Left vs. right isn’t working for America. Alumnus offers his “solutionomics” instead.

If the United States was a business, its shareholders would probably be pretty unhappy. Workers are more productive than ever but wages haven’t risen to reflect that. Most Americans can’t cover a $500 emergency. Infrastructure is in poor repair, with some 65% of major roads rated 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 the USC Dornsife College of Letters, Arts and Sciences with a degree in political science, sees this as an opportunity for a better business plan.

The country has significant potential for success, he says, if policymakers turn to solutions that focus on return on investment, or ROI, rather than partisan politics.

He has considerable experience to back his opinion. Macke spent over two decades in finance working with Fortune 500 companies like General Electric and has advised the Federal Reserve. During his years in the industry, he witnessed a lot of frustration with policies and politicians. He also saw people losing faith in the American dream, he says.

“I thought about the youth, about 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 and Schuster, 2019) presents his ideas for unlocking America’s economic potential, using a business plan he bases on finding practical solutions rather than pandering to ideologies. He recently answered questions about this philosophy.

There’s a lot of debate surrounding corporate tax rates. How does 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 inefficient, unproductive policy one could design.” I went back to my days of negotiating deals and came up with the “earned corporate tax rate.” Base the tax rate on how many jobs a company creates and how much they are paying in wages, and provide tax cuts to those who pay well and create more jobs. It’s an “earned” tax cut.

This will increase more jobs because companies know that if they hire more then their taxes go down. The Democrats get the assurance that only the corporations that are hiring more, and paying more, will get the tax cuts.

The issue of national debt is cause for much debate among politicians of all parties. What do you think is the best approach?

So, let’s first have the conversation about the source of the debt. What’s the better return on investment for the American taxpayer, spending or tax cuts? Because that $23 trillion in debt is not the debt of Congress, it’s the debt of the shareholders of USA Inc., the taxpayers and they deserve a good ROI on the debt they are taking on.

If you look at the two years after the 2017 Tax Cut and Jobs Act, the number of private jobs created was about 590,000 less than the two years before those tax cuts. I’m not blaming anybody and I’m not questioning anybody’s motives, but that didn’t work as some hoped it would.

Spending also needs to be subjected to the same evaluation to assess ROI. For example, federal spending on for-profit colleges generates a failing grade. Nonprofit colleges generate much better returns on investment.

What are your thoughts on a federally mandated $15 minimum wage?

First of all, the fact that we need to have a mandated minimum wage is a sign that parts of our economy are not working. That’s the first thing to address. Otherwise, we just perpetuate the problem.

Second, increase things incrementally. If you doubled the minimum wage tomorrow, that’s going to have real implications for businesses, as they weren’t planning for that. If they knew that it would be $15 at a certain point in the future, then businesses 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 consumer spending. Making more means you have more purchasing power, which leads to more consumption, which leads to more demand for goods and services, which strengthens the economy. We see that 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 ensure you get a better ROI on federal education dollars, you have more people qualified for better paying jobs. That can lead to less social assistance, they’ll be paying more in taxes because they’re earning more, and their higher incomes will help with the current housing affordability issue.

You have economic benefit for the individuals and for the whole country because you’re increasing the country’s economic output. Our country is a collection of human capital, and the more productive that human capital is, 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 will always be cases when it makes financial sense for companies to produce goods and services overseas, we can do a lot to change the economics of those decisions through the Earned Corporate Tax Rate mentioned previously. For example, implementing a corporate tax policy that reduces the corporate tax rate for companies with a higher percentage of employees based in the U.S. will impact that economics of hiring in the U.S. vs outside the U.S.

How do you think your experiences at USC Dornsife influenced this book?

At USC, I learned the importance of participating in the public discourse, especially in a productive, positive way.  It’s easy to catalog everything that is wrong and engage in negative attacks. “Fighting On,” however, means rolling up your sleeves and channeling your energies into devising creative, innovative solutions that advance the discussion.