Last September we renewed our earlier pleas to Congress to 'pick' the four low-hanging initiatives that would, if the administration and Congress together would only pick them, quickly create millions of new jobs. They were and remain:
1. Buy-Domestic Procurement Requirements. All infrastructure projects funded and guaranteed by the federal government should require purchases to be made in America rather than overseas, consistent with our international trade agreements. As well, in order to qualify as "Made in America," at least 75% of the content should have to be manufactured within our borders. Specifically, Congress should:
2. Infrastructure Investment. After years of under-investing in public infrastructure, America faces an infrastructure deficit of $3 trillion that is impeding economic growth and undermining our economy's efficiency. We need to spend $2.2 trillion just to meet America's core infrastructure needs, according to the American Society of Civil Engineers.
The administration and Congress should commit to at least $2 trillion of infrastructure spending over the next 10 to 15 years using the resources of a new National Infrastructure Bank that would be an independent financial institution owned by the government and supported by a soft federal guarantee on the order of $200 billion. This federal guarantee, appropriately structured, would not need to be 'scored' for budget purposes given the numerous layers of investment above it. In turn, the Bank should be able to invite private investment, notably including state and local government pension plan investments, aggregating about $1.8 trillion.
Each $1 billion of infrastructure spending funded by the Bank would create around 25,000 permanent jobs. Two trillion dollars of such spending could equate, over the years, to as many as 50 million new jobs.
3. Credit for Small and Medium-Sized Business. Congress should authorize Federal Reserve-related incentives to accelerate commercial bank lending to small and medium sized enterprises, especially those in the manufacturing sector. As it is, such lending, albeit hard to determine precisely, appears to be down on the order of 20% (or more) from its 2007 level before the Recession began. Such incentives could, most easily, simply include an appropriate reduction in the amount of required Tier 1 bank capital.
4. Trade with China. We need to reform our trading with China, as follows:
The fundamental problem back in September when we last urged Congress to take the actions set forth above and the one which persists today is simple economic arithmetic: we need to create more than 18 million jobs in order to be at full employment in real terms, and every month that we delay we need to create at least 150,000 more new jobs just to keep up with population growth. Yet traditional jobs programs -- whether training or tax breaks or credits -- are by nature 'smallish' and can create at most thousands of jobs and certainly not the millions we need.
With the largely jobless recovery continuing -- only 115,000 new jobs created in April - it's far past time for both Houses of Congress to work with the Obama administration to get really serious about large-scale job creation. Specifically with Congress, President Obama needs to spend his political capital in moving initiatives forward -- initiatives that will be central to his reelection campaign and top priority items during the rest of this Congressional year including the lame duck session.
The alternative of totally leaving job creation to the private sector did not work under President George W. Bush, when the Recession was just starting and the magnitude of the impending real unemployment crisis was unknown. And it certainly won't work in the still-troubled economy we have today, with all respect to Governor Romney who seemingly believes otherwise.
As we await enactment of the four initiatives above which are still there for the picking -- and why PART 2 to our earlier writings is now necessary -- must now be added: (1) especially and most urgently, the pending highway bill (S. 1813); (2) President Obama's largely ignored initiative to immediately repair the nation's schools in a big way; and (3) expansion of the tax credit program for investments in manufacturing facilities for clean energy technologies, which was part of the American Recovery and Reinvestment Act and has proven highly effective in job creation.
These latter three initiatives, which almost no right-minded policy maker and economist can believe aren't being acted on, are the 2012 version of "shovel ready projects". Depending only on how much is actually committed to the programs, there is nothing in the very short term that could better and more meaningfully jumpstart our still troubled economy and substantially chip away at the nation's massive real unemployment challenge.
Not only would these initiatives materially jumpstart job creation in the immediate term, but it is likely that they would at once both reignite the debate in Congress on the four 'low hangers' that we first began to write about years ago and, as well, give corporate CEOs the confidence they need to start spending, on their own new investments and hiring, some of the $2 trillion now sitting fallow in their own treasuries. It's all that eventual combined spending which will sustain long-term job creation.
The school repair and renovation opportunity is such an obvious jobs creator -- and moral imperative -- that it needs no elaboration and really just a major push from Congress.
As for more clean energy manufacturing tax credits, the original $2.3 billion of credits for advanced energy manufacturing facilities will, when fully used, generate more than 17,000 jobs, while the matching or companion $5.4 billion or so in private sector funding will likely generate up to 41,000 additional jobs. These are meaningful numbers for sure, but they immediately pale when the magnitude of this energy sector is measured and the number of real unemployed workers is considered.
