In today's economy, what's the best strategy for creating jobs?
Posted at 5:00 AM on September 6, 2011
by Eric Ringham
(41 Comments)
Filed under: Economy, Politics/Government
President Obama will address a joint session of Congress and the nation Thursday night to explain his plan to promote job growth and improve the economy. Today's Question: In today's economy, what's the best strategy for creating jobs?
Comments (41)
Business "created everything you use in your life."
Oh, sorry "Jefferson." I guess I misunderstood. It sounded in your earlier post like you were advocating that government kowtow to what "business" wants-- i.e., treat it like it's a monarch. I didn't realize you were regarding business as a god.
Business did not in fact create everything I use in my life. The air, for instance. The sunshine and the rain. The shade trees in my yard. My hands and feet. Business, in fact, creates nothing. Indeed, business does nothing. People engaged in business do things. Further, people in business create nothing; they only move and rearange things that already exist, usually in useful ways, but often in ways that are merely exploitive.
You speak of what business "wants." That makes a rather bizarre ontological assumption about business. "Business" is merely an umbrella term for a set of human activities. Business is a thing, an abstraction, a concept, not a person or an entity. Business is a what, not a who.
Did business really exist before government? I don't know. But notice this: of all the freedoms guaranteed in our Constitution (speech, press, religion, security of one's person, etc.) you will search in vain for freedom of commerce. Why is that? Because from the earliest days of this republic, the founders realized that business cannot be allowd to run roughshod over the people. It's like fire: useful, even necessary, but dangerous if out of control.
Steve the Cynic - ["Jefferson," agree with you about simplifying the tax code. I'd like to see H&R Block put out of business. What I disagree with is the rationale-- that what's good for "business" should be the primary criterion for public policy. "We the People" are supposed to be sovereign in a republic, but your rhetoric appears to make "business" the king. (And don't repeat the canard that corporations are people.) Business is a means to an end, not an end in itself. ] *** Why not just simplify the tax code, both sides basically agree that needs to get done, we could sit and fight over the reasons why but in the end it is something that needs to get done. As far as business being king, I'm not sure I understand your point. This discussion is about creating jobs and last time I checked the private sector not only creates the vast majority of the jobs in this country but it also completely funds the public sector (which includes public sector jobs). Business is the engine that drives all job creation, without it you have no jobs. Business has been around before government was created and government needs business to function (not the other way around). I'm simply asking for a more business friendly environment, you can attack business as evil but in the end it created everything you use in your life...business only asks that you voluntarily purchase a product/service you actually want while government demands a certain percentage of your income/purchases/property against your will; you can decide which method is more ethical. Businesses are like people in the sense that they are run by people and end up reflecting the image of those people who are in charge of them; businesses should have the same free speech rights as people, afterall they have their own interests to protect just like the average person.
When the cowboy is bigger than the horse, it is not good for the horse or the cowboy. We simply have more government than we can afford. Set men free and watch them soar! (Abe Lincoln)
Government needs to get in touch with the front line job creators--business owners and corporations. A good start would be to stop demonizing the private sector and get out of its way. Where would our economy be today without corporate payrolls and dividends?
revamp the taxation and financial systems for individual humans and individual companies/coprorations to move more wealth to more people. the "too-big-to-fail" model of upward wealth migration puts too much of the nations assets into to few hands. In the days of Carnegie and Pierpont Morgan that model was an efficient way for creating companies. Today - its how you limit your options. Tens of Millions of millionaires are a more effective incubator for new solutions then 10 billionaires. The Tnes of millions of millionaires model allows for more flexibility in terms of area of business, company plan and structure, timing, geography, technology. Wealth isn't bad - wealth in the hands of the very few - is just plain economically stupid. Its like using a naval carrier group to take a 100 yard long beach on Lake Minnetonka. Getting the carrier group to the lake is just the first problem.
"Jefferson," agree with you about simplifying the tax code. I'd like to see H&R Block put out of business. What I disagree with is the rationale-- that what's good for "business" should be the primary criterion for public policy. "We the People" are supposed to be sovereign in a republic, but your rhetoric appears to make "business" the king. (And don't repeat the canard that corporations are people.) Business is a means to an end, not an end in itself.
