Skoda makes it look easy

Why Washington Doesn’t Create Jobs

by Mark Skoda

A  recent Financial Times article questions whether America can regain a  dynamic labor market.  After reviewing the current and arguably difficult  trends, it concludes with a quotation by former Obama administration budget  director Peter Orszag.

“The  truth is that we don’t know how to fix the US labour market — we are in  uncharted territory,” says Peter Orszag, now a vice-chairman of Citi. “It would  help to spend more on retraining and on infrastructure and to have a more  rational immigration system. But these wouldn’t fundamentally transform the  situation for the middle class … It is not yet clear what, if anything,  could.”

The  thesis of the article, and evident in Orszag’s quotation, is that America has  lost the dynamic job-creation capabilities it has enjoyed over the last fifty  years.  More troubling is that the country is losing the middle class to  low paying-jobs or no jobs at all.

So  how do we begin to look at this broader issue from a political point of view and  begin to counter the trends that Orszag apparently has no idea how to  handle?  Obama’s class warfare strategy demonstrates his lack of innovation  in approaching the problem.  And of course, the gridlock that exists in  Washington amplifies the problem while bringing no real solutions.  In  approaching this problem and the assumptions stated by Orszag, I’d like to offer  the following thoughts.

First,  many would suggest that this train of thinking does not consider the Black Swan Theory of undirected and unpredicted events.  Indeed,  many innovations and changes that have taken place in the business cycle and  globally could be categorized as Black Swan events.  But the problem in  this theory is that we have to wait for those unique outliers of innovation to  present themselves in creating the opportunities for change and growth that  might fuel the next growth cycle.  However, given the challenges before the  U.S. economy and the global economy, these surprises are too infrequent to rely  upon and, in any case, do not address the current needs of the  unemployed.

How  we can create jobs

First,  roll back regulations and restrictions on coal, oil, and gas exploration and  mining and allow fast-track opening of tar sands, shale oil, gulf drilling,  ANWR, and the arctic.  The industry provides directly or indirectly over 10  million jobs.  Forget the nonsense about global warming.  We have over  14 million people unemployed.  The fast-tracking of exploration and  development of these resources not only creates high-paying jobs and ancillary opportunities, but begins to really  address our dependency on imported energy.

Second,  fast-track approval of refinery development and power-generation, including  coal, gas, and oil, which will create construction jobs and technical jobs, as  well as support hiring, while also making sure that the United States has  sufficient energy for the 21st century and beyond.  We must  dispose of the notion that we need to worry about global warming now while  people suffer.  There is no excuse for allowing these restrictions to  continue.  These jobs don’t move to India or China!

Third,  reverse Sarbanes-Oxley (the last financial legislative act that was supposed to  make sure a meltdown didn’t happen again), terminate Dodd-Frank and kill  ObamaCare — although with the 11th Circuit Court of Appeals ruling,  we may only have to indicate DNR on the chart!  Also, rein in the EPA,  OSHA, and the NLRB, which have become regulatory nightmares for any and all  businesses in the U.S.  The National Federation of Independent Business  (NFIB) estimates the average cost of compliance and government regulation is  approximately $10,000 per employee!  Why would you want to deal with these  regulatory bodies when it’s much easier to go elsewhere with fewer restrictions,  even in Communist China?

These  actions could easily reduce the estimated $1.75 trillion in regulatory costs to  the economy while making it easier to create new business, deploy that capital  in productive investment, and renew the United States’ position as a country in  which it is easy to do business.  Finally, this effort would actually save  the government money by reducing the bureaucracy necessary to maintain the  enforcement of this regulatory regime.

How  we address our deficit and debt

First,  require all non-military federal employees, including the legislative and  executive branches, to pay at least fifty percent of their health and welfare in  matching contributions for those benefits.  Not only will this approach  have a profound impact on costs to the federal government and therefore  taxpayers, but it will deal with the impending shortfalls in funding these  public-sector plans in the future.

Second,  move the country to the Fair Tax.  With nearly seventy legislators  co-sponsoring this bill, we need to aggressively make the change to allow for a  reasoned and reasonable approach to taxation.  Not only will this save  billions in preparation and compliance, but it will deal with the operational  needs of government and incent business behavior, while also allowing people to  control their taxes through their purchasing habits and big-ticket buys.   Most of all, eliminating the complex tax system under which we now labor would  also help downsize the extensive lobbying efforts to modify and obtain various  benefits for businesses or other constituent organizations.

Third,  pass the Cut, Cap & Balance Act.  Reduce the size of government and  move toward a cap on spending as a percent of GDP.  No matter the tax rates  or scheme, the U.S. government has historically received approximately 18% of  the GDP in income taxes.  But without a cap, the Congress and the president  of both parties simply won’t resist the desire to grow government while  increasing their spending.

