Mohamed A. El-Erian, chief executive and co-chief investment officer Pimco. He starts by saying that gridlock, often thought to be good for business, is not given our current economic situation.
While certain sectors of the economy are in control of their destinies, the private sector as a whole is not in a position to do this. It needs help to overcome the consequences of the "great age" of leverage, debt and credit entitlement, and the related surge in structural unemployment. The urgency to do so increases in the rapidly evolving global economy, as United States sheds a bit more of its economic and political edge to other countries daily.Good luck getting the Republicans to go along with that!
Simply put, these realities make it necessary for Washington to resist two years of gridlock and policy paralysis. Democrats and Republicans must meet in the middle to implement policies to deal with debt overhangs and structural rigidities. The economy needs political courage that transcends expediency in favor of long-term solutions on issues including housing reform, medium-term budget rules, pro-growth tax reforms, investments in physical and technological infrastructure, job retraining, greater support for education and scientific research, and better nets to protect the most vulnerable segments of society. [Emphasis added]
Success requires an element of policy experimentation as well as confidence that mid-course policy corrections will be identified and undertaken on a timely basis. And such efforts must be wrapped in an encompassing economic vision that acts as a magnet of conversion nationally, counters growing international frictions and facilitates much-needed global economic coordination.
This is not an easy list. It will be difficult to translate today's political extremes into a common vision, analysis and narrative. Yet the longer it takes to do this, the greater the effort needed to restore our tradition of unmatched economic dynamism, buoyant job creation and global leadership.