The best thing the government can do to create jobs is to establish a stable, consistent, and simple business environment. First of all, the government needs to stop enacting new regulations on businesses, that means new regulations (like Obamacare) need to be stopped before they can further drag down the economy; Obama preventing the EPA from enacting new carbon taxes is a good start. Second, the government needs to ensure its own financial security by cutting spending and reforming social programs. Businesses don't want to be used as a scapegoat years from now and have their taxes increased because the government was irresponsible and promised more than they could pay for. The best thing that can be done is to simplify the tax code, lower all the rates and eliminate most or all of the deductions for individuals and businesses. Also, there is no reason to give one industry an advantage over another so tax credits in general should just be eliminated. All people and industries should be treated the same and be given a level playing field (no advantages from government). Making the tax system more simple will save billions on accounting services that is currently just wasted since those accounting services don't actually produce anything and end up being a drain on the whole economy. Finally, a small infrastructure bill (around $100 billion) would be useful to help upgrade some key systems that make businesses more efficient; that means we should upgrade the electric grid, install more GPS landing systems at major US airports and update roads/bridges that need it most.
No, "Jefferson," I sincerely believe that he was assuming the best about the opposition-- i.e., that they would be as reasonable as he is and respond positively to his overtures to move toward the middle and do likewise, not take the country hostage until they got everything they want. Obviously, he was mistaken about that.
I'm not exactly "cheerleading" for Obama. (I caucussed for Hillary Clinton and still think she would have been better.) It would be more accurate to say I'm heckling the hot-headed opposition, especially those who are more interested in defeating him than doing what's best for the country.
Steve the Cynic - ["Hey folks, why did the Obama Regime last Friday stop all the new EPA regulations that were to go into affect?"
He's trying to appease the bullies again. I expect it to work as well as his other attempts (such as taking single-payer off the table).] *** So you honestly believe that the President of the US is so weak willed that he would, from your perspective, purposely hurt the economy to appease people he doesn't agree with? You have very little confidence in someone you have been cheerleading for during the last 2 elections. My guess is that Obama finally started to listen to one of those economists who had been telling him to get rid of unnecessary regulation for the last 3 years; brand new EPA regulations on carbon are the last thing we need in this economic malaise.
It really doesn't matter what President Obama tells Congress on Thursday. It should be clear by now that they plan to say no to whatever it is he wants to do. The Republicans would rather have our country enter into another recession. God forbid jobs start coming back in time for the 2012 election!! Politics as usual.
Infrastructure, infrastructure, infrastructure!!
We need a plan as gigantic as the Hoover Dam to start, though increased employment, creating demand again. I think our country has proven enough already that supply side economics doesn't work (what's the point of making something that there's no demand for?!) and since the private sector is content to just sit on their record profits rather than hire people, it's time for the government to step in. Maybe we could start with a project to move water to the areas most affected by the wild fires down south? The Great Mississippi Pipeline? Sounds like a good idea to me!
It would cost little money to use unemployment funds already in use to pay people to intern for companies. Also, I would support anything that contributed to infrastructure construction such as a smart grid, increased public transport, and general road and bridge building.
"Hey folks, why did the Obama Regime last Friday stop all the new EPA regulations that were to go into affect?"
He's trying to appease the bullies again. I expect it to work as well as his other attempts (such as taking single-payer off the table).
Take what ever the uber-right is calling for and do the exact opposite. I seem to remember a mildly retarded boy from texas cutting taxes without paying for them and causing this mess we're now in. Sad the only long term job bush created was that of solder in iraq.
I can attest that investing in the national infrastructure has be very good for my economy. I work in commercial construction and have been crazy busy building schools, water treatment plants, and other public places. That and casinos. Everyone it seems can agree to raise taxes on the stupid.
//Hey folks, why did the Obama Regime last Friday stop all the new EPA regulations that were to go into affect?
ummm, to get to the other side?
(sorry that is all I could come up with)
Peter,
are you blaming my mom or your mom?
I guess when your argument is weak that's the only thing you can come up with.
Hey folks, why did the Obama Regime last Friday stop all the new EPA regulations that were to go into affect?
Despite the continuous news of an abstracted 'bad economy', corporate profits are at an all time high and many large companies are sitting on a huge pile of cash. They are choosing to use that cash for acquisitions, outsourcing and extraordinarily high executive salaries rather than creating jobs doing real work that needs to be done.
The notion that somehow giving these corporations even more cash through tax breaks and easing regulations will increase 'confidence' is absurd.
What's required, though it will require a fight, is tighter regulation of the financial industry and massive public spending to put people to work improving our infrastructure, our education systems, and our environment.
Given the 'investment strike' of companies refusing to invest in jobs, I'd like to see the public sector take on that work directly.
