Earlier this morning, Charlotte Hays, cracked the State of the Union code for us, explaining that when President Obama talks about “competitiveness” and “winning the future” tonight, he will refer to job creation without “demonstrat[ing] a willingness to pivot to policies that produce them.”
“Does the White House Know How To Make a Job?,” asks Derek Thompson in the Atlantic. Thompson is correct in his assessment that “the government cannot physically create a non-government job.” Government can, however, adopt policies that affect individual decision-making by consumers, employees and employers, which have an impact on job growth.
Furthermore, Thompson’s assessment of the relevant policy questions is incomplete, and it doesn’t take many of the current and proposed policies into account that will further stifle job creation. But, first, here are the issues Thompson addresses:
Education: The structure of the 21st century economy requires an increasingly educated workforce to keep pace with the information-age.
Healthcare: Spending is out-of-control without comparative gains in healthcare quality.
Taxes: “We have one of the highest corporate tax rates in the developed world, which encourages multinational companies to set up subsidiaries abroad to escape U.S. taxes. Lower taxes on corporate income would encourage more businesses to keep factories, offices and jobs in the U.S.”
Spending: How will the President align his desire to increase spending on infrastructure and education with the need for overall budget cuts?
While these are all valid points, Thompson fails to mention some very important policies on which the President has already taken a favorable position, despite these policies posing risks to existing, well-paying jobs and stifling further job creation. These include:
Net Neutrality Regulations: President Obama is in support of the network management rules recently passed by the Federal Communications Commission. Recent economic models show that for every one percentage point increase in broadband penetration, employment expands by almost 300,000 jobs. By removing profit opportunities for investment in broadband infrastructure for Internet providers, net neutrality rules stifle job growth.
EPA Greenhouse Gas Regulations: In his recent Op-ed in the Wall Street Journal, President Obama spoke out in favor of Clean Air Act regulations, asserting that their economic benefits outweigh their costs. How do you account for the economic benefits versus costs of hampering U.S. competitiveness by imposing cost-raising regulations on energy-conversion and manufacturing, which could destroy 800,000 well-paying American jobs, and threaten to move U.S. operations overseas? Wait, did the EPA even complete its mandatory analysis of how many jobs might be lost in the process of regulating green-house gas emissions? – Ummm, no. Never mind that the science on the effects of CO2 emissions on the environment is far from settled.
Offshore Drilling: Just this December, President Obama declared the eastern Gulf of Mexico and areas off the Atlantic and Pacific coasts taboo for offshore oil extraction. Fittingly, the President’s National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling called for more stringent regulations of the industry this month before further extraction may take place. Meanwhile, the post-oil spill moratorium and existing regulations are crippling economies in the Gulf of Mexico as oil workers and oil rigs sit idly.
Don’t expect President Obama to address these policy issues tonight. Instead, expect to hear a litany of self-congratulations for effectively preventing a depression by stabilizing the economy with stimulus funds (uh, more like hampering recovery, maybe), how clean energy investments have the potential to spur the economy (more “green” jobs boondoggle), and references to how wise regulations are important to protect our health and safety and to safeguard people and businesses from abuse, while government needs to become more effective and efficient (yeah, like the promise of how cutting waste and fraud will reduce our healthcare costs…uhum).
In short, expect plenty of rhetoric about job creation while job killing policies continue to move forward.