An OP ED submitted by Dr. Alan Phillips on the U.S, Chamber's Plan for Jobs

OPED

DEVELOPING A PLAN FOR JOB GROWTH, THE U.S. CHAMBER’S EFFORT

The administration must develop an action plan in this New Year 2010 for job growth. If the President fails to reference a meaningful proposal for job creation-restoration at his coming State of the Union address, he and the administration will face a challenging future.

On January 12, 2010, the U.S. Chamber of Commerce president, Thomas Donahue in his “state of business” address shared a ten year plan to create 20 million new jobs. This plan, imperfect at best, represents an attempt to address a major under and unemployment employment problem that threatens economic recovery and America's future. Several Chamber of Commerce observations are worth examination, they include;

Removal of trade barriers, expanding exports-I support this concept with two major refinements, jobs must be prohibited from export to foreign nations and trade should function on a level playing field, even if it means renegotiation of some existing trade agreements by the administration might be required.

Elimination of new taxes-maintain them at current levels-To provide incentives for U.S. job creation-restoration, there should be a major reduction in federal and state taxes on corporations, elimination of the capital gains levy, realizing that anything less is not an incentive for companies to create-restore jobs in the U.S. Martin Feldstein spoke to this practice in a May 14, 2009 article in the Wall Street Journal on “Tax Increases Could Kill the Recovery”. He reminded the administration and voters that “Historians and economists who’ve studied the 1930’s conclude that the tax increases passed during that decade derailed the economy and slowed the decline in unemployment. That was true of the tax on corporate earnings and of the 1937 introduction of the payroll tax. Japan did the same destructive thing by raising its value-added tax rate in 1977.”Countries like Ireland limiting corporate tax rates to 12.5% have attracted and created many new jobs and continue to attract businesses.

Build more roads and bridges with private capital-I support infrastructure improvement if it creates thousands of new jobs specifically targeted to projects of state, regional and national importance. The congress should support the adoption of bills such as HR2521 which seeks to establish a National Infrastructure Bank to direct private and public capital to infrastructure construction.

Boost access to capital across all business categories-I support access for large and small businesses to capital if they are known to be successful in creating-restoring jobs and are managed well. Banks must begin to lend to main street as well as small and large businesses in America. The economist for the National Federation of Independent Business has recently observed that “Capital spending is on the sidelines…Spending on capital projects remained at historic low levels, as did the demand for credit to finance such projects.” In short banks must lend not hold!

Remove uncertainty in economic direction. It is true, as the Chamber states, government uncertainty in economic direction is not a motivation for large and small businesses to create-restore jobs. The Chamber’s position however that it is opposed to taxing bank transactions, is one with which I fail to agree, unless such legislation prohibits bank pass thru of costs to consumers and small businesses, and banks continue to limit lending.

The Chamber’s goal of creating 20 million jobs in a decade, though noble, is not realistic in its time frame. Ten years is too long for millions of unemployed to wait for jobs. At least however, the plan is an imperfect effort to address the problem.

Dr. Alan Phillips, Sr.