It's becoming evident that rather than the political gridlock, such as the congressional supercommittee's obsession with spending cuts, we need to worry about economic growth and jobs.
There are some very good ideas on how to bring back economic growth and jobs, as in President Bill Clinton's newest book, "Back to Work". And economists such as Christina Romer, former Chairman of Obama's Council of Economic Advisors, in a recent New York Times Op-ed are pleading with the Fed's Ben Bernanke to actually target a growth rate that will both create jobs and keep inflation within a manageable range.
What? You mean the Federal Reserve's QE-1, 2, and 3 buying of securities wasn't doing just that? Well, no. It has accomplished the goal of keeping both short and long term interest rates low, but that hasn't done anything for setting expectations of higher growth. In fact, the Fed just downgraded its own predictions of future growth. If anything, such low interest rates reflect deflationary expectations, which is the real problem. Companies won't hire if they can't raise prices, while consumers' incomes fall in such an environment, stifling demand.
Dr. Romer and other major economists are beginning to insist the Fed should actually set what is called 'nominal' (i.e., before inflation accounted for) Gross Domestic Product growth target at the long term growth rate of around 5 percent. That way, expectations are raised for economic growth, without abandoning an inflation target of say, 2 percent, the current Fed inflation target.
How else can we boost demand for goods and services that is the actual driver of economic growth? We have discussed in a prior column how necessary it is for consumers -- who power 70 percent of growth -- to spend more, which in turn creates greater demand, which in turn creates more jobs in a virtuous circle. But they won't if their confidence remains low, which surveys show causes them to spend less.
Former President Clinton has much more to say in "Back to Work" that directly addresses how to put Americans back to work, and he should know.
"During my administration we had four surplus budgets and began to pay down the national debt," he says; we eliminated sixteen thousand pages of federal regulations; we cut taxes on the middle class, working families of modest means, and income from capital gains; we reduced the size of the federal workforce to its lowest level since 1960, and the economy produced 22.7 million new jobs."
How did he do it? By emphasizing cooperation rather than competition between government and the private sector.
"I believe the only way we can keep the American Dream alive for all Americans and continue to be the world's leading force for freedom and prosperity, peace and security," said Clinton, "is to have both a strong, effective private sector and a strong, effective government that work together to promote an economy of good jobs, rising incomes, increasing exports, and greater energy independence."
Why is strong government so important? It is what engenders both business and consumer confidence, which are still at record lows. And without that confidence, consumers won't spend to keep up demand, as we said, and businesses won't hire in anticipation of higher growth.
"What's the smart, effective way to do that?" asks Clinton. "With a strong economy and a strong government working together to advance shared opportunity, shared responsibility, and shared prosperity? Or with a weak government and powerful interest groups who scorn shared prosperity in favor of winner take all until it's all gone?"Studies have shown that only by sharing prosperity can we really create strong economic growth. And right now we rank near the bottom in income inequality, according to the much cited CIA World Factbook. So there is a lot of work to be done to restore confidence in Americans' future.
Follow Harlan Green on Twitter: www.twitter.com/HarlanGreen
It's called spending to much money and creating far to much debt. Ron Paul will balance the budget.
So, by giving them jobs instead of land and the resources they needed to become self sustaining Roosevelt created nothing more than a nation of trained dogs ready to go to war in the name of "paitriotism". Had the same effort gone into creating free eco villages built and run by the residents and their families it is unlikely that we would even have a war. Men would not be interested in leaving families and land they controlled and that sustained them. Being thrown back into unemployment and hunger after the camp terms ended made them perfect candidates for further enslavement in a war machine.
We don't need no stinkin' jobs! We need land and the resources to make ourselves self sustaining, truly free men - then all our energy, creativity and joy can go to creating an economy and a government that serves US.
Then let's get expert at sharing prosperity and "REALLY create strong economic growth".
Last night I watched the PBS film Civilians Conservation Corps about Roosevelt's solution to the poverty and desperation in the 30s. His solution was to create work camps all over the United States and he put millions of men to work repairing the environment that had been destroyed through deforestation. The previously starving and desperate men were given 3 great meals per day, 6 hours of labor, new clothes and a wage of $1 per day, plus an education if they wanted it. These previously starved and desperate men were thrilled to have food, to learn to live with others of every background and to get trained in the discipline of work. They made an enormous contribution to the improvement of the environment. Later, they were well trained for fighting in the 2nd world war and moved smoothly into that role.
To be continued...
US labor costs many many times as much as Foreign Labor according to the DOL website:
ftp://ftp.bls.gov/pub/special.requests/ForeignLabor/ichccpwsuppt01.txt
The cost of Extended Unemployment Benefits, National Healthcare Reform, vacations, holidays, sick pay, and social security costs are also added to US company payroll costs and economically preventing the location of new manufacturing jobs into the USA, and/or preventing the keeping of existing US jobs in the USA.
The increasing cost of compliance with existing and future environmental laws is deterring the creation of any new jobs the USA.
The cost of electrical energy that is generated in the USA in compliance with US EPA regulations was at many times the cost for the same amount (kilowatt hour) of electrical energy in most Asian countries and is still about twice the cost of US electricity
50fen/kwh = 0.078666 USD/kwh compared to $0.13-$0.15 kwh in USA
http://news.xinhuanet.com/english/2009-11/19/content_12492364.htm
The EPA is the main cause of the high electrical costs in the USA.
These costs are hindering the US businesses that are economically competing for obtaining manufacturing jobs for US citizens in the USA instead of those businesses having to relocate or create those jobs in/to foreign nations as allowed by US FREE TRADE AGREEMENTS.
Without some type of environment consideration for the rampant industrialization that you laissez fair folk advocate, the Mississippi would look like the late 18th century Thames. I mean there's a flotilla of trash in the pacific the size of friggin Texas, and you believe that the answer is further deregulation? Sorry, but the world cannot be your hog-waller....
My belief in progressive tax rates and redistributive government programs is to save the best parts of capitalism from being destroyed by the worst parts.
US consumrs will almost always NOT PAY anything EXTRA for any US made product.
The US government must stop creating new legislation that drives US businesses and US jobs to foreign countries.
The US government should repeal the laws that they created that caused US businesses and US jobs to relocate to foreign nations.