rss feedComing soon: The Dec. 3 jobs summit
Whenever the President of the United States talks about holding a jobs summit – especially as economists are saying the recession appears to be over – your ears perk up.
Economists have noted that hiring comes after the end of a recession. I think most economists have been cautious about giving a time peg as to when this hiring will occur.
You pay even more attention when President Obama tells a television news correspondent that there might be “some tax provisions that can encourage businesses to hire sooner,” as he noted in a Fox News interview.
So, are those words that might just blow in the wind?
Or will a dramatic moment, given the context of a White House meeting, occur when Obama talks with business and government leaders, economists and others about how to help the unemployed get back to work?
It is a tricky situation, especially if you’re the president.
On one hand, the pressure is intense for some type of Executive Office leadership or action. One answer: A high-profile meeting.
But if this meeting only yields theoretical talk and employment and economic statistics from the past, then it’s likely many people will ask: Is that all?
Couldn’t we have found out this information on Google or bing?
Certainly, one way to create jobs is to issue a federal mandate. But that’s not a likely idea, especially since the president and his staff haven’t seen all the numbers for businesses in the country.
It also is fraught with political risk and most likely cannot be supported over the long run.
As we know, businesses in the United States often complain when federal government mandates are handed down from people in dark suits.
Interestingly enough, when some businesses pursue the top-down decision making process – say, with cell phone pricing plans – the implicit message consumers are given is: Take it or leave it.
So, that’s why I paused when I heard the president talk about tax incentives.
Obama was certainly smart enough to give a full, nuanced answer in that Fox interview:
There may be some tax provisions that can encourage businesses to hire sooner rather than sitting on the sidelines; so, we’re taking a look at those. I think it is important though to recognize that if we keep on adding to the debt, even in the midst of this recovery, that at some point, people could lose confidence in the US economy in a way that could actually lead to a double-dip recession.
But if the federal government - meaning both the White House and Congress – eventually go down this path, I can understand why.
Properly-structured tax incentives are politically easier to digest.
The question is: If tax incentives are used, to what extent?
Some examples of how they have been used:
Instead of ordering everyone in the United States to buy a hybrid car, why not offer a tax deduction for those who decide to do so?
To help the housing market, why not give a tax incentive to people who are thinking about opening their savings, which is at the end of four straight quarters of economic contraction, and making a hefty investment of buying a home?
Why not just pursue a tax incentive for jobs and other policy goals?
Well, the opportunity cost – meaning that to get something, you give up something – is pretty clear: You have less money for a federal government program.
I realize supporting some federal government programs is controversial.
But when this Dec. 3 jobs summit starts, I think the issue to watch is which economist, business leader, elected official or regular person will come up with the most interesting way to create jobs in the near term without hurting other programs.
It also will be interesting to see the list of participants.
Will the economists and business leaders be ones who like to think in new ways? Or will they circle back to tradition and history for answers?
Political leaders and trade officials in Washington state most likely perked up when Obama talked to Fox about creating jobs by boosting exports to Asia.
The U.S. dollar is weak, which makes it difficult for people who hold them. But it makes products manufactured or grown in the United States cheaper in international markets.
As we know, Washington state relies heavily on trade. Here’s the president’s quote from that Fox interview:
There may be some ways that we can accelerate it without spending money. For example, one of the keys to this Asia trip is to start promoting the notion of balanced growth where the US is an exporter again. This is a region where right now we’re sending about 25-26 percent of our exports. If we just boosted our share of exports by one percent, that might be 250,000 well paying jobs in the United States. So export promotion would be an example of something we could do without spending money.
It might be a little geeky to watch and read about this summit.
But you know: Geek chic never goes out of style.
It’s also a good time to pay attention to such topics.
The president also uttered some other words that I hope doesn’t occur – double-dip recession.
And I heard those words during a general discussion at a recent state of Washington economic meeting.