Fourth,  rationalize the federal government.  The Department of Energy, Department  of Education, Commerce Department, Health & Human Services, and Agriculture  Department, along with the EPA, OSHA, and the NLRB, represent a  19th-century model, not a 21st-century  administration.

Why  is it that these agencies and departments continue to grow?  Why do they  have overlapping authorities and objectives as detailed in the government’s own  budget summaries?  And how in a modern economy should they behave to  reflect global competition and a global workplace?  Eliminating the  Department of Education and pushing dollars back to the local school systems is  perfectly logical.  The federalization of our educational system simply  doesn’t add value. The federalization of our education system does not allow for  innovation or adaptation to local demographics.  And as SAT scores continue  to drop, what is the DOE doing?

Social  Security, Medicare, and social welfare  for our neediest

First,  Chile provides a good example of moving social security to a private  model.  We don’t eliminate those in the program but move to the private  model over time.  The current approach is simply unsustainable in context  of the baby-boomers hitting retirement and the current IOU status of $2.5  trillion in Social Security funding from the federal  government.

Second,  Paul Ryan has provided a good model for modifying Medicare.  Again, no one  in the current system moves out of that system.  We really need to have a  debate about a modified voucher system allowing for individuals to control their  own purchase decisions based on their requirements.  The Ryan budget  approach certainly provides food for thought.  We buy home, auto, and life insurance.  Why would we be any less  able to acquire the appropriate health insurance as we get older?  The  argument is of course emotional, but if we cannot afford the projected costs of  fifty percent of our federal budget for the current program, what’s the  use?  We can choose to modify the program or be forced to modify the  program by bankrupting it when failure is imminent.

Third,  use block grants to move Medicaid funds to the states.  Allow them to  address their local needs within the context of their demographics and deal with  the actual health care requirements of their poorest citizens.  This  approach not only allows the states to innovate, but also address the problem  with “one size fits all” that typifies federal programs.

Society

No  amount of money is going to correct for the amount of single-parent families and  the poverty and developmental problems this creates in educational  outcome.  This does not mean that all single-parent families are failures  or that children from single-parent households can’t succeed.  It is simply  a fact that the research finds that these households are at greatest risk in  terms of poverty, lower educational success, and delayed emotional development  in general.

While  mixed families and transitional arrangements tend to see improved outcomes, the  traditional mother and father working with their children is the arrangement  that has the greatest propensity for success.  The current report on births  in the USA stated that 4.5 million children were born in the country last  year.  Over 40% were to single mothers.  While some choose to have  children and simply live together (think Hollywood), most are out-of-wedlock  births.

So  with such staggering statistics evident in our society, what is the  prescription?  First, get the message out and share the statistics.   Second, continue to invest in outcome-based education and move towards vouchers  and grants, however doing so through the local school board, where approaches  can be tailored to the student population.  Third, encourage marriage and  the family — stop accepting the current behaviors and promote the traditional  family as a source of benefit to children.  Divorce is too easy, and men  are too eager to ditch their responsibilities.  Until we unite financial,  moral, and spiritual elements of education and family development, these trends  will result in further degradation to our children’s lives and their success —  at school and in their adult life.

So  there they are — ideas that even Peter Orszag apparently can’t conceive — and  no Black Swan event.  It is an alternate vision for this country compared  to where President Obama is taking us.  There is little ambiguity here; it  is a transparent approach to those things that have motivated the American dream  for centuries — self-worth, self-action, collective creativity, and a unified  nation through its traditional family structure.

Would  it work?  Can’t tell you, for we may not even get to try.  But ask  yourself this one question: if these recommendations took place immediately,  would you do better financially; would job opportunities in energy,  manufacturing, health care increase; would your family be better off  financially; would you feel more secure about your future; and would you  appreciate the value placed on your family and its values?  Oh, and please  forward a copy to Peter.  He may be looking for a few good  ideas!

Mark  Skoda is a syndicated conservative  talk show host,  blogger, and founder of the Memphis TEA  Party.   He is also president of MPS Broadcasting.  He can be contacted at mark@markskoda.com.

 

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About drrik

3rd career and 2nd childhood. Spends spare time repairing old things. Aspires to burn more gasoline, gunpowder, and ink in pursuit of slowing down. Child of the 60s and aspiring student of history. No desire to see us repeat the failed social experiments that keep failing for lack of human beings that meet the left wing standards and have to be killed off. Did engineering long enough to realize that very little is new and the wheel does not need to be reinvented.
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