It's time, America. Americans need work. Americans need jobs. And right now, our government's main job must be to help create these jobs. The unemployment rate has lingered 9 percent for 19 straight months; the longest postwar stretch on record. And with our list of challenges ranging from overpriced health care to evaporating manufacturing, where can we start? Here are four steps our country must take now to get Americans back to work. Each tackles a bottleneck to jobs that must be fixed now:
Fair Trade, Not "Free" Trade
First, we must balance our trade deficit by making trade fair. Some of our trading partners, China for example, have become our trading enemies by devaluing their currency, basically giving us their unemployment problem in return for buying our debt. Putting pressure on China to end their currency manipulation and illegal trade practices will immediately lead to more U.S.-based manufacturing -- jobs we desperately need back. I did an interview with Dr. Peter Morici to discuss how our trade and banking policies are costing us jobs.
Make Banking the Practice of Lending to Businesses, Not Gambling or Buying Treasuries
Banks no longer make money from lending to American businesses. With massive bank consolidation due to deregulation, as well as massive bailouts, we now have four mega-banks that couldn't be less interested in lending to businesses. Borrowing has declined 7 straight quarters while bank profits (and bonuses) are at all time highs. We have to break the bankers to bring back jobs. Listen to my Radio Free Dylan with Barry Ritholz and Josh Rosner for more on this problem.
Control Health Care and College Tuition Costs
The US spends 16 percent of GDP (twice as much as countries like the UK) but have worse health care. Much of the brunt of paying for this inefficient health care comes from US-based companies that are (unlike their foreign counterparts) mandated to pay employee health care. The price of college tuition and fees are skyrocketing as well, rising over 439 percent (adjusted for inflation) over the past 25 years.
Student borrowing has more than doubled in the last decade as prices jumped 8 percent last year alone, meaning college may soon be out of reach for many Americans. Meanwhile, there aren't enough jobs for these students to pay off the debt, with high unemployment and over 17 million college graduates currently doing menial jobs. Listen to my interview with CEPR Director Dean Baker for more on this problem.
Reform the Tax Code
Right now, Warren Buffett's secretary pays a higher percentage of income to taxes than Warren Buffett. That's a very big problem for anyone who isn't the child of a billionaire. We need to reorganize the tax code to promote US investment instead of rewarding overseas investment and aristocracy. Listen to my interview with tax expert and bestselling author David Cay Johnston for more on this problem.
When you have problems as we do, surely there is opportunity for work solving them. But first we must correctly identify the root causes and activate the necessary debate around the actual problems that are costing America its jobs.
For the next three days, I'm going to be traveling the country for the Steel on Wheels tour. We're having a conversation about how to make things in this country again. Join us. We'll be holding Town Halls on each leg of the tour, starting tonight at the University of Rochester (watch the live stream at 7pm EST here)
And let me know what you think we need to do to put America back to work on our new collaborative website at SteelOnWheels.com!
Or, if you'd like to stream our live town hall on your own website, click here to grab the embed code.