I don't know anything about economics, but it seems like everything that has happened with the economy has been a reaction to something else. So why not take a more proactive stance on everything from mortgage lending to the price we pay for gas to the price of a toothbrush. If the market stabilized and became less reactive, then maybe companies would be able to hire more full time staff with the assurance that their product/service was not going to plummet in demand, production, etc. I don't live in a land of sunshine and moonbeams, so am fully aware that my solution here is far more complicated in reality than simply making a change in perspective. My mom always told me when I was a kid not to make mountains out of mole hills; just seems like we are making thousands of mountains in this country that we can't even come close to climbing.
1) Free trade or no trade. High tariffs on all imported goods and services from countries that impose tariffs or have other non-tariff barriers for US goods and services.
2) Improved education. A minimum of 40 weeks a year in the classroom for everyone. And move from NCLB (No Child Left Behind) to CTB (Cultivate the Best.)
3) Low or no taxes on business profits when the profits are retained inside the companies to invest in future growth. Once the profits leave the companies (as salaries, dividends, etc.) enough taxes to pay our bills.
By encouraging workers that obtain high demand skills, these workers compete with a much smaller pool of global labor.
According to the UN, there are approximately 200 million unemployed people in the world; most of them willing to work for very little money. New jobs will flow to that low cost supply of labor first.
Procataleptically I understand these global workers do not always have the rights they should. But to assert that a low skilled worker in the US should have a job such that they can afford a car and spacious living quarters, when there is an equivalent third-world worker willing to do that job for food and a roof over their head, it seems unjust not to give that new job to the person willing to do it for less.
The jobs situation specifically, and the return to healthy growth in general, will take a longer than normal time. This recession is not like earlier ones. Our households and our financial institutions were overextended with debt. We are unwinding such excessive leverage. Households borrowed (direct loans, mortgage refinancing, consumer loans on cars, boats, RVs, etc) to live an unrealistic lifestyle. Household savings suffered. Correcting that will mean consumption as a % of GNP will return to more normal 60% versus about 70% by the mid-2000s. Savings rates must increase and recent data suggest this is beginning to happen; a healthy economy grows on savings NOT on spending.
The excess leverage by financial institutions (banks, the federal mortgage behemoths - Fannie, Freddie, etc) is better known by the general public. The unwinding there is likely farther advanced due to public assumption of debts and other unwise reactions by our governmental leaders.
Unwinding over-consumption and correcting under-saving are the factors which will lead to a very slow return to a growth cycle.
Invest in education and innovation, then they will come. Some new industry will rise that we (or the Chinese/South Korean/India/Japan/Germany) hasn't thought of yet. Energy perhaps.
Hey GaryF,
Personally, I blame you mom.
Make more human activities, in particular, consensual, non-violent activities, into crimes. That way, people can get jobs building prisons and guarding prisoners.
Do people realize how powerful the prison guard lobby is!?
"So, we are going to double down on a bad hand?"
GaryF, that's exactly what the Gang Of Plutocrats have been trying to do. It was the rampant deregulation of greed and unsustainable tax cuts for the wealthy (together with two unfunded wars started by a pair of chicken-hawk oilmen) under previous administrations that led to the crash of '08, and folks like you are crying for more of it.
WE ALREADY SPENT A GAZILLION DOLLARS ON THE FIRST STIMULUS!
So, we are going to double down on a bad hand?
Oh, and did you notice..........
It's not Obama's fault again. Never is. He's already got a scapegoat for this not working. He's always got someone else to blame.
Don't blame Obama when he has no business experience and so its no wonder he appoints a cabinet with less than 9% having business experience. All other presidents appointed over 42% with business experience.
Check the items at JC Penny, Walmart and Target_90% are Made in China. Obama has added more regulations on business than any other and it costs the business community $9 billion a year. No wonder we lost all our fabric companies and small item manufacturing... federal regulations kills jobs. In Spain, they forced Green jobs and that killed 3 jobs for every one created.
At Thompson-Reuters we have 6 tax specialists with MBA's just to deal with the myriad of taxes and regulations, spending almost $1 million just to comply.
The President is the leader but his policies kill jobs and the facts show this. He back slid on the EPA's new regulations once the numbers came out showing the new regs would cost 4 billion which would kill more jobs.
Obama's lack of experience and his socialist agenda seeks only to spread the wealth, to build bigger unions for more votes. Who got the greatest benefit of the last stimulus bill? Yup_ the Unions got it for pensions and union leaders multi million salary and perks. HOW is that Hope and Change working now?
Maybe Obama needs to seek council at his church of 20 years attendance and ask Reverand Wright how he can use their Black Liberation Theology-Marxist principles to further ruin the country as he has done already.
