A Post-Election Plan to Grow the Economy 4%

November 8, 2012

Hot Shoppe opened 1927, Washington, DC

Is it still possible to build a business today like my mom and dad did in 1927?  I certainly believe it is.  I think the answer lies in choosing the right path for your business, and hopefully, the government will choose the right path for the economy.  If you’ll indulge me, I came across a road map that may take us there.

Next spring in Dallas, Texas, President George W. Bush (#43) will dedicate his presidential library – named the George W. Bush Institute.

President Bush has stated that one of the roles of the policy center is to promote economic growth at home and freedom abroad.  Recently, the Center asked a group of Nobel Prize winners and renowned economists to establish a blueprint for restoring America’s economic growth to an average of 4% of GDP for the next several years.

The contributors all believe that this is an achievable goal, and they suggest several ways that this could take place.  The group does agree that even with current growth at 2%, 4% is a stretch but very doable.  Former U.S. Treasury official David Malpass writes, “Based upon the ageless American principle of sound money, low tax rates, limited federal government, the market-based allocation of capital and labor, and sensible regulatory and trade rules, a consistent 4% growth is achievable.”

The authors conclude that the objective of economic policy is to allow hard-working individuals, no matter their status at birth, to take advantage of opportunity and achieve a good life.  As Brendan Mintner of the Bush Institute writes in Chapter One, “There is a certain virtue to prosperity.  It inspires people, removes pressures that lead to embitterment and division, and allows all of us to step back and get a healthy perspective for what is important in life.”

One of the major themes of the 4% solution is growth, growth, growth and more growth!  In Chapter One, Mintner writes, “A growing economy produces jobs that allow workers to provide for their families, live comfortable stable lives and give back to their communities.”  As they discuss growth, W. Michael Cox and Richard Alon state, “We spend our lives making choices based on the costs & benefits of what we do.  Incentives rule our behavior, and economic growth grows through incentives.  Free markets encourage workers, companies and investors to undertake productive activities.  Growth picks up when people choose to get an education in a field the economy values highly, when they choose to work full time and become more productive, when they choose to save, invest and take business risks, when they choose to start a company and hire workers, when they choose to innovate and create new products; and when they choose to seize the business opportunities around them.”

Marriott's 1st Hotel - Twin Bridges Motor LodgeI personally know this to be true as I have witnessed it firsthand.  I certainly wasn’t around in 1927 when my dad opened his nine-stool root beer stand.  I was not there when he worked for six years to get through college – the first in his family to do so.  But, I was there as he built the root beer stand into a successful restaurant chain, and I was there when he opened his first hotel in 1957.  Dad and mom opened their root beer stand with six employees.  Today, Marriott and our franchisees employ over 325,000 people in 74 countries around the world.  I get a lot of wonderful letters from our associates expressing appreciation for the opportunities and wonderful lives our company has given them.

Is it still possible to do this today?  Steve Jobs at Apple certainly believed and did it.

But the book often expresses great concern about the power of the federal government to limit our growth.  Writer Kevin Haslett argues about the great importance of lowering the debt level and states that cutting spending is a more effective way to lower government debt levels than increasing taxes.  When government stops spending recklessly, consumers and investors are willing to spend more because they no long expect that high government spending will lead to higher taxes down the road.  It will reduce GDP growth in the short term but increase economic growth in the long term.

I think we all need to recognize the proper role of government in helping us reach the 4% goal and help small businesspeople like my mom and dad continue to build successful businesses in the future.

In closing, let me list five takeaways as to how to reach the growth target of 4% of GDP:

  1. Lower taxes on individuals and corporations.
  2. Reduce government spending.
  3. Reduce economic policy uncertainty.  If business cannot reasonably predict future policy, they may hold off making large investments and consumers may hold off making large purchases.
  4. Execute more free trade agreements so we can see more American products around the world.
  5. Provide for a sound and stable dollar so people will invest with confidence in the good old USA.

We have a lot to do, but with the proper government policies, my parents’ dream of creating and building a business can continue to repeat over and over and over again.

I’m Bill Marriott and thanks for helping me keep Marriott on the move.

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This is a fantastic article! I am currently reading the biography of British Prime Minister Margaret Thatcher, who in 1979 inhereted a truly dismal British economy that faced many of the same problems (and many much worse!) than the United States faces today.

Throughout the book, she stresses that free-market solutions are the ONLY viable solutions. I wholeheartedly agree with this. Ever since I moved to this great country I have always been amazed and inspired by the incredible work-ethic of Americans. I believe that when the world needs a solution to a truly big problem, they only need look for an American. Thank you sir for writing this inspiring article.

Spot on, Mr. Marriott. Now how do we translate these ideas into policy actions?

We need an economic constitution in addition to a political one. The current political constitution has had massive slippage into our economic lives and it has changed the fabric of this nation for good. Freedom of speech becomes irrelevant in the face of poverty. If governments have legal and enforcement powers then individuals need symmetric economic powers.

Taxation takes away individual economic power and passes it on to the government. We have to stop this economic power drain from the individuals to the government and focus on the economy of the individual as opposed to the economy of the nation. If every day each individual becomes just a little better off than the day before our nation grows. After all, isn't this what we all want?

You should run for president!

