USC Dornsife alumnus Chris Macke advocates for a new, less politically confrontational approach to solving economic problems using his signature philosophy. [5 min read]
If the United States were a corporation, its shareholders would likely be quite unhappy. Workers are more productive than ever, but wages have not increased to reflect this. Most Americans cannot cover a $ 500 emergency. The infrastructure is in poor condition, with some 65% of main roads classified as in “less than good condition”. Meanwhile, “management,” aka Congress, has a 36% approval rating with its taxpayers.
Chris Macke, who graduated in 1992 from USC Dornsife College of Letters, Arts and Sciences with a degree in political science, sees an opportunity for a better business plan.
The country has significant potential for success, he says, if policymakers turn to solutions focused on return on investment, or ROI, rather than partisan politics.
He has considerable experience to back up his opinion. Macke has spent more than two decades in finance working with Fortune 500 companies like General Electric and advised the Federal Reserve. During his years in the industry, he has witnessed a lot of frustration with politicians and politicians. He’s also seen people lose faith in the American Dream, he says.
“I thought of young people, of my nieces and nephews,” he says. “We have a responsibility to show them that there are specific actions or solutions that can be taken.”
His book Solutionomics (Simon & Schuster, 2019) presents his ideas for unleashing America’s economic potential, using a business plan that he bases on finding practical solutions rather than bowing to ideologies. He recently answered questions about this philosophy.
Corporate tax rates are the subject of much debate. How it works Solutionomics address this?
Chris Macke ’92. (Photo: Courtesy of Chris Macke.)
I looked at corporate taxes, for example, and I said, “Okay, this is the most ineffective and unproductive policy imaginable. I went back to my days of negotiating agreements and came up with the “earned corporate tax rate”. Base the tax rate on how many jobs a business creates and how much wages it pays, and give tax cuts to those who pay well and create more jobs. It is a “deserved” tax cut.
It will increase more jobs because businesses know that if they hire more, their taxes will go down. Democrats can be confident that only companies that hire more and pay more will get tax cuts.
The issue of the national debt is the subject of much debate among politicians of all parties. What do you think is the best approach?
So let’s start by discussing the source debt. What is the best return on investment for the US taxpayer, spending or tax cuts? Because this $ 23 trillion debt is not congressional debt, it is the debt of USA Inc. shareholders, the taxpayers and they deserve a good return on their investment on the debt they incur.
If you look at the two years since the 2017 Tax Cuts and Jobs Act, the number of private jobs created was about 590,000 less than the two years before those tax cuts. I don’t blame anyone or question anyone’s motives, but it didn’t work out as some had hoped.
The expenses should also be subjected to the same evaluation to assess the return on investment. For example, federal spending on for-profit colleges generates a failing grade. Nonprofit colleges generate much better returns on investment.
What do you think of a minimum wage of $ 15 imposed by the federal government?
First of all, the fact that we need a mandatory minimum wage is a sign that parts of our economy are not functioning. This is the first thing to tackle. Otherwise, we just perpetuate the problem.
Second, increase things gradually. If you double the minimum wage tomorrow, it will have real implications for businesses, because they did not foresee this. If they knew it would be $ 15 at some point in the future, then companies could plan. And, maybe it’s not $ 15 everywhere, maybe it’s a national average – more in a place like New York and less in a state with lower cost of living.
About 70% of our economy is made up of consumer spending. Doing more means you have more purchasing power, which leads to more consumption, which leads to more demand for goods and services, which makes the economy stronger. We see this in the data all the time.
How would your approach support the American middle class?
You want to set up your economic system so that your country has policies that strengthen and increase the middle class. If you invest in education and make sure you get a better return on your federal education dollars, you will have more people qualified for higher paying jobs. This can lead to lower welfare, they will pay more taxes because they earn more, and their higher incomes will help address the current housing affordability problem.
You have an economic advantage for individuals and for the whole country because you increase the economic output of the country. Our country is a collection of human capital, and the more productive that human capital, the better your economy.
So how would you apply “solutionomics” to prevent companies from going overseas for cheaper labor?
Corporate tax policy can play a role. While there are always cases where it makes financial sense for companies to produce goods and services overseas, there is much we can do to change the economics of those decisions through the corporate tax rate earned. previously mentioned. For example, implementing a corporate tax policy that lowers the corporate tax rate for companies with a higher percentage of U.S.-based employees will impact the economy of the hiring in the United States vs. outside the United States.
How do you think your experiences at USC Dornsife influenced this book?
At USC, I learned the importance of participating in public discourse, especially in a productive and positive way. It’s easy to label everything that’s wrong and launch into negative attacks. “Fighting On”, however, means rolling up your sleeves and channeling your energies to craft creative and innovative solutions that move the discussion forward.