’s conscious choice of social welfare over economic growth.
Hayward and Green, conversely, have written a pro energy exploration piece based on selective data and opinion, and seem completely unaware of the role of externalities in economics. They state “Americans have become very efficient in their use of energy”, and in trying to highlight the harm environmentalists inflict on the economy they cite the case of a recent power plant proposal: “because the plant involved pumping vast amounts of water from the [Hudson] river and carving out the side of a mountain, a collection of environmentalists waged a concerted campaign to block it.” Of course cheaper energy would boost growth, but the chapter reads like an op-ed piece by the energy industry rather than a serious contribution to the debate on economic growth.
The book’s other chapters are similarly excellent or poor, and unfortunately in the latter camp on occasion the authors are also confused. For example, in his opinionated but unsubstantiated chapter on monetary policy, Malpass argues that a weak US dollar leads companies to “devote an increasing portion of their time and energy to currencies rather than operating their business,” implying that with a strong dollar companies will spend less time on exchange rates. The dollar’s strength impacts import and export activity oppositely, and it’s nonsensical that a strong or weak dollar will lead companies to spend less or more time, respectively, managing their foreign exchange exposure. Other chapters, too, leave readers scratching their heads - both at the logic of the argument presented and the chapter’s inclusion in this book.
Those looking for confirmation of their small government beliefs will find the book interesting and comforting, while those looking for economic counterarguments to the prolific prescriptions of the ‘left’, for example Krugman or Stiglitz, will find the book both thought provoking and infuriating. Because the book is presented as a serious contribution to the current debate on boosting economic growth, it must be viewed as a weak effort.
June 15, 2014
Bearing epithets such as "prudence", "capability", and "the Iron Chancellor", there was once a time when Gordon Brown was taken very seriously indeed. Now, an economic collapse later, his reputation is shot and his book about the global economy after the credit crunch can be found at the bottom of bookshop bargain bins for a distinctly deflationary £2.99.
George W. Bush, by contrast, was rarely taken seriously. Bush himself was aware of his limitations (and to preempt the obvious jokes, that's something more politicians could do with) and gave a longer leash to subordinates like Dick Cheney and Donald Rumsfeld than either his predecessor or successor.
The same applies in The 4 per cent Solution: Unleashing the Economic Growth America Needs (Crown Business, $26.00). Bush has not written a book about the global economy after the credit crunch; instead, ever the CEO, he has assembled a collection of leading economists and got them to write one. So we have Nobel Prize-winning economist Robert Lucas on economic growth past and present, fellow Nobel laureate Gary Becker on immigration (and Standpoint contributors Amity Shlaes and Michael Novak on, respectively, Calvin Coolidge and the moral superiority of free markets).
The puzzling thing is why Bush ignored all this when he was in office. There is a chapter on sound money when, with White House encouragement, base money in the United States grew by more than 33 per cent between 2001 and 2005, fuelling the housing boom. There is a chapter on sound government finances when Bush turned Clinton's budget surpluses into deficits with the largest expansion in Federal entitlement spending since Lyndon Johnson's Great Society.
The irony is that Brown, a man once taken so seriously, produced such a squib of a book, while Bush, a man widely seen as a nincompoop, has produced something much more substantial. If only he'd acted on this wisdom before the event.
George W. Bush, by contrast, was rarely taken seriously. Bush himself was aware of his limitations (and to preempt the obvious jokes, that's something more politicians could do with) and gave a longer leash to subordinates like Dick Cheney and Donald Rumsfeld than either his predecessor or successor.
The same applies in The 4 per cent Solution: Unleashing the Economic Growth America Needs (Crown Business, $26.00). Bush has not written a book about the global economy after the credit crunch; instead, ever the CEO, he has assembled a collection of leading economists and got them to write one. So we have Nobel Prize-winning economist Robert Lucas on economic growth past and present, fellow Nobel laureate Gary Becker on immigration (and Standpoint contributors Amity Shlaes and Michael Novak on, respectively, Calvin Coolidge and the moral superiority of free markets).
The puzzling thing is why Bush ignored all this when he was in office. There is a chapter on sound money when, with White House encouragement, base money in the United States grew by more than 33 per cent between 2001 and 2005, fuelling the housing boom. There is a chapter on sound government finances when Bush turned Clinton's budget surpluses into deficits with the largest expansion in Federal entitlement spending since Lyndon Johnson's Great Society.
The irony is that Brown, a man once taken so seriously, produced such a squib of a book, while Bush, a man widely seen as a nincompoop, has produced something much more substantial. If only he'd acted on this wisdom before the event.
January 13, 2021
From Follett: The 4% Solution offers clear and unflinching ideas on how to revive America's economy. It sets a positive economic goal and asks some of the top economic minds on how to achieve it. With a focus on removing government constraints, The 4% Solution defines the policies that will allow Americans to save, invest, and create the jobs that the United States needs.
Displaying 1 - 4 of 4 reviews