Memo to Obama: A New Frontier

Democrats should initiate a bold program of progressive capitalism, end talk of a jobless recovery and begin the next New Frontier.

Democrats should establish a venture capital finance council, including leading investors in high-growth business, to develop a detailed agenda to drive the nation to success in the new industries that will drive the next prosperity.

Recently I accepted an invitation to give the Distinguished Alumni Lecture later this month to the Friends of the London School of Economics. Preparing this presentation, I concluded there is now a “war of the worlds” between progressive capitalists who will finance the future and entrepreneurs who will build it versus old-world bankers, who will not, and a lumbering government, which cannot.

Much is made of analogies to the Great Depression. A better analogy is the period from the Marshall Plan and new financial institutions that rebuilt Europe after the war to the Kennedy New Frontier. Together, they created a generation of prosperity melding finance with advances in technology, science, media and post-war democracy.

Mr. President, I suggest you read Ask Not, by Thurston Clarke, about the historical lineage of JFK’s inaugural address.

The post-war prosperity was built by capitalists with a public spirit of enlightened self-interest and statesmen who created new institutions such as the Marshall Plan, the Bretton Woods financial reforms, the World Bank, the IMF and the GATT.

Post war prosperity was created by business innovators who financed and created new products ranging from advanced electronics and television to huge advances in medicine, commercial applications from Right Stuff space triumphs and a crusade for education culminating in the Computer Age.

Today, the successor businesses, financiers and prosperity generators are clear. Oil and gasoline prices rise again while new energy companies plan the next fuel revolution and new auto companies plan the electric car.

The planet is imperiled while new firms plan sustainable products and new entrepreneurs plan products that will protect the planet and enrich the lives of consumers. Pandemics threaten us while new firms research medical advances that will extend our lives. Creative entrepreneurs plan ventures to provide clean water to parched and polluted regions of our planet and nation.

Our old-world banks are the heirs to the banks of the 1920s, imprisoned in their old-world paradigm, with old-world rules, guaranteeing old-world results of boom, bubble, bust and bailout. For them, little is changing. They will not finance the future of the nation.

The New Frontier that is coming, the new prosperity that awaits us, is clearly in sight. The issue is how fast it happens and who will be the winners when it does.

Venture capitalist John Doerr recently noted that of the 30 most key fast-growth companies in cutting-edge sectors, 25 are foreign; only five are American. Will we move from dependence on oil produced by Iran to electric cars produced by China, owned in part by Warren Buffett?

A 35 mile per gallon car in seven years is not a JFK moon-shot challenge. It is an asterisk in a world marching back toward $150-per-barrel oil.

It is time for the next New Frontier. Democrats have a historically rare but possibly wasted opportunity: a highly popular Democratic president and a strongly Democratic Congress.

We need a new progressive capitalism and a new political realignment, an alliance between government fueling private capital to build the next prosperity wave, and those financiers and entrepreneurs who research, invent, produce and market the drivers of the next prosperity.

Our choice is not between government action dominated by lobbyists and campaign donations in permanent campaigns, versus old-world bankers receiving trillions of dollars of public funds, which they hoard like Depression-era victims hiding money under mattresses.

Progressive capitalism means maximizing incentives and profits for those who finance the firms that create the jobs, invent the products, rebuild the nation and change the world.

Progressive capitalists reward those who rebuild Detroit, bring electric cars to our roads, create cheaper energy for business and homes, invent medical technologies that cure the ill, purify water in short supply around the world, and sell products that reduce poisonous emissions.

Progressive capitalists want to banish the notion of jobless recovery from our old-world lexicon, and spend as much time promoting plans to build electric cars as we spend pondering plans to close plants, fire dealers and apportion the price of failure.

Progressive capitalism and progressive patriotism can begin the next New Frontier that will lift our sights, our spirits, our economy and the world from the prison of oil, the poison of pollution and the fear of pandemic.

The future is clear. We should make it happen with the fierce urgency of now.

Budowsky was an aide to former Sen. Lloyd Bentsen and Bill Alexander, then chief deputy majority whip of the House. He holds an LL.M. degree in international financial law from the London School of Economics. He can be read on The Hill’s Pundits Blog and reached at