This seems like Framing and Political Strategy 101 to me, but since few other people are talking in this way, let me just lay out a basic idea: all this talk about doing a stimulus package versus not doing a stimulus package is fundamentally besides the point. What we need is a comprehensive policy package that is very simply focused on one thing and one thing only: jobs.
I know the policy wonks on Capitol Hill may be confused by that paragraph because, they would say, well, a stimulus program would create jobs. Well, yeah, that is the idea of stimulus. But my point is this: the politics of a second stimulus package are a dead end. The politics of having a debate about a policy package that will create jobs is a helpful thing. Announcing a second stimulus package gets Democrats into a defensive crouch about why the first one failed, and gets us into that same "can we get to 60" dance with Ben Nelson, Arlen Specter, Olympia Snowe, and Susan Collins that caused the first stimulus bill to be pared back and rendered less effective.
Voters don't know what it means to say you are going to stimulate the economy, but they do know what a job is. And right now, what we need is jobs sooner rather than later. My point here is not to just rename the stimulus bill the jobs bill. In fact, there are quite a few things the White House and Congress can do to focus on jobs that don't involve just spending more, although more money will certainly need to be spent. Here is what I would include in a comprehensive package:
1. Take on, far more aggressively than now, the currency manipulation going on in China. Our balance of trade problem and big losses in our manufacturing sector will not be solved without aggressively dealing with the country that we have by far and away our biggest trade deficit with, and China's policy of currency manipulation is a huge part of the problem.
2. A serious industrial policy that helps emerging industries grow. Every other industrialized country in the world has an industrial policy that helps emerging industries quickly grow and create new jobs. Yes, it does mean picking winners and losers, but we need to get over our reticence about doing that so that we can help the industries with the most potential for producing big numbers of good jobs.
3. Force every big bank that was propped up during the financial collapse -- which is pretty much all of them when you include the Federal Reserve dollars sloshing around the system -- to actually make loans to businesses so that they can create jobs. This "money for nothing and your kicks for free" philosophy has to end. The big banks need to understand very clearly that we expect something more from them, after all they have been given, than merging with other banks and giving record bonuses to their executives.
4. Direct the Justice Department to actually use existing antitrust law (and then beef it up where necessary) to break up the big banks and other mega-corporations stifling small business and competition. Promoting real competition in these industries will produce real jobs.
5. Fundamentally restructure the corporate tax system to incentivize American job creation and dis-incentivize the outsourcing of jobs.
6. Consistent with what every other industrialized country in the world, and consistent with existing WTO rules, have our federal purchases (20% plus of the economy right now) buy from companies producing goods in America. Big business and media elites will scream protectionism, but it would just be doing what every other economic power does.
7. And yes, spend some more money -- on infrastructure, on green jobs, on state revenue sharing. On all those things that were foolishly cut in the last stimulus package by the Nelson/Specter/Collins/Snowe cabal. But this time, just add the money into the federal budget so the job-killing Senators can't screw things up with a filibuster.
I've said it before and will likely say it again: this economy will not recover, and Barack Obama will not have a successful presidency, without a laser beam focus on creating good jobs. Resuscitating the big banks, whether you believe that needed to be done or not, did not create any new jobs (although it did save a few bank executives' jobs, and I'm sure their record bonuses will someday trickle down to the rest of us. Or maybe not). What we need is not another short-term stimulus package, what we need is a real plan, a comprehensive plan, to create good jobs ASAP over the short and long term.
Unfortunately, that confidence does not exist. I wouldn't look for a recovery any time soon.
Mr. Obama is already PAST the point where he can save face.
Didn't work in the 80's. Didn't work in the 90's. Not working again in the 00's. Um, I'm no economist, but haven't we proven this theory wrong time and again? What will it take to get government to ignore the lobbies and invest in our future?
You can learn in depth how the tax subsidies given to big corporations harm this country's infastructure and how these corporations play the lobbying and "we won't build in your town" blackmail game to get these subsidies...
Exactly WHAT "subsidies" is Walmart getting? And exactly how are they taking people's paychecks?
