At a recent breakfast event put on by the Roosevelt Institute’s Next American Economy project, Senior Fellow Bo Cutter invited Lenny Mendonca, Director of Firm Research at the McKinsey Global Institute, to discuss what he calls the US’ “dual-speed economy.” One the one hand are globally traded sectors “that are subject to competition… are innovating, are productive,” he says. On the other hand is the public sector, which is “creating a drag on the economy that is the equivalent of… an annual de-stimulus program,” he says. The solution? Bring innovation and productivity growth the public sector.
In order to do so, we have to “create a kind of pressure that ensures there is productivity and innovation in those sectors,” he says, by bringing “transparency around performance” and getting citizens to apply “pressure on elected officials to ensure that government is performing.” While the public may not always get every detail of the federal budget right, they are correct in thinking that much of government isn’t performing as well as other parts of the economy. “This is a national emergency to ensure that these portions of the economy work,” he says.
Watch the full interview here: