AIFG Blogs

 David Park 

Founder and CEO, Austin Capital, LLC 

David is the Founder and CEO of Austin Capital, LLC, a boutique merchant bank that assists small companies with financial consulting with a focus on Private Equity.  Austin Capital manages Austin Capital Fund I and II, which includes companies in diverse but related industries including Business Process Outsourcing, Qualified Retirement Plans, Trust and Asset Management, and Information Technology.   

David has started or acquired 29 companies during his 20 years with Austin Capital with a focus on small and mid-size companies with revenues less than $100 million a year. Prior to starting Austin Capital he worked as a financial analyst at an emerging market money management firm focused on pension plans and traded derivatives on Wall Street.   He is a graduate of Tulane University and the current Chairman and Co-Founder of American Institute for Growth. 

"The question is, how can we get the ox out of the ditch?" Mr Skinner said. "In order to create jobs in America, you're going to have to cut taxes…  particularly in the business community. 

"We pay some of the highest [corporate] taxes around the world. There needs to be some leveling." 

Asked about federal borrowing, he said: "It's not a good story… the government has to spend less. We have to grow the economy, grow GDP… and you have to be able to do it in an organic way and not through borrowings and increasing debt." 

McDonald's army of blue-collar customers need more clarity on core issues, such as healthcare, he said. "Until all of that is all defined and certain… we're going to continue to have a fragile environment for consumer confidence." 

Skinner's intervention will be seized upon by President Obama's opponents amid a fierce debate in Washington over the country's deteriorating finances and high unemployment. As Democrats and Republicans fire up their 2012 election campaigns, the focus is on the "9pc nightmare", with both the US budget deficit and jobless total at that level. 

Federal government debt has climbed to $15 trillion (£9.4 trillion), about the same as annual GDP. Worse still, America's credit rating was recently downgraded by Standard & Poor's. 

As the leader of a remarkable turnaround at McDonald's, Skinner's comments will resonate across the country. His company is one of only a few big US employers still hiring in significant numbers, with more than 500,000 staff on its domestic payroll.

McDonald's has just delivered 100 consecutive months of same-store sales growth. It is ranked number one in the Dow Jones Industrial Average for total shareholder return over the past five years, with the share price rising from $12 in 2003 to $93 today. 

Skinner joined the company as a trainee store manager 40 years ago and was made chief executive in 2004. 

I worked hard to make my own small company into a big one but I never could have succeeded if I had faced the avalanche of impediments that our current government hurls down upon this generation of entrepreneurs. The White House’s job creation strategy seems designed to merely raise taxes while it appoints another blue-ribbon council to talk about the lack of jobs.  Does anyone really believe this will create the employment growth this country needs?  I certainly don’t.  What I do believe is that we must bring together the hard-working men and women who are on the front lines of job creation – small and medium-sized business founders and owners -- to light the way to renewed economic growth.

By giving real job creators -- whether shopkeepers or software engineers -- a voice, they can speak from real-world experience about how to create jobs and why job creation can’t be accomplished from Washington. I believe these business men and women could point out the policies that are obstacles and articulate policies that invite growth and investment, and most importantly—job creation.  Who better to defend free enterprise than entrepreneurs who have actually created America’s private-sector jobs?

These companies – high-tech and low, restaurants and retail stores, manufacturers and bakeries – are the businesses that drive job creation. Half of all American workers are employed at a small business and they have generated two out of three new jobs over the last 15 years. We can’t have a serious conversation about reducing unemployment without listening to the companies that aren’t on the Fortune 500 list.

Overregulation, unfair taxes, and new mandates, like the controversial healthcare bill, are choking these job-creating businesses before they can get off the ground.  The President’s State of the Union Address included calls to increase trade and cut corporate taxes, all things that help big businesses alright, but do little to help the small enterprises and start-ups that are the engines of economic growth. They need relief from the alphabet soup of regulations that stifles them and therefore chokes hiring.

From the EPA to the FDA, from the IRS to Sarbanes Oxley, regulations disproportionally affect the smallest firms, drowning America's entrepreneurs in red tape.  According to a study published last year by the Small Business Administration, firms with fewer than 20 employees spend 36 percent more per employee than large firms.  Regulations, on average, cost small firms $10,585 per employee each year: $4,120 to comply with economic regulations, $4,101 to comply with environmental regulations, $1,585 to comply with complex tax rules, and $781 to comply with OSHA and homeland security regulations.  In fact, more than 144,000 pages of regulations strangle small and large businesses alike. Congress must provide these innovators a break.

I know dozens of men and women who started with nothing, waiting in the hallway hoping the mailman would bring enough receipts to make payroll, working through the night, foregoing their own salaries so they could pay their bills, and yet fretting over filing a raft of forms for local, state and government regulators and worrying about bewildering new rules.  These are the true job creators and many feel downright abused by a government that ignores them, penalizes them and goes out of its way to impede their businesses.

These job creators want to grow their businesses, they want to hire new employees and they understand that they need to pay fair taxes.  But they don’t have a forum, they don’t have a voice, and they are frustrated when academics and life-long government employees – bureaucrats who know nothing about creating jobs -- determine policies that could either spur or stifle job growth. The heroes of the American economic dream are the people who take the risks, make the sacrifices, and still maintain the beliefs that propel them to success.  These job creators must tell us what policies they need to grow their business and put America back to work. I am now calling on all business founders, owners and leaders to join me in the ranks of the American Institute for Growth, a new organization I am proud to help create. Join me in this quest to allow free enterprise to not only heal our wounded economy, but to return us to the economic growth that we need to create jobs across America.

The nation’s political establishment praises small business owners for creating jobs when Election Day draws near.  At the same time, Washington and much of the media vilify those very same small business owners for creating profits — the very lifeblood that allowed them to create jobs in the first place.      

They are easy targets because the people who own small businesses -- from sole proprietorships to companies with hundreds of employees -- are most often “subchapter S-Corporations” and other pass-through companies such as partnerships and LLCs are often-times rich on paper because they have to report company earnings as personal income.  These entrepreneurs must set aside much, if not all, of their reported income to keep their businesses running through bad times or for investing for the future. Even though they may cut their own salaries to zero to stay afloat, many of these business owners are described as “millionaires,” making them prey for tax reformers.      

The people who start pass-throughs – there are more than 4.5 million S-Corporations in the U.S. today – pay no corporate taxes.  Instead they report their company’s earnings as personal income so that it is not taxed twice, enabling greater levels of capital investment and generating more jobs.      

For those who might take a cynical view, the fact is Ernst & Young also reported that 54% of all private sector employees – some 69 million people –  currently work for pass-through businesses, mainly S-Corporations.  Putting the squeeze on them for more taxes is not likely to encourage increased employment.  Instead, it is apt to force many of them to curtail expansion plans and perhaps even drive some of these companies out of business – right in the middle of what is the worst job crisis this country has known since the Great Depression.      

Worse still, there’s a plan afoot in Washington to force many of these companies to revert to “C-Corporation”  status, effectively allowing the government to double tax their earnings.  Ernst & Young says that this bit of tax reform would inflict more than $27 billion in onerous, additional taxes on the companies that employ the majority of the people in this country.      

Since the alleged end of the recent recession, we were creating some 200,000 new jobs a month and some argued that it was good news for the economy—even though new weekly unemployment applications have steadily hovered around the 400,000 level.?   But you don’t have to be a demographic genius to understand that this is a big country and we need 150,000 new jobs a month just to stay even with population growth.?  Worse yet, when the May report on new private sector job creation came in, economists were stunned to find that instead of the 175,000 new jobs they expected, we added only 38,000—a dismal reminder that current government business and regulatory policies are a failure..      

Consider also that there are some 18.5 million students currently enrolled in America’s more than 4,000 colleges and universities and that more than four million of them will graduate and enter the job market this year alone.  Do the math and you’ll see that at the current rate of job creation, we aren’t even close to catching up.  If we are going to make any headway, we need to add new jobs at a rate of 400,000 to 500,000 a month.  That is just not going to happen without the help of the nation’s small businesses.       

Let’s face it: the most powerful engine of job creation is small business.  The government’s own Small Business Administration statistics show S-Corporations and other pass-through small businesses have created more than two-thirds of net new non-farm jobs over the past decade and a half, accounting for nearly half of the nation’s private sector payroll.  Oh yes, they also produce 13 times more patents per employee than large firms, many of which are likely to influence the creation of even more job-creating start up businesses.       

The Ernst & Young study came to the conclusion that the tax reform schemes they are hatching up in Washington “would have the impact of raising the taxes paid by owners of businesses organized in flow-through form.”  In other words, we’d be shooting ourselves in the foot by imposing a new tax on job creation.       

The Millionaire Next Door, a book by Thomas J. Stanley and William D. Danko, points out that half the millionaires in this country own their own businesses.  For the most part, they took risks, sacrificed personal income so they could grow their businesses, put people to work in their communities and, by doing so, made significant contributions to the nation’s economic success.  More important, they continue to inspire others to do likewise.        

Many with a progressive bent may point to them and argue for redistribution of the wealth of America, making them out to be greedy and self-indulgent.  However, for the most part these so-called millionaires are, indeed, the next door neighbors who own the stores, restaurants and businesses in our communities and they create wealth, not only for themselves, but for all of us by creating jobs.       

Put them out of business, and we put the country out of business. Allowing Washington and the media to continue to vilify and threaten these alleged “millionaires and billionaires” with higher taxes not only chokes the American economic engine, but will ensure that the jobs crisis only worsens.

Job creation is the number one issue on the minds of most Americans. Yet unemployment, along with the overall U.S. economy, is not gaining positive momentum.  

The truth is that jobs are created by businesses, not governments. Business people, unlike many politicians, have the practical real-world experience and understanding of what is needed to restore the job growth in America.  