Please reference David Cay Johnston's books about Walmart getting property tax rebates or building subsidies from local governments to locate in towns/cities/etc. I had long known about these type of issues (see other sources critical of Walmart et al) but Mr. Johnston lays them out in a clean and concise fashion. Cabellas is another example he used in one of his more recent books. The inequality of the subsidies seems to be that Walmart, etc has the lobbying/publicity game down so much that it is a profitable part of their business model. The little "main street" retailer can't approach the government officials and ask for subsidies as they (the local politicians) get no traction out of giving an existing small business money- where else is Darla's Dress Barn going to go- Darla lives in the town already? Those same politicians then can and do crow about all the "jobs and development" that they have "worked" to bring in when a Walmart is built and then operates. A point Johnston makes is that many subsidies get buried in fine print of contracts and/or annual company filings. Companies which benefit certaintly don't go out of their way to pubilize this corporate "welfare" while executives and other high ranking people whine about individual welfare "leaches". cont'd
"econo" refers to "cheap" not economics.Hope this clears some issues for you to think about. Please do not believe regular media but follow the money, always follow the money...
Well said, Mike Lux.
Thank you.
The American people need jobs to pay for things in America.
That is how we can recover.
Damn the banks and global corporations, save the People of America!
Unfortunately, the Foaming-at-the-mouth Right Wing and the I-see-racism-behind-every-tree Left Wing would both attack it and make sure it never happens.
The Right because it would actually work, and help rebuild our crumbling infrastructure and give lots of unemployed people work.
The Left because they would see it as RACIST because most of the people joining would be inner-city dwellers who would then be shipped to the wilderness to do hard labor (it is a construction corps after all, not a day camp.)
1.All of their workers and subcontractor workers are citizens legally in the USA
2. That the workers are paid at least minimum wages and taxes for the amount that the contract is for. No paying a subcontractor $50hr for 10 men to work.
people see their local taxes and fees, medical costs, untilities, energy, utilities, food and other costs go up yet their wages stagnate
you can onlyscrimp and save so much
If you want an unprecedented jobs package, then ignore what you wrote and do the following.
Eliminate the Guaranteed Rate of Return (GROI) utility model used in 48 states. Replace it with the Independent Service Operator (ISO) model used in California and New York. The Ca/NY ISO model needs one small adjustment for it to become a perfect system. Allow residential and small business producers to sell their excess capacity into the grid at market rates. Leave the solar, wind and biomass investment tax credits in place through 2011.
You will see an unprecedented job and maufacturing boom occur in America. Couple this to the cap and trade bill with all of the funds going to energy efficiency and a supercharged jobs and manufacturing boom will emerge. The GROI utility model promotes highly centralized power stations on the backs of ratepayers. It removes all competition for electric power production and does nothing to promote energy efficiency.
The ISO model which allows residential and small business producers to get paid market rates for their power promotes competition. Utilities with old and inefficient power plants will take them out of service because they will no longer be able to compete in this market. It will relieve the strain on the national power grid because gigawatts of power will be produced primarily where it is used.
I don't want to see a closed society or not participate in the global economy but the ease big corporations decide to send a job off-shore needs to be addressed as well.
I would also suggest that the number of work visa's for tech jobs in the US might warrant review. To many friends complain about going to "job fairs" and seeing foriegn nationals with work visa's competing for good tech jobs is increasing the frustration in trying to find work.
Our people are hurting and at some point, we need to take care of our own to allow us to regain our financial well-being before we start trying to employ the rest of the world. The more successful we are, the more successful the rest of the world will become.
This is a perfect example of the difference between industry and government. Only in government is the abject failure of a program justification to continue and even expand the program. In industry, a program that failed this spectacularly (and expensively) would be immediately discontinued, and an effort would be made to recoup any unspent funds and re-allocate them to a different program.
One thing about DC, regardless of party affiliation, it's a town full of slow learners... :(
even in its much diminished state mfg still employs more then the financial sector - the very sector that got us in trouble in the first place
putting mfg back to work would mean real jobs in the real economy with real benefits for main street
The economists of every political stripe are lining up to say we can't borrow and spend our way out of this one - we need to PRODUCE or way out
The 2009 Report can be downloaded free at aesopinstitute.org.
The 1977 job tax credit program, which adopted a few of the incentives recommended in an earlier Report, generated almost a million private-sector jobs; twenty percent of all new jobs created that year. It resulted in more jobs in less time than any prior legislation.
There are now two versions. The full 52 page document contains a new economic analysis. A shorter version contains the Summary and a total of 15 pages. The tax incentives in the Human Investment Tax Credit program have been updated and can be debated and voted into law.
Readers might want to urge your Representative as well as the House Ways and Means Committee to debate and discuss this jobs stimulus legislation without delay.
I've heard conservatives slam Obama on the basis that nothing he can do will create *sustained* job growth (i.e., all he can do is create "make work" jobs that will disappear when they are no longer funded by tax payers). However, Mr. Lux's item # 2 seems to deal with that issue very well.