It has been a very busy week in Washington and around the world. Events in Egypt have unfolded daily. At stake is not only regional political stability but, indeed, global economic stability. Who will lead the Egyptian government and for how long is paramount to determining the outcome of continued peace in the Middle East. Unfettered access to Egyptian oil pipelines fed from the producing regions of the Middle East and the flow of international commerce through the Suez Canal is critical to the slow but steady worldwide economic recovery. Oil price spikes will not aid in the recovery and will do much to disrupt daily life- especially in the West.
Still, the events in Egypt are secondary to the key issue facing the United States today: rebuilding the economy and restoring jobs. The recovery has been jobless so far. New entrants into the workforce require 120,000 new jobs every month just to keep pace with population growth. On top of that we need to reabsorb 6 to 8 million unemployed back into the fold. Depending upon what divisor you choose, that makes a full employment recovery, the type of recovery that we need to restore American economic preeminence, a very long way off. Our best month of recovery in recent history is 240,000 in May 2010. That optimistic prospect still places recovery in the 2016 timeframe. The Obama administration is talking more like 2018.
What is a country to do?
There are no silver bullets in the chamber, no magic arrows in the quiver. What has served this economy well over our history is capitalizing upon the robust nature of business itself. Our economy has been weighted down with regulations and taxes that promote agendas other than full employment. We are in crisis right now and should expect to be so for several more years. And when in crisis, we should review the rules of the game. Job growth in many companies, however meager, is often oriented towards expanding compliance with government regulation rather than innovation and growth. The effects of these regulations will be to make all US industry as responsive as a public utility. I can’t imagine the electric company or the water company driving innovation.
The President has called, via Executive Order, for a review of regulations to ensure that they are not stifling economic growth. The EPA said that they routinely conduct such a review and that everything is just fine. That will not advance the ball. The only way that remains for the government to drive increased revenue is through economic growth and increasing employment. And that revenue growth must go towards reducing our deficit. No other issue, short of national security, can diminish our focus on fixing the economy.
The ingredients of this recipe are in our cupboard.
• Make corporate income taxes competitive with the OECD countries with which we compete; this will preserve jobs and possibly result in repatriation of jobs to the US.
• Allow US companies to repatriate foreign earnings into the US at this new reduced rate with the express intent of direct investment in capital projects or technology R&D
• Declare a moratorium on new regulations on business, especially from the EPA and FDA, if they are counter to innovation and productivity
• And, finally, let’s commit to end our dependence upon foreign energy. Let’s tackle the energy deficit slice by slice: nuclear, domestic oil, clean coal, solar and wind. No one solution will solve the problem but, taken collectively, we can begin to insulate ourselves from the tyrants who hold us hostage and influence our behavior due to energy dependence.
As with any recipe, the cook makes a big difference in the outcome. We hired some new Representatives and Senators to take the reins in DC this past November. We sent them there to drive change. To innovate the way we govern ourselves. They must be bold enough to drive the change we deserve for our country and demand for our children.
This is where you come in. Never underestimate the power of the people to affect change. One need look no further than the streets of Cairo to realize that an oppressed and repressed people can change the world.
Now, that is an interesting reminder.
This is Tom Wesley. Press on.