But before we go picking this fruit, let's do some old fashioned, CNN-type "Point-Counterpoint," in order to better appreciate the massive jobs-creation predicament in which the middle class and workers are currently mired and the completely contradictory economic and political environment in which our nation is similarly mired.
POINT #1
President Obama told an audience on the final day of his recent bus tour through the Midwest, "My basic argument to [Congress] is this: We should not have to choose between getting our fiscal house in order, and jobs and growth. My attitude is, get it done. And if they don't get it done, then we'll be running against a Congress that's not doing anything for the American people, and the choice will be very stark and will be very clear." (New York Times, 8-17-11)
BACK-STORY
Yet it was President Obama who praised Congress directly for its passage of the deficit reduction Bill and himself indirectly for his own shepherding of the Bill through Congress. A 'Bill' that at once effectively foreclosed Congress from raising any new tax revenues to pay for the initiatives he now wants to advance. And a 'shepherding' based on the same sort of unbalanced negotiating style which last December extended the Bush tax cuts for the extremely wealthy even after he swore this was a fault line he would never cross.
On August 6, Drew Westen wrote an analysis of President Obama ("What Happened to Obama?", New York Times). Let me quote him here:
Like most Americans, at this point, I have no idea what Barack Obama - and by extension the Party he leads - believes on virtually any issue. The President tells us he prefers a 'balanced' approach to deficit reduction, one that weds 'revenue enhancements' (a weak way of describing popular taxes on the rich and big corporations that are evading them) with 'entitlement cuts' (an equally poor choice of words that implies that people who've worked their whole lives are looking for handouts). But the law he just signed includes only the cuts.
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POINT #2
White House adviser David Plouffe believes that the unemployment rate won't hurt President Obama's re-election chances. He says: "The average American does not view the economy through the prism of GDP or unemployment rates or even monthly jobs numbers. People won't vote based on the unemployment rate, they're going to vote based on: How do I feel about my own situation? Do I believe the President makes decisions based on me and my family?" (Bloomberg, 7-07-11)
BACK-STORY
Yet at the end of August, there were, in real terms, 29.3 million unemployed Americans, including 14.0 million "officially" counted by BLS, plus -- all uncounted -- 8.8 million who were "part-time-of-necessity", 2.6 million who were "marginally attached" because they haven't searched for a job in at least four weeks, and 3.9 million who were "discouraged" and have removed themselves from the labor force. This total number has increased by 4.7 million lost jobs just since the January 2009 Inauguration.
Mr. Plouffe, I for one wouldn't make the bet you're making on behalf of our President that these 29.3 million voters 'won't hurt his election chances'. Right now, only 37% of voters overall approve of how he's dealing with unemployment (CNN/ORC International Poll, 8-24-11), which is pretty darn low.
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POINT #3
By a margin of 67% to 29%, voters prefer that Washington focus on job creation rather than deficit reduction. "Creating manufacturing jobs in the U.S." and "strengthening manufacturing in this country" are the top voter priorities for President Obama. However, only 50% of voters believe that he's working to create manufacturing jobs; just 41% of voters believe Democrats in Congress are working to create jobs; and only 32% believe the GOP is doing so. (The Mellman Group and Ayres, McHenry & Associates, 7-28-11)
BACK-STORY
Of course compounding the tension between the President's rhetoric and his dealings with Congress is the recent memorandum to House Republicans from Eric Cantor, the Majority Leader, which said that the Republican agenda must include "stopping the discussions of new stimulus spending with money that we simply do not have." Senator Mitch McConnell, the Republican Minority Leader, simultaneously criticized "job-killing tax increases." (New York Times, 8-17-11)
So, Senator McConnell and Representative Cantor, if you are so obsessed with denying any fuel to the economy's drivers, how do you expect to even start the job-creation engines, much less keep them running?
And President Obama, speeches aside, when will we see a replacement for the extremely able Ron Bloom, who just stepped down as your Assistant for Manufacturing Policy? If and when there is a successor, will he have the standing and authority which were so obviously withheld from Bloom?
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POINT #4
"Economists generally judge [President Obama's] 2009-10 stimulus program to have helped, but to have been insufficient to overcome the deep downturn" (Ibid.). The proof of this 'insufficiency' is obvious in the dismal real unemployment and GDP figures -- and the needed response is just as obvious, which is more and better stimulus.
