Andrei Cherny opinion in The Arizona Republic

Posted by AzBlueMeanie:

Democratic candidate for State Treasurer, Andrei Cherny, had this opinion published in The Arizona Republic Human capital the ticket to turning economy around:

By just about every measure, Arizona's economy is among the worst in the country. Neighbors like New Mexico and Colorado are emerging from the recession, while we continue to bump along the economic floor. Clearly, what we've been doing has not been working.

In his Feb. 24 column "Investment capital is vital; it's not evil" (Opinions), Robert Robb accused Democrats of failing to "understand or appreciate the role of investment capital" in generating economic growth. That's a straw-man argument.

Bill Clinton cut the capital-gains tax from 28 percent to 20 percent. And Barack Obama said we should "eliminate all capital-gains taxes on small-business investment." Most Democrats understand the private sector creates jobs and needs capital to succeed.

But while capital counts, when it comes to economic growth, it is not all that matters. In the 21st century global economy money is mobile, and a blank check or tax loophole can just as easily end up going to a bonus for the failing CEO of a multinational corporation or to a millionaire's offshore bank account as it can to help create jobs here at home. So today's top economists, such as Stanford's Paul Romer, have shown that the best way to generate economic growth is to invest in education and help spur entrepreneurship and technological innovation.

Arizona has failed to do this. One could argue the biggest drag on the state economy is not lack of capital, but lack of leadership in the state Capitol. To grow our economy, Arizona needs to become home to a "new entrepreneurial economy" – one that makes it easier for new businesses to thrive.

I believe the state treasurer should be looking for smart, safe ways to keep more of our state and banking dollars in Arizona. But there is more that needs to be done.

We need to invest in people – in the innovators and inventors of tomorrow. We should be jumpstarting the jobs of the future by supporting the work of high-tech and biotech endeavors such as Science Foundation Arizona and TGen. And Arizona should make it our goal to become "the Solar State."

Arizona's economic future isn't just copper, cattle and cotton, but also computers, commerce and creativity. That means that capital is important, but that human capital is our ticket to turning our economy around.

Andrei Cherny is a former state assistant attorney general and White House adviser. He is a Democratic candidate for Arizona state treasurer.