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Gary Shapiro

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We Can Handle the Truth: Our Government Is a Jobs Killer

Posted: 09/13/11 12:20 PM ET

There was a moment in President Obama's speech to a joint session of Congress Thursday night when Candidate Obama returned to the limelight. Unfortunately, it was short-lived. Behind all the passion and eloquence that Obama was able to muster for one of the biggest speeches of his presidency, there was the same old stuff.

And Americans should expect the same old results.

While it's not quite accurate to say that Obama double-downed on the failed economic policies of his administration -- his $447 billion jobs proposal is half the 2009 stimulus -- there was absolutely nothing to suggest that Obama is prepared to change course. All the lofty rhetoric couldn't mask the president's continued commitment to Keynesian economics and willful ignorance of the needs of job creators.

The truth requires listening to those who create jobs. I represent more than 2,000 tech companies in my day job, but I also hear from lots of entrepreneurs and other business leaders. Since the early 2011 launch of my book, The Comeback: How Innovation will Restore the American Dream, I have traversed the country speaking to varied groups and after each talk I am surrounded by job creators with similar stories. The furniture maker in upstate New York; the couple with a landscape company, nursery and day care center in Michigan; the Virginia tech start up; the Oregon inventor and the Florida restaurant owner: they all are patriotic Americans who want to grow their businesses and help the economy. But none of them are hiring.

Why? For very good reasons, many related to the tough economic environment but many -- startlingly 0 -- related to policies of our government. I ask why no one, especially those in power, raises these subjects. More often than not, the answer is some version of the famous retort by Col. Nathan Jessep in the movie A Few Good Men: Because Americans "can't handle the truth."
Well, I think Americans can handle the truth, and I offer these unconventional views in the spirit that a healthy economy and jobs are vital to our future.

Our anti-discrimination laws hurt new jobs creation. Our nation has tens of thousands of underemployed lawyers eager to take on the cause of any fired worker. Anti-discrimination lawsuits and EEOC complaints are easy to file, costly and time-consuming to defend. Combine this with our inability to take responsibility for our own failures and we have a litigation cocktail which discourages hiring. Of course discrimination against individuals based on suspect classification is terrible, but the laws aren't helpful in encouraging new hires. We are not yet Europe, which makes every dismissal costly, but we can take advice from Laurence Parisot, the head of France's largest employers' union, Movement of the French Enterprises, who said, "We will hire more people if it's made easier to fire them."

Two-year unemployment compensation discourages jobs. According to an analysis by the Federal Reserve Bank of San Francisco, the Obama Administration's extension of unemployment benefits to 99 weeks increased the U.S. jobless rate as much as 0.8 percentage points. Or put another way, serious job seeking occurs when benefits are about to run out. As an employer, I have twice experienced job candidates asking to delay their start date until after unemployment payments end. I am not alone. In a recent article, The Wall Street Journal recently quoted an Alabama farmer looking to hire who was encountering "Americans who showed up to apply for jobs demanded that he pay them off the books so that they can continue to collect unemployment benefits." As I've argued before, one way to end this fraud is to tie long-term unemployment benefits to volunteer work.

The 2010 stimulus package did not boost the economy. The $787 billion stimulus package was divided into roughly three parts: a third to the states so they could avoid tough financial choices; a third to taxpayers in the form of barely noticeable reduction in taxes and a third for pork barrel projects, the so-called "shovel ready" boondoggles that replaced real infrastructure investment. What do we have to show for all this? An unemployment rate above 9 percent and anemic 2011 GDP growth. If the money had at least been invested in real capital infrastructure we would be better off. The same is true with the so-called "cash-for-clunkers" program, first-time homebuyers and other feel-good programs. Each one borrowed from our children so we can feel better today. Shameful!

Our political leadership's business antipathy and uncertainty on taxes, health care and spending discourage jobs creation. People running and owning businesses face political uncertainty in so many areas. They have no idea of how much and what type of taxes they will have to pay over the next few years. They face a new, far-reaching health care law that imposes new costs and may or may not be repealed by a new Congress or the Supreme Court. They fear a president who has no business background, few advisers with business experience, and who encourages an anti-business climate, higher taxes on wealth creators and class warfare. And they have the National Labor Relations Board telling companies in which states they can manufacture and seeking to make secret overnight unionization the status quo.

High corporate taxes and pro-union protectionism discourages jobs creation. At 35 percent, the U.S. has one of the highest corporate tax rate in the developed world, which forces businesses to invest abroad. The United States also has not passed a free trade agreement in six years. Although the president talks a good game on free trade, he and his Democratic allies keep adding new conditions to the Panama, Colombia and South Korea free trade agreements that have been stalled for years. This means our job-creating exporters pay more than our competitors.
Can Americans handle this truth? I think they can, but it will require leadership and responsibility from our elected leaders to do something about it. We need to stop with the little ideas, like lowering the tax withholding and even good ideas like Patent Reform, and go to the real issues -- even if they are uncomfortable. Challenge Americans to accept responsibility, sacrifice for their children and contribute to society. The status quo is leading us down the path of decline.

Gary Shapiro is president and CEO of the Consumer Electronics Association (CEA), the U.S. trade association representing more than 2,000 consumer electronics companies, and author of the New York Times bestselling book, "The Comeback: How Innovation Will Restore the American Dream."

 
 
 

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