BACK-STORY
Yet with Congress and the administration only cutting government expenditures and not adding any new tax revenue, no less an acknowledged expert than Mohamed El-Erian, the CEO of the major bond firm Pimco, says that: "Unemployment will [now] be higher than it would have been otherwise, and growth will be lower. Withdrawing even more spending at this stage will make [the economy] ever weaker" (New York Times, 7-31-11). As to how much "ever weaker", a conservative estimate of the number of existing jobs which will be eliminated by the actions of the deficit reduction bill and of the upcoming associated special Congressional committee is 1.8 million.
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POINT #5
90% of voters support Buy American policies "to ensure that taxpayer funded government projects use only U.S.-made goods and supplies wherever possible." (The Mellman Group and Ayres, McHenry & Associates, 7-28-11)
BACK-STORY
Yet of the G-20 nations, the only one without an encompassing buy-domestic program for its top-of-government is the United States. And the reason is that our nation's multinational corporations, for their own self interests and very much at the urging of China, have persuaded Congress to ignore this imperative. This despite the fact that no single measure would do more to help resuscitate U.S. employment, particularly in manufacturing, than a buy-domestic government procurement requirement. Inexplicably, President Obama is himself opposed to buy-domestic requirements, because, according to a source, he thinks they "slow things down."
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POINT #6
59% of voters say that we need to "get tough with China and use every possible means to stop their unfair trade practices" (Ibid.). And the reason we need to get tough is because we now know that 90% or so of the cost differential between a good manufactured in the U.S. and its Chinese counterpart is due to Chinese subsidies -- often illegal -- in the form of low-cost plant locations, capital grants, below-market financings, tax holidays and, of course, massive manipulation of the Chinese renminbi. Two recent examples drive this home:
i. China to take shot at aircraft duopoly (Financial Times, 8-04-11)
"China will make aircraft manufacturing a cornerstone of its 'new strategic industry' plan...that will lock in long-term government support for the nation's fledgling rivals to Boeing and Airbus. Beijing is close to announcing new rules to help its domestic aircraft manufacturers so that they can provide a big slice of the 4,000 aircraft -- worth $480 billion -- that China is expected to buy over the next 20 years."
ii. Solar Company That Got Federal Loan Shuts Down (New York Times, 8-31-11)
"A California solar-panel manufacturer once touted by President Obama as a beneficiary of his administration's economic policies -- and the recipient of a $535 million federal loan as part of the 2009 stimulus package -- is laying off 1,100 workers and filing for bankruptcy....Solyndra LLC is the third solar company to seek bankruptcy protection this year....The price for solar panels has tanked in the last year largely because of heavy competition from Chinese firms."
BACK-STORY
As long as whoever is Treasury Secretary is seemingly determining our trade policies with China -- first Bob Rubin, later Hank Paulson and now Tim Geithner -- it's hard to be optimistic about ever seeing fair free trade with China, particularly in high-value goods. But maybe, just maybe, the Barack Obama who promised the United Steelworkers on July 2, 2008 that "Change is knowing that for trade to work for America, it has to work for all Americans; that we have to stand up to countries that are manipulating their currency or flooding our markets with subsidized goods" will show up soon, take back control of his administration and give us such "change".
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If all this doesn't give you agita -- and maybe even a sense of hopelessness -- then very little will. Nonetheless, there are four significant low-hanging initiatives that would, if the White House and Congress would only pick them, quickly create millions of new jobs.
1. The special Congressional committee should right now commit to $1.00 in reduced tax expenditures for the wealthy and closed loopholes for every $1.00 in further spending cuts.
2. With a new leveraged National Infrastructure Bank as the funding source and a Buy American requirement in place, commit to at least $2 trillion of infrastructure spending over the next decade. And make sure that at least $10 billion is immediately obligated in the pending legislation for the initial capitalization of the Bank so as to leverage upwards of $600 billion in private funds, to get investments rolling.
3. Adopt incentives to accelerate commercial bank lending to small and medium sized enterprises.
4. Enact the pending "Currency Reform for Fair Trade Act of 2011." Stop the U.S. government from entering into a bilateral investment treaty with China until China makes WTO-compliant its Indigenous Innovation Production Accreditation Program. Go after all of China's illegal subsidies, not just its currency manipulation. And put a halt to China's persistent theft of America's valuable intellectual property, which the U.S. International Trade Commission estimated recently would create up to 2.1 million new direct private-sector jobs.