Job Creators’ Alliance (JCA) was established so that America’s business leaders can be heard. Our members are entrepreneurs and CEOs who have come together to tell the public what it will take to grow our economy and preserve the United  States’ free enterprise system for succeeding generations.  

As business people, AIFG CEOs know how to create jobs and put Americans back to work. AIFG will educate the public through a national communications campaign encompassing broadcast, print, online and social media. The goal is to encourage an environment in which dynamic job growth can be quickly, directly, and effectively restored across all sectors of the economy.  

Our members have worked day and night to build dynamic, profitable businesses. They know what it means to meet payroll obligations and have risked their savings to create jobs. They are men and women who have experience responding to new laws, and they understand how tax, health care, regulatory, energy and trade policies can dramatically affect their businesses. AIFG CEOs are the premier authorities on job creation and they want to educate the public on what it will take to restore dynamic job growth. Our CEOs are willing to do their part in taking the lead on job creation, but they still need policymakers to remove the barriers to job growth that still exist.   

Business leaders from across the country have come together to create a new organization dedicated to restoring job growth and returning the nation to economic prosperity. The American Institute for Growth (JCA) today launched its website, www.jobcreatorsalliance.org, and formally announced its initiative to share practical, real-world experience and give voice to the entrepreneurs who are responsible for creating and maintaining more than half of the American workforce.  

“The men and women who took the risks and made the sacrifices to start and grow their stores, factories, software enterprises and restaurants have hands-on experience and first-hand knowledge of how to restore job growth and rekindle the flame of American business,” said Bernie Marcus, co-founder of The Home Depot, Inc. (NYSE: HD), and founding member of the JCA. “They will tell us what we need to do to put America back to work. Our goal is to give their point of view a clear, articulate and non-partisan voice.  

“We hear a great deal from government officials, academics and media pundits about our shocking unemployment statistics,” Marcus said. “It’s time to hear from the men and women on the front lines of hiring. Let them tell us how basic policies can change our economy and return this nation to prosperity.”   

The American Institute for Growth is a not-for-profit, 501 (c) (3) organization dedicated to educating the public on what it will take to grow our economy and preserve the United States’ free enterprise system for succeeding generations. AIFG members are business leaders, both active and retired, from diverse industries and geographies. AIFG member businesses range from software development to retailing, from restaurant ownership to banking; and their locations span from coast-to-coast and from Minnesota to Georgia.   

JCA has created a highly interactive website, designed with journalists in mind so that they can find business leaders to address issues they are interested in. The experience and expertise of each of the AIFG members is described along with their backgrounds. Some members have video vignettes posted so broadcast and online journalists can determine which AIFG member would be most appropriate for a particular show or segment.  

“JCA members are on the front lines of job creation,” said Jeanette Goodman, president of JCA, which is based in Dallas. “As business people, they know how to create jobs and put Americans back to work. Our members will educate the public through a national communications campaign encompassing broadcast, print, online and social media.”   ? 

JCA Leaders  ? ? 

• John Allison: Former Chairman & CEO, BB&T Corporation, Winston-Salem, NC ? ? 
• Brad Anderson: Former CEO, Best Buy Co., Inc., Minneapolis, MN ? ? 
• Fred Eshelman: Founder & Executive Chairman, PPD, Inc., Wilmington, NC ? ? 
• William “Lee” Hanley: Principal, Lexington Management, Greenwich, CT ? ? 
• Michael Holthouse: Founder, Prepared 4 Life, Houston, TX ? ? 
• Javier Loya: Chairman, CEO & Co-founder, OTC Global Holdings, LP, Houston, TX ? ? 
• John Mackey: Co-founder and Co-CEO, Whole Foods Market, Austin, TX ? ? 
• Bernie Marcus: Co-founder & Former CEO, Home Depot, Atlanta, GA ? ? 
• David Park: Managing Partner, Austin Capital, LLC, Dallas, TX ? ? 
• Art Pope: CEO & Chairman, Variety Wholesalers, Inc., Henderson, NC  ? 
• Susan Story: President & CEO, Southern Company Services, Atlanta, GA ? ? 
• Michael Whalen: CEO, Heart of America Group, Moline, IL

DALLAS, June 15, 2011

Last week the National Labor Relations Board (NLRB) proposed a new rule that will make hiring workers in America more difficult for businesses. The proposed rule would allow union bosses to hold workplace elections less than two weeks after announcing them.  See the complete article at the  Daily Caller  http://dailycaller.com/2011/06/29/nlrb-proposes-new-rule-that-would-hurt-job-creation/ 

People are understandably demanding answers to the unemployment challenge. What's the cure? What will it take to generate more jobs for America?

As a longtime banking CEO, I know first-hand and with certainty how jobs are created — and it's not by government bureaucrats waving magic wands. Jobs are created by private businesses, from the large multinational corporation down to the sole proprietor who mows grass and spreads mulch.  

Jobs are created so businesses can develop new products and services — and improve existing ones — and expand into new markets — and increase the quantities produced, and the efficiency of that production.  

In today's economy, entrepreneurs and business leaders are eager to ramp up production, launch new products, open new branches and create new jobs. But what's standing in the way of translating that eagerness into paychecks? Government policies that undermine the rule of law, create destructive boom-and-bust cycles, and generate massive deficits.

Under the rule of law, the legal system specifically defines unlawful behavior and gives fair warning of the punishment for wrongdoing. Instead, we suffer under the rule of regulators.  

Every year, Congress and state legislatures concoct new schemes to clamp down on business freedom. Using real wrongdoers as a pretext, they declare the entire business world guilty without a trial and pass a sentence of perpetual supervision by an army of bureaucrats who halt progress until they get around to doling out licenses, permits, inspections and new rules.  

The result is that businessmen live in perpetual fear of government reprisals.

In this connection, remember that jobs created by businesses in a free market are productive —  they help create profits, and if the profits stop, the jobs disappear.

By contrast, government programs that fasten controls on business destroy jobs. We would never tolerate a government bureau that hires a thousand thugs to go around breaking people's arms. But we tolerate monstrosities like Sarbanes Oxley, which operates the same way in principle — crippling innocent businesses with onerous accounting controls on the pretext of catching the next Enron or WorldCom in the act.

Of course, we need government to punish crimes and frauds, and to remedy breaches of contract and negligence. But "innocent until proven guilty" is an American ideal that should not be restricted to criminals. Because jobs are investments, the more needless costs are imposed by government on businesses, the fewer investments those businesses can make, in jobs.  

What was it that our Founding Fathers said about King George III in the Declaration of Independence? "He has erected a multitude of New Offices, and sent hither swarms of Officers to harass our people and eat out their substance."  

Job creation also suffers because of economic uncertainty. We have a Federal Reserve that prints money according to its own intuitions, causing prices to fluctuate unpredictably, so that a profit-seeking business can't project the costs of its raw materials five days into the future, much less five years. The result? An unfortunate reluctance to launch new projects, based on inability to project future profits.  

Of course, the future is always uncertain even in a free market. But when government allows the economy to operate without interference, an underlying predictability emerges from the fact that malinvestment is quickly identified, prices readjusted, and labor and capital shifted, so that the market bottoms out and growth begins anew.  

Look at what happened with the subprime loan debacle. First, government generated an artificial housing boom with tax breaks for home ownership, bureaucratic requirements to fund unqualified buyers, a ready market for bad loans provided by Fannie Mae and Freddie Mac, and virtually free money for speculation furnished by the Fed.  

But once the boom gave way to an inevitable bust, the government blamed it on too much capitalism and too little regulation. So instead of allowing the government-created mess to bottom out, our political leaders employed classic methods to distort the market — bailouts, price props and foreclosure interference, to name a few.  

Meanwhile, all sorts of jobs held by developers, mortgage brokers, construction workers and real estate attorneys dried up, leaving the people who held those jobs lagging behind in the skills needed to compete in other sectors.  

Today, unfortunately, jobs are not being created fast enough to return to a sound economic environment because an out-of-control government is strangling the freedom businessmen need to carry out the kinds of plans that create jobs.  

Let's free up business, and watch how far they can take us, and how fast.    
 
 

Allison is former chairman and CEO of BB&T Corp. and a leader of American Institute for Growth, a group of current and retired CEOs and entrepreneurs who have come together to preserve the free enterprise system for succeeding generations.

By John Goodman, Published on Townhall.com-July 16, 2011

Why aren’t employers hiring more workers? Why are so many people seeking work unable to find anything other than part-time positions or temporary employment? And that’s when they can find a job at all. In short, what’s causing the continuing stagnation of the U.S. economy?   

Former Sen. Phil Gramm observed in the Wall Street Journal the other day that we’ve had recessions before. But at this point in the cycle we should be roaring back. Had we followed the pattern of the previous 10 recessions, almost 12 million more people would be employed right now, producing additional goods and services worth more than $8,000 for every household in America.  So what gives?  ? 

American Institute for Growth (JCA) is an alliance of business leaders who are focused on this very issue. These are employers who are in the trenches, facing the economy’s woes day in and day out. Two of them told Fox Morning News last week that the reasons for slow job growth boil down to basic common sense. (Fair disclosure: my wife Jeanette is the director of the organization.) 

Think of it this way. When an employer hires a full-time worker, the employer thinks of the relationship as long term. During an initial training and learning period, the employer probably pays out more in wages and benefits than the company gets back in production. But over a longer period, the hope is to turn that around and make a profit. When employers hire new employees, then, they are making a gamble. They are betting that over time, the economics of the relationship will pan out. 

The problem in the current economy is that hiring new workers and committing to new production has become extremely risky. As the AIFG folks explain, an employer who hires workers today has no idea what the company’s future labor costs will be. Or its building and facility costs. Or its cost of capital. Or its taxes.   ? 

What’s causing all this uncertainty? You guessed it. Nobody knows what is going to happen in Washington, D.C. 

Take the cost of labor. The Affordable Care Act (what some people call ObamaCare) is designed to force employers to provide full-time employees with comprehensive health insurance in less than three years. While the goal may be admirable, the consequences are not. Although no one knows how much this extra burden will cost, estimates are that the required family coverage will reach $15,000 a year or more — the equivalent of an additional $6 an hour minimum wage.  Employers could decide to drop their health insurance altogether; and if they do so they must pay a fine of $2,000 per employee per year. Yet if a lot of employers do this (and apparently a lot of them are thinking about it), don’t you think the federal government will respond by making the fine a lot higher? 

Then there is the National Labor Relations Board (NLRB). After the aircraft maker Boeing spent $1 billion building a new plant and hiring 1,000 workers in South Carolina, the agency brought a halt to the whole thing, calling it an unfair labor practice. Boeing’s sin? South Carolina is a right-to-work state. The company should have built the plant in Seattle, where it would be required to use union labor. 

There is more bad news. The NLRB is considering rule changes that would make it much easier to unionize workers. Would you like to see employers across the country facing the same kind of turmoil state governments are now facing in dealing with public sector unions? Most employers don’t relish that idea either.

Under the Obama presidency, the NLRB has made a radical change of direction. Some would say it is much more pro-labor, but this is a misnomer. What the agency is dedicated to is not labor, but making labor more costly. 

As for capital investments such as new buildings and new equipment, here again there is considerable regulatory uncertainty. It should come as no surprise that the Obama administration is overly friendly to environmental groups who see carbon dioxide emissions as pollution. Yet every act of production emits carbon dioxide. You even emit it when you exhale. 

As for the cost of financial capital, what is going to happen is anybody’s guess. When the Bush tax cuts finally do expire, the tax on capital gains will increase by a third and the tax on dividends will more than double. The administration has made no secret that it would like to accelerate these tax increases and make them even higher. 

Bottom line: even if there were no Republican opposition in Washington, we would be in trouble. The Obama administration is profoundly anti-labor. It thinks it is pro-labor, of course. But that is because it is so naïve about economics that it doesn't understand that when you make hiring more costly there will be less hiring.

But there are Republicans in Washington, and (ironically) their presence in some ways adds to uncertainty. While the two parties are battling, who knows what the outcome will be. No one can. 

So the best strategy from a business perspective is to sit on cash, delay the employment of labor and capital and wait to see what happens next. 

John C. Goodman 

John C. Goodman is president and founder of the National Center for Policy Analysis, a free-market think tank established in 1983. Goodman’s ideas on health policy can also be found at his own blog, where he provides daily analysis and lively discussion on a wide range of health care topics.

By John Berlau & Wayne Crews, POLITICO 7/19/11 9:37 PM EDT

President Barack Obama may have inadvertently revealed one area of common ground with the Republicans during his recent news conference laying out sharp differences with the GOP.    

“We’re reviewing government regulations, so that we can fix any rules in place that are an unnecessary burden on business,” Obama said, following up on his calls earlier this year for repealing “outdated regulations that stifle job creation.”     

This language sounds strikingly similar to language in the House GOP’s “Plan for America’s Job Creators,” released in May. “We must remove,” this plan states, “onerous federal regulations that are redundant, harmful to small businesses and impede private-sector investment and job creation.”     

Though both parties now want the debt ceiling package to address issues of economic growth, no one has put measures to rein in regulation on the table. Since Obama and GOP leaders are saying that overregulation is a barrier to job creation, it’s time to make regulatory curbs part of the debt ceiling negotiations.     

Regulations cost the U.S. economy roughly $1.75 trillion per year, according to the Small Business Administration’s Office of Advocacy. The 2010 Federal Register, which spells out all new government regulations, stands at an all-time high of 81,405 pages, as counted by the Competitive Enterprise Institute’s annual study, “Ten Thousand Commandments” (which, in full disclosure, was written by one of the authors of this piece).    

There is strong precedent for including regulatory reform in a debt ceiling deal. In 1996, President Bill Clinton’s and the Republican-controlled Congress’s sharp differences resulted in a breach of the debt limit for more than four months, as well as a shutdown of government services that took more prominence in the headlines. The GOP Congress ultimately yielded in its demand that Clinton had to sign on to a balanced-budget plan with deep spending cuts.    

In return, however, the $5.5 trillion debt ceiling hike that Clinton signed advanced another major GOP concern: overregulation. The Congressional Review Act expedited the process for Congress to block a regulation after a final rule had been issued. It also added judicial review provisions to the Regulatory Flexibility Act to help ensure that regulations weren’t overly burdensome to small business.    

Clinton praised the law for “respond[ing] to the legitimate concerns of small businesses regarding regulatory burdens” in his signing statement.    

The ideological gulf today between Obama and the GOP on many of these regulations is indeed wide. It may be unrealistic to address specific rules stemming from the health care and financial overhauls in the debt ceiling deal.    

Yet since both Obama and the GOP recognize that regulation can be a barrier to growth, the 2011 debt ceiling package can update the accountability framework from 1996 to hold regulatory agencies more answerable to Congress and the courts. Any hike in borrowing authority should be linked to passage of major elements of bills in Congress to reform the regulatory process.    

First, a debt ceiling deal should include passage of the Freedom Act sponsored by Sen. Olympia Snowe (R-Maine). Fifty-three senators — including six Democrats — supported this bill when it was voted on as an amendment in June. The act is designed to give small business more access to the courts to challenge rules.    

Even with judicial review, current rules that require agencies to minimize costs for smaller firms lack teeth — because firms must first “exhaust” time and money-consuming challenges with the agencies before they get their day in court. This can be difficult, if not close to impossible, for small firms that might have trouble securing money for day-to-day operations, let alone a costly lawsuit.    

Snowe’s bill could make this process easier for smaller entrepreneurs by allowing suits to be filed as soon as a rule is proposed.    

Just as this bill attempts to give the courts more oversight over regulations, the proposed Reins Act (Regulations from the Executive in Need of Scrutiny Act) is devised to do the same for Congress. It would require that major rules estimated to cost the economy $100 million or more must be approved by both houses of Congress.    

The bill has been praised by respected scholars, including New York Law School Professor David Schoenbrod and Case Western Reserve University professor Jonathan Adler. Adler writes in the current issue of the policy journal Regulation: “Requiring congressional approval before economically significant rules may take effect ensures that Congress takes responsibility for major regulatory policy decisions.”    

He notes that the Reins Act designs a streamlined procedure for approval of regulations that is not subject to filibuster. Adler compares the bill to legislation creating “fast-track-trade authority or base closing” procedures, arguing that it is unlikely to delay “needed regulatory initiatives.”    

Meanwhile, Virginia Sen. Mark Warner’s “one-in, one-out” proposal for balancing new regulations by getting rid of old ones at least helps put a “ceiling”  on today’s regulatory enterprise. It belongs on the table, too.    

Balancing the budget and reducing spending are important in addressing fiscal woes. But to resolve the current “ceiling” we suffer on job creation, we must reduce the “regulatory budget” of costly mandates faced by entrepreneurs.     

John Berlau is director of the Center for Investors and Entrepreneurs at the Competitive Enterprise Institute. Wayne Crews is CEI’s vice president for policy and author of “Ten Thousand Commandments.”

By JOHN MERLINE, INVESTOR'S BUSINESS DAILY, JULY 21, 2011

Bernie Marcus co-founded Home Depot (HD) in 1978 and brought it public in 1981 as the U.S. was suffering from the worst recession and unemployment in 40 years. The company thrived, creating hundreds of thousands of jobs and redefining home improvement retailing.  

But Marcus says Home Depot "would never have succeeded" if it launched today due to onerous regulation. He recently helped launch the American Institute for Growth, a Dallas-based nonprofit of CEOs and entrepreneurs dedicated to preserving the free enterprise system. IBD recently spoke to him about jobs and the economy.   

IBD: What's the single biggest impediment to job growth today?  

Marcus: The U.S. government. Having built a small business into a big one, I can tell you that today the impediments that the government imposes are impossible to deal with. Home Depot would never have succeeded if we'd tried to start it today. Every day you see rules and regulations from a group of Washington bureaucrats who know nothing about running a business. And I mean every day. It's become stifling.  

If you're a small businessman, the only way to deal with it is to work harder, put in more hours, and let people go. When you consider that something like 70% of the American people work for small businesses, you are talking about a big economic impact.  

IBD: President Obama has promised to streamline and eliminate regulations. What's your take?  

Marcus: His speeches are wonderful. His output is absolutely, incredibly bad. As he speaks about cutting out regulations, they are now producing thousands of pages of new ones. With just ObamaCare by itself, you have a 2,000 page bill that's probably going end up being 150,000 pages of regulations.  

IBD: Washington has been consumed with debt talks. Is this the right focus now?  

Marcus: They are all tied together. If we don't lower spending and if we don't deal with paying down the debt, we are going to have to raise taxes. Even brain-dead economists understand that when you raise taxes, you cost jobs.  

IBD: If you could sit down with Obama and talk to him about job creation, what would you say?  

Marcus: I'm not sure Obama would understand anything that I'd say, because he's never really worked a day outside the political or legal area. He doesn't know how to make a payroll, he doesn't understand the problems businesses face. I would try to explain that the plight of the busi nessman is very reactive to Washington. As Washington piles on regulations and mandates, the impact is tremendous. I don't think he's a bad guy. I just think he has no knowledge of this.  

IBD: Why don't more businesses speak out?  

