There’s a lot of talk about how to create jobs. Much of it is nonsense, and that’s true for both sides of the political spectrum. The discussion (if one could call it that) has degenerated into different visions of blurry reality. As with most divisions, there is some truth on both sides…but mostly a lot of catering to special interest groups.
So I thought I’d add a personal insight into how to create more jobs in America. This is part ranting, part common sense, and part personal agenda. Most likely it will contain things neither political party likes.
Here are my suggestions:
Section One: Change our thinking
– Recognize that the world is different than in the past. It’s a global marketplace that is deeply interconnected. Interconnection means you can’t survive with just winners and losers; you have to collaborate with other countries. That’s not a strong suit of ours in America because we have for so long dominated economics. We are going to be more vulnerable than we have been in the past, so we must find ways to bring stability. Our policies need to reflect that.
– Stop calling some of the really big companies “American” companies. Most are not. They are global companies, and their allegiance is not to America. That’s another huge change; when we faced hard times in the past, the captains of industry believed they had an obligation to their country and acted accordingly. That obligation no longer holds. For instance, stop this nonsense about American companies holding trillions in cash and calling them to invest it in order to stimulate hiring. They are holding that cash because of the uncertain times, and because there is no demand for their products and services. But even when they do spend it, they are likely to find better returns outside of America. We need economic policies that recognize this shift.
Section Two: A personal agenda, or said another way, what would help me and others
– Get the banks off the issue of “non-conforming” loans. A “non-conforming” loan is one where the monthly payments are being met but some other condition of the loan is not in conformance. These are unusual economic times; give the borrower some slack on such issues. Some banks understand this; many do not. There are a lot of foreclosures and bankruptcies happening because banks are stupidly inflexible.
– Streamline the lending process. I know the regulators were lax in the boom times, and I know changes needed to happen, but the pendulum has swung too far the other way. Banks are now scared to lend to anything but an absolute sure thing. And until I’m sure that I can finance my business, I don’t have the confidence to hire more workers.
– Streamline the local permitting process for businesses to operate. Local government agencies are slow and often create issues that don’t really exist. It shouldn’t take months or even years to open or expand a business. One restaurant operator I know told me it’s easier to open a franchises in China than California. That’s gotta change.
– Streamline the public input process for new property development. Public input is important and I welcome it. But it needs to be done intelligently. I once saw a city planning committee stop the redevelopment of a gas station because a neighbor insisted the soil was contaminated. There was no evidence of this at all. But that one inaccurate complaint stopped the development for nearly a year. And this sort of thing happens constantly.
Section Three: Government agenda
– Fix the health care system. There are two problems with health care: it’s not accessible to enough people, and it’s too expensive. The Obama plan aims to fix the former but they didn’t adequately address the later. So insurance costs keep going up by double digit rates. Until there is some assurance that health care costs are not going to skyrocket, there’s a massive disincentive to hire.
– Stimulate the economy with an eye for the future. Easiest way to do that? There are one million unemployed construction workers; put them to work on roads, bridges, airports, research centers, schools, etc. It’s one of the few things government can spend money on that leaves a legacy of usefulness for decades.
– Redo the tax code to create clarity. Clarity brings stability, which produces confidence in the future, which provides an environment for hiring.
– Don’t be silly about government incentives to hire. I’ve yet to meet a business owner who said, “Well, I wasn’t going to hire anybody, but since the government offered me a $10k tax credit, I figured I should go for it.” Not gonna happen. It might trigger a bit of hiring, but not much.
– Get the deficit under control. Obviously cuts need to happen, and that means the untouchable items like social security, medicare, defense spending, etc. But cuts alone won’t be enough. We need to raise taxes, and the way to do that is to equate paying taxes with patriotism. Present it to the American people as the right thing to do for our kids and grandkids. Then tie the spending of those extra taxes directly to paying off the national debt. I’d pay an extra percent or two on my taxes if the Government promised to use that money to retire existing debt. Simple, straightforward, and direct. If we had a reasonable budget situation in Washington DC, we’d see stability brought back to the markets. And that means jobs.
– Stop relying on the consumer to bail us out. We’ve become a consumer culture, and that’s not healthy. We need to be making things, not buying things. Our economic policy and Wall Street expectations have been built around consumers, which is unhealthy in the long term, and useless in the near term. By the way, I’m glad to see statistics that show the consumer is actually lowering their indebtedness. That hurts demand in the present…but is the best long term thing we can do.
So, those are my thoughts. What are yours?