By contrast, President Obama's prime-time 'jobs' speech this Thursday is expected to include only (i) extending the cut in employees' payroll taxes and unemployment compensation and (ii) enacting a job-creation tax credit, more targeted tax breaks for hiring from specific groups (such as the long-term unemployed), and a new jobs training program. He'll also for sure propose renewed tax write-offs for businesses' capital investments and an overhaul of patent law to spur innovation, and demand passage of the three pending free trade agreements with South Korea, Colombia and Panama. And he may propose block grants to repair schools.
The problem, however, is simple economic arithmetic: we need to create more than twenty million jobs ASAP. Yet traditional jobs programs of the sort being proposed - whether training or tax breaks and credits -- can never create more than thousands of jobs, and certainly not millions. And the pitifully unbalanced South Korea free trade agreement, for one, will indisputably kill off even more high-quality American jobs, not create them ("These Three Free Trade Agreements Are Clunkers -- And They Need Some Courage", Huffington Post, 7-12-11). Only the initiative to repair schools -- the 2011 version, apparently, of "shovel ready" -- could be meaningful, and that depends on how much is actually committed to the program.
Again, the four initiatives listed above would materially jump start job creation in the short term. Notably, they would also give corporate CEOs the confidence they need to start spending, on new investments and hiring, some of the $2 trillion now sitting in their treasuries. And it is that eventual spending which will sustain long-term job creation.
Then the public and private engines of growth -- together -- will start to turn over and really roar.
Leo Hindery Jr. is chair of the Smart Globalization Initiative at the New America Foundation and an investor in media companies. He is the former CEO of AT&T Broadband and its predecessors, Tele-Communications, Inc. and Liberty Media.
Follow Leo Hindery, Jr. on Twitter: www.twitter.com/leohindery
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Watch out for the new American Foundation a DLC retread:
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=132x3603817
http://newamerica.net/about
What we need to do is big: Tax the rich like it's 1960. FDR the banksters, end the wars cut the MIC by 90%, invest massively in Citizens safety net, infrastructure and green energy.,
So vote in the Democratic primaries.
Problem is, Not all Dems are on our side.
Not the ruling big money funded Obama Clinton Rahm Blue dog new dem DLC corporatist anti-populist folks:
http://en.wikipedia.org/wiki/Democratic_Leadership_Council
So we need to vote in real citizens progressives:
http://cpc.grijalva.house.gov/
The Kucinich, Dean, Grayson type folks.
I would like to see a Primary challenge to Obama, but I don't expect it.
But in the general election we must vote for Democrats straight across the board, including whomever the Democrats select as their candidate, even if it's Obama.
Or the Republic is lost.
What is a "reduced tax expenditure for the wealthy?" Wealthy individuals don't get money spent on them. I think he means the government should't let a person who earned the dollar keep it?
That is the problem with the left. They really see that money as the government's money and it is only the goodness of their hearts that they would give it back to someone. Its the person's money to beging with!
"The tax code’s countless credits, deductions, and exclusions let people keep a portion of their earnings, provided they use the money how the government wants them to use it. Tax loopholes therefore have a lot in common with government spending: they give power to politicians, inhibit freedom, reduce economic output, unjustly enrich special-interest groups, et cetera" http://www.cato-at-liberty.org/there-aint-no-such-thing-as-a-tax-expenditure/#utm_source=twitterfeed&utm_medium=twitter
I think the statement " provided they use the money how the government wants them to use it" says alot about why "tax expenditures" would be a correct term. If you didn't use the money in the way the govt. says, you don't get the credit, deduction or exception. In this case the money that you used as a charitable contribution, or untaxed contribution to your 401-k is an uncollected tax liability. Otherwise, how could the government limit the way you use it.
I know why the author wants to say it this way. He wants to equate it with expenditures on food stamps and other social welfare. The difference here is that the poor people receiving the welfare are receiving OTHER PEOPLE'S MONEY as an expenditure or redistribution by the government. Letting someone keep HIS/HER own money is NOT an expenditure.
The same principle holds for unions in America. It is not generally the hourly wage that is the killer, but the restrictive work rules.
From the standpoint of the American people, Congress' and the President's actions are wildly and breathtakingly ludicrous. But these people aren't working for the American people. They are lackeys for the super wealthy. From their viewpoint, our supposed leaders aren't doing a bad job at all.
