Economic Forecaster Gail Fosler Addresses Business Students
Gail D. Fosler, economist and economic forecaster, was at Sacred Heart University last week to talk with students from the University’s Welch College of Business. Her topic was “Does Business Need Government to Lead?” She is currently president of GailFosler Group LLC, a strategic advisory service for global business leaders and public policymakers.
She told the audience of students, faculty, staff and guests that there is an entire cottage industry of advisers counseling the government to erase the deficit. She pointed out that the deficit is the responsibility of everyone who goes to public school, rides public transportation, uses Medicare or Social Security and more. “We haven’t come to grips with the fact that we have a budget responsibility that we can’t afford,” she said.
She noted that if taxpayers were asked to pay the amount needed to cover all government spending, everyone would be taxed at 40 percent. “At one point, we were collecting taxes at pretty much the same rate as government spending. Since 2000, we been giving a discount,” she said. “Taxes today are roughly the same as they were in 2000, and they equal about what an average household spends annually on food, housing and clothing. And despite the taxes, parents find they have to put their children in private, church or charter schools; the country’s infrastructure system is inadequate; and the government does not have the resources to support a healthcare system.”
In terms of business and its need to have government lead, Fosler emphasized that the current economic climate impacts the business world’s ability “to operate in a stable context where there is the confidence to hire workers, make investments and be innovative. The current economic forces have not been able to generate growth.”
She credited government’s response to crisis, but questioned its ability to plan for the long term. “The willingness of the government to step in after the financial crisis created a floor to what could have been an absolute catastrophe. Government has been relatively effective in crisis, but unable to make long-term decisions,” she said. “We hear that we need to spend on infrastructure, but we can’t pass a highway bill in Congress. States can’t guarantee resources for multi-year projects, so they don’t start them.”
She questioned whether the role of business was simply to make a profit. “Business is 20 percent strategy and 80 percent problem solving,” she said. “When a new leader comes into an organization, his or her role is to define any problems in such a way that employees can see themselves as part of the solution. Government can learn from that. There are solutions waiting to be found.”
She encouraged the students to remember that government will have an impact on their future success. “You will be running businesses where you will be training people who were not trained in the school systems. You will be paying to pave roads. You will be paying higher costs for health care for your employees. If we don’t create a more efficient public structure, we will not be able to get back to the place where job opportunities are being created for you,” she said.
During the question-and-answer session, she shared a personal success with local government in Santa Anna, Calif. Her business was located in an area where the roads had not been paved in 20 years. They were full of potholes and pretty near impassible. She decided to approach Public Works where she was quickly told there was no money for paving. She finally suggested a 50-50 cost share between city government and local business. “They looked at me like I had two heads,” she said.
The city eventually hired a consultant to create a process, and Fosler was charged with getting the signatures of 60 percent of the owners as determined by square footage. “Leadership is not always glamorous. Just believe that you can make it better and figure out a way,” she advised. “Work though the issues; come up with a solution.”