Marcus: They are frightened to death — frightened that they will have the IRS or SEC on them. In my 50 years in business, I have never seen executives of major companies who were more intimidated by an administration.  

IBD: What's your message to the business community?  

Marcus: It's time to stand up and fight. These people in Washington are out there making your life difficult, and many of you won't survive. Why aren't you doing something about it? The free enterprise system made this country what it is today, and we've got to keep it alive. We are on the edge of the abyss.  

At the American Institute for Growth, we're trying to recruit people who are willing to step up and say: " I've had it. There's no one representing me. I want to be out there and fight."

BY:  REPRESENTATIVE JEB HENSARLING (R-TEXAS), CNBC, JULY 21, 2011

Some anniversaries are better left uncelebrated and the one-year anniversary of the enactment of the 2010 Dodd-Frank Act is certainly one of them. Of all the federal government’s confidence killers over the past several years—from the failed “stimulus”  package to the government takeover of health care—the Dodd-Frank Act ranks right with them as a barrier to job creation.  

Last July, before President Obama signed the massive 2,300-page bill into law, its Democratic supporters promised the American people that Dodd-Frank would “increase investment and entrepreneurship” and “foster competitiveness, confidence in our financial sector, and robust growth in our economy.”  

It has not.  

Just this past week, in a politically-charged op-ed in the Wall Street Journal, Treasury Secretary Tim Geithner touted Dodd-Frank’s contributions to our economy and said “the U.S. financial system is in much stronger shape” and that his department’s actions “helped to restart economic growth.”  

Wrong again.  

One year after the bill Secretary Geithner said was “designed to lay a stronger foundation for innovation, economic growth and job creation” received his boss’ signature, how’s our economy really doing?  

The facts speak for themselves. National unemployment has risen to 9.2 percent and 22 million Americans can’t find full-time work. More than 44 million Americans are now on food stamps. Entrepreneurship is trapped in a coma as new business creation has fallen to a 17-year low. The unofficial Misery Index, which measures unemployment and inflation rates, is at a 28-year high.  

A House Financial Services Committee report issued last week found the overall budget cost of Dodd-Frank through fiscal year 2012 will be more than $1.2 billion, with an estimated 2,260,631 annual labor hours required to comply with the ten percent of the red tape that’s been issued so far.  

Dodd-Frank was sold to the American people as an economic growth bill. Instead, the law emitted shockwaves of consequences—mostly intended—that threaten to slow growth and make our nation’s unemployment crisis even worse.   ? 

Instead of addressing the real flaws that led to the very real financial crisis, the law’s architects futilely sought to promote financial stability by eliminating any chance of risk in our economy. They failed to grasp what the American people know to be true: you cannot outlaw risk without losing reward, and you cannot achieve a stable economy by privatizing profits and socializing losses.  

As any lawmaker ought to know, the right reforms to any problem must be based on the right diagnosis, and without that you cannot possibly hope to find the right cure. House Republicans were the first to introduce comprehensive reform to create certainty in the economy with fair application of the law by stopping the bailouts, ending “too big to fail,” and addressing one of the root causes of the crisis – Fannie Mae and Freddie Mac. Dodd-Frank failed to address these problems from the start.  

In this era of high unemployment, nothing in the bill was designed to help create jobs. With at least three unintended consequences on each page, and an expected 2,800 government employees needed to enforce it, the only professions likely to benefit from its passage are lawyers and bureaucrats.  

What was billed as a consumer protection measure in theory is, in practice, designed to limit consumer rights. Its provisions to ban and ration credit products are certain to make credit more costly and less available. Its derivatives title will potentially move trillions of dollars off shore, restricting the ability of local utilities to manage risk and further hampering job creation.  

Dodd-Frank is not only anti-consumer and anti-creditor, but also anti-taxpayer. The Democrats claimed to end taxpayer-funded bailouts and “too big to fail” in the bill’s title, but failed to accomplish that in the actual law. And despite Secretary Geithner’s most recent claims, Dodd-Frank does not require any reform whatsoever of Fannie Mae and Freddie Mac, the two government-sponsored entities that have cost taxpayers billions and exposed them to trillions more in losses. If he truly believes in “winding down” these GSEs as he says he does, then he should support the legislation I introduced in March.  

After the 2008 financial collapse and the widely unpopular TARP bailout that followed, Americans felt understandable antipathy toward Wall Street. Democrats felt empowered, and their plans to rein in Wall Street excesses and end the notion of “too big to fail” sounded appealing to many. But as the past couple years have taught us, good intentions and slick slogans don’t necessarily translate to sound public policy, job creation, and economic growth.  

On its first anniversary, Dodd-Frank is nothing worth celebrating, and the nation can now see it for what it really is: a deadly cocktail of political favoritism, regulatory overreach, and radical measures that’s only succeeding in killing the confidence that job creators and job-seeking Americans so desperately need.  

Rep. Hensarling serves as Chairman of the House Republican Conference and Vice Chairman of the House Financial Services Committee.