Isn't it time for some smart people to write about how we can compel our supposed leaders to do what is right for the majority?
There are plenty of solutions. How exactly do we get the President and Congress to do the right things?
No one may collect more to obtain an office than the office pays. Congress may provide additional funds. No one may contribute to a candidate for office who can not vote for that candidate.
The first sentence is to control who gets into races. It would also be the basis for how additional funds from Congress is provided. The second part is to have Congress provide most of the funds for races, public financing of the election process is the only way to rescue the country from the corporations. The last part is to ensure that it is the people being represented who the office holder is beholden to. For example Michelle Bachmann collected $13 million to run for Congress last time, almost none of it came from within her district. You have to ask, who does she really represent, the people of her district or the people who gave all that money? The people who gave all that money think she is bought and paid for
Enact the pending "Currency Reform for Fair Trade Act of 2011." Stop the U.S. government from entering into a bilateral investment treaty with China until China makes WTO-compliant its Indigenous Innovation Production Accreditation Program. Go after all of China's illegal subsidies, not just its currency manipulation.
As was made clear in thearticle China already has a "Only Buy China, Nothing Else" progarm in place when are we going to implement a response of "Only Buy Amercan, Nothing Else" program?
A few points on your points:
1) We can reduce tax expenditures for the wealthy, but there is only limited money there. The real gain will be in reducing tax expenditures for families with kids, home buyers, small business owners, and the poor and middle class since that is where a bulk of our tax expenditures to any one class of people go. Unless of course you want to reduce tax expenditures for businesses and subject our businesses to the full brunt of our extremely high tax rate?
2) The national Infrastructure Bank is an awful idea. Do we really need more high-speed gravy trains to nowhere? Our expenditure infrastructure in terms of GDP and in real terms has not been cut at all since the 1960’s. Not sure why all of a sudden no perceive that we do not have enough money to grow our infrastructure. Perhaps it has something to d with the fact that a bulk of our infrastructure spending now goes to public unions that operate and maintain them instead of to growing them. Better to take public unions out of the mix in our infrastructure and instead privatize. It is a more elegant solution to an increasingly serious problem.
You rightfully ask, ‘…50% of Americans pay no federal income tax right now. How can taxes for families be lowered when they pay nothing already?’
We are talking about ‘tax expenditures’, which is another way of saying ‘tax cuts’ or ‘tax rebates’ or simply ‘tax revenue transfers…i.e., taking from someone, say the middle class, and giving it them’. In other words we lower the amount of tax breaks they get.
Infrastructure
We spend as much as we ever do on our infrastructure
http://cafehayek.com/2011/09/crumbling.html
I did not say a bulk of our CAPITAL spending is spent on operations, I said a bulk of our total infrastructure spending is on operations. Infrastructure on operations and maintenance (non capital expenditure) is 55% of infrastructure spending. Please not that does not include trailing liabilities, pensions, health care, etc, that fall in later years, in California it is estimated that operations are 80% of their budget (though I cannot find the report).
http://www.cbo.gov/doc.cfm?index=11940
Race to the Bottom:
Why do you want a race to the bottom for the poor taxpayer that has to fund these entitled positions and who cannot make ends meet? Why push them further down by allowing government workers to prey on them as if they are serfs? Way to support a race to the bottom.
Kai
It is the person's money to begin with and the government is taking it in taxes.
You should read the Constitution sometime in the future.
4) I actually have no problem with this point but blaming China for our trade problems is really just blaming the symptom, not the disease, and it will not fix our trade deficits. The disease is a combination of our government borrowing and poor labor, environmental, and tax laws that make manufacturing in America not an option.
Finally, your argument against free-trade agreements is misplaced. It is penalizing those industries that can compete globally while benefitting those that cannot. This is our loss.
Kai
You ask, ‘Banks will only lend to those with unrealisti¬cally high credit worthiness¬. How is it that a business today that never had a problem borrowing or repaying in the past can't get a loan now.’
Maybe because their business is no longer deemed credit worthy, or perhaps the standards that were applied when they first took out the loan were too lax and now that has been rectified. You want out banks to be prudent and not fail, right?
You state, ‘There was a reason why in 2009 almost half the republicans in Congress voted for the largest income tax rate increase in US history (from 35% to 90% on AIG bonuses.)
Yeah, and so?
You state, ‘2/3rds of corporation in America pay no taxes. how is zero taxes a problem?’