President Obama just announced (on May 8) that he wants Congress to extend this program and materially expand it. When Congress has done this, the program will, if it continues to follow its statutorily specified review criteria of greatest domestic job creation (both direct and indirect) and greatest potential for technological innovation and commercial deployment, create not just thousands of great new American jobs but rather millions of them in manufacturing facilities producing everything from solar, wind, geothermal, or other renewable energy equipment to electric grids and storage for renewables to fuel cells and microturbines to equipment for refining or blending renewable fuels.
The big immediate opportunity, however, is the pending highway bill and the projected 2.9 million jobs it would almost immediately create before the summer and fall construction seasons bleed away. This bill is, in fact, such an obvious massive, immediate job creator that if the Republicans in Congress continue to stall it from passing out of conference, there can be no better example of just how extremist in their governance they have become.
Unless the real unemployment jobs crisis -- with 26.7 million women and men still unemployed in real terms and a real unemployment rate of 16.6% -- is frontally challenged by pursuing all of the low-hanging job-creating initiatives -- of which four has now become seven -- it's not possible to anticipate a sustained economic recovery that fully revitalizes the middle class. But when they are picked and enacted, then the engines of economic growth will start to turn over and really roar.
Leo Hindery, Jr. and Leo W. Gerard are co-chairs of The Task Force on Jobs Creation. Hindery is also founder of Jobs First 2012 and a member of the Council on Foreign Relations. Gerard is international president of the United Steelworkers and a member of the executive council of the AFL-CIO.
Follow Leo Hindery, Jr. on Twitter: www.twitter.com/leohindery
Dina Gachman: Your Parent's Basement: The New Post-College Vacation
Alan Grayson: Unemployment: Why
David P. Angel: Even in Bad Times, Colleges Can Make Education Pay Off
Sooner or later somebody has to say it "Americans have become fat and lazy - literally and in terms of what we're willing to take on. We could lead the World and restore our economy, if we focused on solving problems. Regarding job-creation, it will never come from government programs and it never has.
As a nation we have lazily become very incremental about everything, including innovation. Small steps are all we’re willing to even consider. SOLVE problems with economically-viable solutions and the resulting "demand" will create jobs.
My work is here: http://www.Solutioneur.com/.
Solve something. THAT will make a difference.
1) Build millions of miles of bike and horse paths
2) Replant diversified forests, grasslands and hedgerows
3) Tear down derelict buildings and parking lots and plant urban farms
4) Retrofit all buildings
5) Build light rail and trollies
6) Clean up every creek, stream, river, lake, beach
7) Put solar hot water and micro wind on all buildings
8) Develop clean energy
9) Put water catchment on all buildings
10) Modernize water, sewage systems
11) Put all power lines under ground
OH! Great post..I was so impressed I've found this kind of blog..Thanks.
janet
http://thinkbynumbers.org/blog/government-spending/corporate-welfare/corporate-welfare-statistics-vs-social-welfare-statistics/
2) We already invest plenty in America for a developed nation. There is no need for using infrastructure as a make-work platform to buy more votes and provide more payola to special interests. Nothing like more bridges to nowhere and airports in nowhere.
3) Another dog with fleas. Let’s let politicians decide how money is parceled out to small businesses instead of free markets. They would be really good at it…Solydra as a go-forward business model is nonsensical?
4) China is not the problem, it is the symptom, just like Taiwan and Korea were before them and Japan before that. We are uncompetitive, no amount of beating up on more competitive countries is going to fix that. Capital will not come back to the US, it will simply move to Vietnam or Indonesia, etc. You cannot improve America’s Terms of Trade by attacking more competitive countries instead we must be more competitive, that means lowering tariffs, reducing the price of energy, taxes, minimum wages, etc. Things that are highly unpalatable but the real problem; not China, who is simply the trading boogieman of the moment.
Kai
As for getting the best deal, even if it costs Americans jobs? We've been "getting the best deal" for a while now, and crummy substandard Chinese made goods flood our markets and unemployment is high, was it worth it? Was it really the best deal?
When we open our markets to all chinese made goods, and they block our goods or sabotage or copy ours in their markets, AND devalue their currency by 40% to make their junk even cheaper, they are the problem. The solution is not abandoning environmental regulations or worker protections or dropping everyone to minimum wage.
You state, ‘When our nations infrastructure overall is rated D- by a consortium of engineers, we've got a problem. Things need fixing.’
