Last Thursday the President delivered his much-anticipated jobs speech before a joint session of Congress. The content of the President’s speech was completely out of synch with the urgency of the moment. It was full of small proposals, political hedging, and deceptive assertions. And in order to avoid being branded as naysayers, Republicans had to bite their tongues and talk about “common ground” and “first steps” and “working together”.
The economy is awful, and yet the President is keeping in his quiver most of the arrows that could get us growing again. Unemployment is lingering at over 9%. US and world markets are plunging. The President’s “bold” solution? It comes down to a few key proposals which fail to leverage our greatest strength- our free market system- and which rely on a central command in government. They include: 1. Transportation and school infrastructure (didn’t we try this once?), 2. Aid to hire or retain teachers and/or police officers, 3. Cut payroll taxes, and 4. Credits for hiring long-term unemployed.
That’s it? Approximately $450 billion pumped back into the economy in the form of essentially these 4 proposals? How weak!
One could argue that all government spending and tax reductions are a stimulus, but the options the President chose are such minor players in our economy. The infrastructure proposals are old news, and as we know from the first stimulus they failed miserably. Hiring/retaining more teachers and police officers has almost nothing to do with stimulus, the payroll taxes are a good move but are only a temporary jolt, and funding the long-term unemployed is a social program, not a stimulus!
If this President was a leader, he would have included some or all of the following high-impact measures:
1. An “investment tax credit” for capital expenditures, allowing businesses to receive a dollar-for-dollar (or .50 per dollar) tax credit for all capital expenditures. Demand would soar! Why not? Opposed by the anti-business left.
2. Call for immediate approval of three free-trade agreements: South Korea, Columbia, and Panama. Why not? Opposed by unions that donate $100’s of millions to Democrats.
3. Make the Bush tax rates permanent to create certainty for businesses, individuals, and providers of capital. Why not? Obama knows this would be good, but that it would offend his entire constituency.
4. Push for fast-path drilling permits in ANWR, the Gulf of Mexico, and the East Coast of the United States, creating perhaps 1.5 million jobs. Why not? Catering to the fantasy that we won’t use the oil if we simply don’t produce it ourselves, and the environmental hypocrisy that’s it better for the environment for us to get our oil from regulation-less Nigeria instead of Alaska.
5. Regulatory reform removing useless or politically-motivated regulations which stymy the economy. One good move was suspending the EPA’s radical ground level ozone regulations, but there are hundreds more that are delaying or preventing the opening of restaurants, factories (see Boeing and South Carolina), nuclear power plants, banks, and more. Why Not? An overprotective culture and an anti-business culture on the left.
6. Deep six the Davis-Bacon Act which requires Federal and local government contractors to use union labor. This move alone would add 25-50% more jobs for the same money spent, but instead favor unions and cause the creation of fewer jobs, feeds corruption, slows projects down dramatically, and wastes taxpayers dollars. Why? You did see I mentioned the word “union$”, didn’t you? Enough said.
7. Allow American corporations to repatriate profits generated overseas tax free. This would feed significant investment in the U.S. that is being invested elsewhere and create millions of jobs. Why Not? The government can’t resist getting its hands on foreign-generated profits, settling for less (because less is repatriated) rather than none.
There are so many more things the President could have called for as well, but he is not willing to withstand the controversy or risk his re-election to do so.
Our economic prospects are at least as bad, or worse, than when the President entered the Great Hall last Thursday.