Federal funding of public works to improve and rehab infrastructure while putting people to work.
Enticing businesses to hire with federal monies doesn't make sense when there isn't a demand for their products.
We don't need to find "the best strategy." What we need is a good enough strategy that Congress can agree on. The ideological purism that insists on holding out for "the best," in opposition to the other side's conception of "the best," is what's preventing compromise, and it's the failure to compromise that's keeping us from actually solving problems.
When you purchase any goods, always try to "buy American". When companies find out that Americans demand products made in America, they will start to manufacture more here - hence more jobs!!! As consumers, demand that companies list where all the parts of a product come from and where they are made. Also, higher taxes on the profits of companies who sell in America but manufacture outside our borders.
Finally, if there isn't already a web site that lists the products made in America, and the companies who produce them - maybe one of you computer smart people out there will create this site.
A huge investment in infrastructure, not only repairing the crumbling system that the greatest generation built that spoiled rotten boomers don't want to pay for, but adding new technologies to make our infrastructure competitive into the future for our children. This is not only, roads and rail, this is the electrical grid and high speed internet access into rural areas.
The other barrier to intelligent reform is zealots on the left who would take us way too far. (Nationalize corporations, Reggie? I don't think so.)
GaryF, you have your facts wrong. The current "misery" was brought on by inadequate regulation of free-market greed, especially in the financial services "industrly" (so-called, though it produces nothing on its own). The misery will last as long as those with an idolatrous faith in the Invisible Hand keep dragging their feet on intelligent reform.
Nationalize the corporations that are hoarding vast piles of cash, avoiding taxes and shipping jobs to our competitors. We could use the cash to reduce our national debt or use it to create jobs.
Hire people, duh!
It's not like there's no work to be done. Roads and bridges are deteriorating and need upkeep. (Try moving those jobs to India!) Kids need to be educated. Regulations need enforcing. The 2009-10 stimulus didn't work, because (1) it wasn't big enough, and (2) states in the aggregate had to cut spending by just as much. Obama can't be blamed for the state of the economy when folks who want him to fail more than they want the nation to prosper keep sabotaging him.
Consumer demand is not coming back any time soon. People have adapted to having less and are realizing that merely having more won't make them happy. And the experience of losing so much wealth will make them more cautious in the future.
Cutting government will create Jobs? Have a look at those places with no effective governemnt, such as Somalia. Greece, Clark? I think Canada is a better example. The Canadian banking system was well-regulated, which is why it didn't fail. With Canadian universal health care, businesses don't have to deal with that headache when making hiring decisions.
It's the superstitious belief in the kindness of the magical "invisible hand" of the free market that's impeding intelligent conversations about what makes for true prosperity.
Investment in infrastructure, be it fixing and updating existing, to building new such as bullet trains.
You build infrastructure and jobs follow. Interest on money is now low, and unemployment high, there will never be a better time.
We've put our entire economic system on the theory of the cart before the horse (debt financing) and counting on the horse catching up down the road. Correcting this to financing more via savings and sustainable spending will be long and difficult; constant attempts to recreate the pre-'08 financial system is a waste of money.
Obama might be seeing the light. Last Friday he announced he wasn't going to implement all the new EPA regulations he was going to force on American business.
Things won't start getting better until Obama is out of office. So, we have 1.5 years or 5.5 years left in misery.
Can there be any doubt? Tax breaks and less regulation. That will increase consumer demand haha..
Since we are not creating the new industries essential for real job growth, I believe the unemployment rate will stay stubbornly high at around 9% for years, much like Germany saw for decades. The jobs that decamped for China or were vaporized by the Internet are never coming back.
With tens of millions of individuals wiped out, and most of the rest recovering from a halving of their net worth, don’t hold your breath for a consumer spending boom. Frugality is here to stay. Business's have also probably figured out that starving, bankrupt consumers don't buy much.
Where will the demand be coming from for these new business's that lower taxes will create?
Lower the tax rates, particularly on small bussiness', and at least pretend that you don't have utter contempt for bussiness.
Don't vote for our current clueless community organizer president.
He dislikes private business. Every week my company is contacted by obama's regulatory thugs, who demand we mitigate all risk to consumers. Our response is to shut down divisions where we can't make profit. In 2011, 6000 employees have lost their jobs as we have closed operations around the U.S.
Where were the democrats on jobs in 2009 and 2010? They wasted 1 trillion on worthless stimulus while they added another expensive entitlement with obamacare.
Keep voting for far left radical democrats then travel to Greece to see our future.
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