I agree with plan to help the economy. But I also can recall when this country was great. At that time we appreciated the importance of FAMILY. The business place was a family where workers and leaders took care of each other.
In the vein of family values, I want to understand why after spending a lifetime accumulating Marriott points, I can't leave them to MY FAMILY after my demise. It seems that the new corporate idea of greed is stoking this policy. I'm disappointed in Bill for allowing it. I thought that his morals were better.

Due to my company paying my way, and their insistence on having their quarterly meetings at Marriott, I have no choice but to stay at Marriott hotels throughout Georgia. I must say that if I had my choice, I certainly would choose another chain. I find it ridiculous that there are no refrigerators or microwaves in the rooms, and if I want one or both, I have to PAY for them!!! Needless to say, I have to bring a cooler with me and fill it with ice to keep my medicine and soft drinks cold, because I am NOT going to pay an extra $10 PER NIGHT to have one of your refrigerators delivered to my room!!! Then there's those stupid little one cupper coffee makers. I've gotten to where I bring my own 4 cup coffee maker so that my spouse and I can enjoy a cup of coffee at the SAME time! For the amount of money charged to stay at your hotels, one would think these things would be provided. I mean after all.....I can stay at a Days Inn or Econo Lodge for HALF what Marriott charges and these things are INCLUDED in the price. Plus....at both of those, there are smoking rooms. The fact that you cater to non-smokers is discriminatory. Having to get into an elevator and go downstairs to smoke is just plain STUPID. I guess it's just another example of how certain people and companies are trying to control people's lives. As I stated....my company is the one that puts me up in your hotels, but believe you me, if it was me paying, I darned sure would NOT be staying at Marriott. Also know that I am not alone in how I feel....I'm just more outspoken about it.

Former President George W. Bush has a laudible goal and I admire Mr. Marriott's optimism. But based on the five criteria for achieving the 4% growth, I don't see how it can be done over the next 4 years as our government and the current administration are adverse to the roadmap described by Mr. Marriott. Maybe someday, but not anytime soon...

Mr Marriott,

I agree with you on every piece of your blog but I believe there is one key point that is missing. In addition to the government responsibility there is the CEO responsibility. As a country we have seen CEO pay grow exponentially since the 1960's while middle class pay increases have gone up below the rate of inflation. The gap between CEO/executive level pay and that of the middle class is greater now than in the history of this country.

Once upon a time, business owners like Henry Ford and your father believed in taking care of associates. I believe Marriott continues to be at the forefront of that today. But not all companies think in this manner. We live in an age where companies try to find ways to cut benefits, pay and jobs to maintain or increase lofty profit margins.

The government must do their part to create an equal playing field and make this country a haven for business, trade, and manufacturing, but companies must also think about the repercussions of paying lower wages or cutting jobs to increase profits. What may be great for short term company profits may not be what is best for the USA.

While many are looking for the government to pull us out of the recession, I believe it is also up to the companies (many of which got us in this mess) to take responsibility as well. In the Marriott world, the hotels are beholden to Guests, Owners AND Associates. In today's world, too many companies have forgotten the responsibility they owe to their associates. I am thankful that Marriott is not one of them.

Your family's entrepreneurial spirit is such an inspiration, and it behooves politicians to not only carry out, but first of all, to communicate your sound economic principles more effectively. The U.S. has been the model of how free markets improve the lives of millions around the world, through jobs, and then, the ultimate goal, which is philanthropy. Another good book is The Foundation by Joel Fleishman. It explains America's unique civic society which is the ultimate benefit of the economic ideas you've explained. Through unregulated American philanthropy, millions are served, and great ideas which change the world flourish. The Marriott companies and Marriott philanthropies are perfect examples. It all depends on economic growth. Thank you, Mr. Marriott.

Interesting thoughts. I'm assuming you haven't voted Obama then ;-). I do think a state should focus on creating the optimal scenario/infrastructure/etc. for a country in order for business ideas to emerge and the factor of pecuniary external effects to kick in and positively impact the economy.
The problem of the "4% solution is growth, growth, growth and more growth!" philosophy is: when are we going to add sustainability as a crucial factor inside the system? I read once that if everyone were to spend as many resources as the USA, we would need around 8 planets or something to keep up.. and China and India are really just starting to join that process.

There is no exponential growth possible in a world of limited resources, so is growth the best sustainable solution long term? My guess it's probably not enough. But why hasn't that factor even been taken into consideration?

Lower taxes on individuals and corporations.
Reduce government spending.

The two most important points and very easy to do, if the politians want really to.

I don't know where else to write this, as I can't find a place on the Marriott website. I live in New York City where the effects of Hurricane Sandy are still being felt. As a Vacation Club owner and Marriott rewards member I would like to see Marriott put pressure on one of the Cruise Lines that they do business with to provide a ship as a temporary shelter to hundreds of people who are currently living in less than ideal conditions. Is there something that you can do? I think it an simple if not easy solution to a very complex problem come of tragedy. Thank you for your consideration.
F. Kass

Bill...your comments are misplaced in terms of lowering taxes on the middle class. I own a timeshare at your BeachPlace Towers and you've just announced a 2013 maintenance increase of 9% for all owners...followed by at least 5% for 2014, 2015 and 2016. Shame. Aren't you rich enough to not steal from your customers who you hammer with increased costs.