The Necessity of Economic Decision

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The Necessity of Economic Decision

Senator Marco Rubio

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Agroup of many of the nation’s top CEOs released a statement last month arguing that maximizing shareholders’ profits can no longer be the primary goal of America’s corporations. To some Americans, the message may come as a surprise; over the last several decades, shareholder primacy theory has fundamentally remade significant parts of our economy, shifting precedence from business development to enlarging short-term financial returns for stakeholders. The group, led by JPMorgan Chase CEO Jamie Dimon, stressed the importance of capital investment, supporting local communities, and generating long-term value.

This is a start. American economic policy today suffers from an inability to identify a common good and set priorities required to realize it. The outcome is an active aimlessness, in which problems are often articulated without the intent or possibility of solving them. Absent the direction provided by priorities, we have no way to evaluate how the country is doing to begin with, nor can we identify related problems in a coherent way.

The present drift should be alarming to political conservatives, for it was against a politics that pulled in all directions in the late 1970s that modern conservatism first gained political power. An ineffectual liberalism then pursued the conflicting goals of raising union pay and increasing government welfare, but raising taxes and regulations on businesses for environmental and progressive causes; reducing reliance on high-price foreign oil but retreating from American power abroad and refusing to drill for oil at home. The outcome of pursuing all of these goals at once was crippling inflation, preventing the achievement of any.