Economic Policy After a Lost Decade – From Over-Spending to Innovation

Timothy M. Kaine *

Writings on the economic collapse that began in 2007 are legion.[1] Analysts take different perspectives on the causes of the recession and on the policies that must be implemented to return to prosperity. And, at the national level, the President and Congress vigorously contend over the appropriate strategies to put in place to both grow the economy and guard against future collapses such as we’ve experienced in recent years.

As part of The University of Richmond Law Review’s annual Allen Chair Symposium, appropriately focused in 2011 on recent policy developments in the area of financial regulation, I offer the perspective of a policymaker who served as a Governor during the most significant economic downturn in America since the 1930s. I was inaugurated in January of 2006 when America still was in the midst of a sustained economic expansion. By late 2006, I was telling the Virginia General Assembly that the economy was softening, driven first by a major slowdown in the real estate market. In late 2008, I gathered in Philadelphia with the nation’s governors to communicate a bipartisan consensus to President-elect Obama that the nation’s economy needed bold steps in order to reform and recover. By the time I left office in January 2010, I had led numerous rounds of budget cuts during an economic collapse that had achieved global proportions. Like many other governors who served at the same time, I am the only Governor in recent Virginia history to leave office with state revenues lower than in the budget I inherited at the start of my term.

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*  Former Governor of Virginia (2006–2010); Senior Distinguished Lecturer on Law and Leadership Studies, University of Richmond. The author thanks Tricia A. Dunlap for research assistance.