You mean a consortium of people that get paid by building big infrastructure projects unsubjectively determined that they should be allowed to build more stuff…go figure. It is like asking taxi drivers if we should limit personal cars in the city, or asking football team owners if we have enough stadiums…
You state, ‘Do you like driving across D rated bridges? Does it make you feel safe? How about if you happen to be on it when it goes?’
So you say that the infrastructure money that we spend now is being siphoned off into public union pensions, in effect becoming a wealth transfer engine for public unions instead of being used to maintain our bridges….note to self: make it mandatory that all infrastructure be non-union and privatized.
Good point. Thanks for pointing out how privatization is what is required to get our bridges back in shape.
You continue, ‘We've been "getting the best deal" for a while now, and crummy substandard Chinese made goods flood our markets and unemployment is high, was it worth it? Was it really the best deal?’
A) Chinese goods are not all that sub-standard. The iphone is well-made.
c) Even so, yeah it was worth it. How do we know? Because the consumers said it was worth it. They are the ones that determine if a product is worth it…not you and not Congress.
You state, ‘When we open our markets to all Chinese made goods, and they block our goods or sabotage or copy ours in their markets.’
GM’s biggest foreign market is China, Apple makes a killing in China. What are they blocking?
You continue, ‘..AND devalue their currency by 40% to make their junk even cheaper, they are the problem.’
Wow, they are giving us free aid by giving us goods that are below what they should be. To whom do we send the thank you note. It means the poor in America are better off. But your fears that the currency is 40% undervalued is overblown….I would think it not that undervalued.
You state, ‘The solution is not abandoning environmental regulations or worker protections or dropping everyone to minimum wage.’
Why not relax both. Not all regulations are good. Those that are not can be removed.
Kai
This is where your argument is nonesensical: we do not and have not invested in America, specifically infrastructure. By answering the "bridge to knowwhere" is proof you are ignorant of our actual needs. Over 26,000 bridges at or below a "D" rating and now up to 5 million ,miles of roads in this country rated "subpar". The "bridge to knowwhere" only illistrates the need to shutoff the draining faucet of earmarks lobbyists write into bills that our uneducated politicians run with - purely for campaign cash.
Solydra only emphasises the need to Banking reform - be it SBA of traditional financing.
And we can certainly perform as a manufacturing country - like China by doing what they do - subsidize manufacturing and lobby for no tariffs and when that does not work, devalue their currency to keep products cheap - the subsidy takes away the profit edge. Now we can compete.
Really…so how much are we down on infrastructure as a percentage of GDP spending relative to what it was in the 1980’s?
You state, ‘And we can certainly perform as a manufacturing country - like China by doing what they do - subsidize manufacturing and lobby for no tariffs and when that does not work, devalue their currency to keep products cheap - the subsidy takes away the profit edge. Now we can compete.
Or we can reduce taxation and stop double-taxing investors. 70% of corporate tax falls on labor through reduced opportunity and wages.
Kai
http://www.counterpunch.org/roberts10082010.html
Paul Craig Roberts: America's Third World Economy
"For a number of years I reported on the monthly nonfarm payroll jobs data. The data did not support the praises economists were singing to the “New Economy.” The “New Economy” consisted, allegedly, of financial services, innovation, and high-tech services.
This economy was taking the place of the old “dirty fingernail” economy of industry and manufacturing. Education would retrain the workforce, and we would move on to a higher level of prosperity.
Time after time I reported that there was no sign of the “New Economy” jobs, but that the old economy jobs were disappearing. The only net new jobs were in lowly paid domestic services such as waitresses and bartenders, retail clerks, health care and social assistance (mainly ambulatory health care services), and, before the bubble burst, construction.
The facts, issued monthly by the US Bureau of Labor Statistics, had no impact on the ”New Economy” propaganda. Economists continued to wax eloquently about how globalism was a boon for our future.
The millions of unemployed today are blamed on the popped real estate bubble and the subprime derivative financial crisis. However, the US economy has been losing jobs for a decade. As manufacturing, information technology, software engineering, research, development, and tradable professional services have been moved offshore, the American middle class has shriveled. The ladders of upward mobility that made American an “opportunity society” have been dismantled..."
Marvin E. Fox
Pass immediately a tough, robust version of National Mandatory E-Verify that makes it as difficult as possible for illegal immigrants to work.
We've seen that when ICE does major raids on employers that hire illegals, US citizens take those jobs practically the next. The raids on Chipotle last year are a great example of this, netting hundreds of new jobs for US citizens.
(And as far as ag work goes, put as many illegal agricultural workers on the H2A guest worker visa as needed, reform the program if necessary.)