How Can Washington Jumpstart Job Creation?
This is just silly. The Atlantic along with the management consulting company McKinsey have asked a bunch of people to come up with proposals to fix the long term unemployment problem. Specifically, the question they are asked to answer is "What is the single best thing Washington can do to jumpstart job creation?" Initially I thought this might be useful, and then I looked at who the participants were. They have writers and thinkers and politicians and academics and non-profit executives, none of whom have ever created a new private sector job in their life. They also have a couple of business executives that have actually created jobs.
So what are they suggesting. As expected, the public sector folks want more money spent on their stuff. A couple of writers want to inflate our way out of the problem. Others want to spend more on education or make it easier for highly skilled immigrants to come to and stay in the US. All of this may or may not be wonderful, but none of it will fix the problem anytime soon.
One of the business leaders hints at what the real problem is.
Companies like Siemens are now trying to gauge how lasting the U.S. government's commitment to the R&E credit will be. Since the credit was introduced in 1981, it has always come with an expiration date, requiring Congress to renew it 14 separate times. Washington has failed to renew the R&E credit on eight separate occasions. In 2010, Congress had to pass a retroactive extension after it failed to renew the credit on time.
Think about that for a minute. Over the last 30 years Washington has had to renew a policy, which only works in the long run, about every two years. Talk about uncertainty.
Uncertainty stifles investment, and for the last three years Washington has done nothing but add to business uncertainty. Remove the uncertainty and investment and jobs will come streaming back into the economy.
They didn't ask me, but my answer is fairly simple. Remove the uncertainty and provide stability. Make the Bush tax cuts permanent so that we have a stable tax regime. Repeal Obamacare and stop the thousands of regulations that have yet to be written dead in their tracks. Again, this provides stability. Repeal Dodd-Frank and stop the thousands of regulations that have yet to be written dead in their tracks. Again, this provides stability. Rein in the EPA and the other regulatory agencies. This may involve repealing many of their newer regulations. Again, this provides stability.