It is called CFL’s. They carry forward losses made in one year and offset them against profit made in later years. So profit today is offset against losses made yesterday. It allows for profit and loss smoothing and is considered a good thing since it helps companies not go out of business for one bad year of business and results in MORE JOBS and it is done by ALL developed nations. I am surprised you do not know tax code.
You state, ‘The idea that labor is the problem can only come from someplace or someone who doesn't work or lives somewhere that is highly subsidized where others pay most of the bills and so the realities of the everyday world are not clear to them.’
I do not know what you do but I work for a living. I am labor. I collect a wage. More importantly, I grew up on a reservation in North Dakota and did everything to get out, my first job was at a K-Mart, and I worked in poverty eradication in the Philippines and China until I was 30, I know work for an investment bank. So how does that fit in with your theory?
Finally, your point on the cost of labor? It was not a central theme in my post above? My point on labor laws is that they are restrictive, as in the Boeing case.
Kai
Its not a new system, its the way states with corp taxes handle revenue spread across multiple states. Its not hard to audit!
Its impossible to gain that system w/o tax evasion! Use a lower tax rate! You will collect more taxes..
Get rid of the IRS waivers of what was tax evasion under Bush to large miltinationals where sales revenue(to the tax haven) and expenses(to here) were run thru Offshore Tax havan P.O. boxes.. and has multinationals paying.
Have a 2 tier tax rate system for corporations. The lower rate, if the percent of your sales here is LT or equal to your employees here so you are rewarded when you have more jobs here, that are inline with your sales. Use some of the increased tax revenues to offer zero interrest loans to MFGs as in other countries.. And that hurts outsourcing more!
Regards
http://missingmistersmith.blogspot.com/2011/09/bill-clintons-common-sense.html
Fine, let's go back to the equivalent for 1954 and tax those making $373,650 in today's money at 72 percent. Back in the fities, people still managed to live a comfortable lifestyle despite that 72 percent. The greed disease in our nation is destroying us.
Let's just get rid of all deductions and loopholes and have a flat tax of say 16%.
Tax breaks for corporations has not created one job in U. S. maybe China.
Put tariffs on everything sold here but not made here, 35% on China same as they have on us. Don't G-20 countries do this?????
Terminate all work visas until every American worker has a job. Only job law radical republicans passed in Aug, 2011 before they went on vacation was to import nurses.
Tax the heck out of Multi-National corporations who take our jobs overseas. Lower tax on ones who create good paying jobs here if they are doing it.
Do not let foreign students go to Universities which receive research money from tax payers, they have manufacturing plants ready to go, we do not.
Regards
It may be impossible to purchase repair parts or some electronics made in the USA, but if we all pledge to ourselves to do the very best we can to only purchase American made, then the US companies who are making products overseas will have no choice but to come back home and hire employees here.
Regards
It's common knowledge that goods can be manufactured for less in countries like China, yet Solyndra thought it would be a great idea to manufacture solar panels here. If they had instead bought Chinese solar panels and built their business around selling and installing them in American homes, more people would win.
This is why every country in the world has national industrialization plans.
Germany has much higher wages and taxes, 100% unionized and like China gives exporters an 18% rebate on export sales!!!!!!!! The rest of the wrold all have such export rebates and all pother countries with trade surpluses have national helathcare whose cost is far less and not at all in the cost of goods made. With automation, rpobtoics, labor is just 7% of the cost of MFG.. so its not the problem as Germany proves... also where MFG goes so does hightech/design and enginneering and small business that supported the 60,000 factories that closed under Bush.
Regards
You are like those people that protest the WalMart coming to town because the mom-and-pop stores will go out of business. That would only be true if WalMart provides products at prices and service levels. You will be found shopping in the WalMart aisles paying $2.29 for deoderant rather than $3.99 at the local bodega.
Now if you think 250K is not doing well, then just imagine the avg american living on 1/5th as much!
I dont think 250K per year is wealthy./.. but then I cant imagine what it is to live on 50K with 2 kids. Of course pre reagan, amt, above that almost adjusted for inflation were taxed between 70 and 91% over the previous 30 years... America's Golden years..
Regards
Regards
By holding on to that much money in order to force certain political outcomes, in time of financial emergency which the jobless rate in America represents, the US based multinational corporations are threatening the security of our country. Not all those who seek to overthrow the United States are foreign invaders.
Regards
Regards