By YLAN Q. MUI and JON COHEN, WASHINGTON POST, JULY 25, 2011

More than a third of Americans now believe that President Obama’s policies are hurting the economy, and confidence in his ability to create jobs is sharply eroding among his base, according to a new Washington Post-ABC News poll.   
 

But Americans’ discontent does not stop there. The survey also found that Americans harbor negative feelings toward congressional Republicans. Roughly as many people blame Republican policies for the poor economy as they do Obama. But 65 percent disapprove of the GOP’s handling of jobs, compared to 52 percent for the president.    

The dissatisfaction is fueled by the fact that many Americans continue to see little relief from the pain of a recession that technically ended two years ago. Ninety percent of those surveyed said the economy is not doing well, and four out of five report that jobs are difficult to find. In interviews, several people said that they feel abandoned by both parties, particularly as debates over the debt ceiling gridlock Washington.    

“What I’ve realized is it doesn’t matter if you’re Republican or Democrat anymore,” said Joey Wakim, 21, a used car salesman from Allentown, Pa. “We just want somebody who’s gonna get things right.”    

The Post-ABC survey found that a majority of Americans still blame former presidentGeorge W. Bush for the state of the economy. But it also found that Americans who identified most closely with the burgeoning tea party movement are more likely to have experienced lifestyle changes because of the downturn.    

Rose Bear, 52, said her husband travels 800 miles round trip to work in North Dakota because there are not enough jobs near their home in Laurel, Mont. Bear said she supports the tea party in part because of its focus on taxes and employment.    

“If you keep throwing up the taxes and busting the guy who’s employing you, people are gonna lose jobs,” she said. “They’re addressing the issue of the joblessness.”    

The poll showed support for Obama’s economic agenda has begun to slip in the past nine months. The percentage of people who said Obama has made the economy worse jumped six points since October to 37 percent. That creates a bigger opening for Republican attacks as the presidential campaign begins to heat up.     

The latest viral video by the Republican National Committee hones in on the jobs lost since Obama took office. Presidential hopeful Mitt Romney has made “Where are the jobs?” a catchphrase of his campaign. Tea party favorite Michele Bachmann made waves earlier this month when she proclaimed that she would create “real jobs” for Obama and Treasury Secretary Timothy F. Geithner if she ousted them.    

Still, Obama receives higher marks from crucial independents than Republicans when it comes to jobs. But appeasing his own party could prove to be a bigger challenge.    

The Post-ABC poll found that the number of liberal Democrats who strongly support Obama’s record on jobs plunged 22 points from 53 percent last year to 31 percent. The number of African Americans who believe the president’s actions have helped the economy has dropped from 77 percent in October to just over half of those surveyed.   

Justin Ruben, executive director of the progressive MoveOn.org, said many people are frustrated by the bitter partisan battle over raising the debt ceiling that has consumed Washington, calling it a “bizarro parallel universe.” Another liberal group, Campaign for America’s Future, said it is planning a national protest Tuesday urging a speedy resolution over the national debt in order to refocus attention on unemployment.    

“Many liberal Democrats are hoping that Obama can pivot from defending Social Security and Medicare and Medicaid to putting forward his own plans for creating jobs,” the group’s co-director Roger Hickey said.    

Wakim, the used car salesman, is among the self-identified liberal Democrats whose support of Obama has begun to falter. He said he spends as much as $80 on gas each week and has seen other bills rise while business is “hit or miss.”    

Wakim said he has applied for a job as a police officer to help pay his bills while he attends community college. The economic downturn has changed his views on politics, and he said he wants Washington to buckle down.    

By:  JOHN ENGLER, PRES. BUSINESS ROUNDTABLE, WALL STREET JOURNAL, JULY 26, 2011

Permanent link

President Obama won praise from businesses in January when he promised to bring "reason and balance" to a "21st-century regulatory system." Yet now, fewer than six months later, his administration is preparing to issue the single most expensive environmental regulation in U.S. history, a job-killing rule it is under no obligation to impose on the struggling economy.  

There's nothing reasonable or balanced about the Environmental Protection Agency's proposal to tighten national air-quality standards for ozone emissions at this time. For one thing, it's premature, coming a full two years before the EPA is scheduled to complete its own scientific study of ozone emissions in 2013.  

The EPA's new standards are currently under review by the Office of Management and Budget but could end up on the president's desk in the next few days. If implemented, they would reduce the existing 0.075 parts per million (ppm) ozone standard under the National Ambient Air Quality Standards program to 0.070 ppm or even 0.60 ppm.  

This will mean that up to 85% of the counties currently monitored by the EPA would fall into "nonattainment" status, exceeding the air-quality ozone standards and triggering a cascade of federal and state controls.  

The EPA estimates these new standards could cost business anywhere from $20 billion to $90 billion annually. New or expanding companies would be required to obtain emission offsets and install controls. Existing businesses would face expensive new retrofit requirements just to keep operating as they have for years.   

On behalf of the Business Roundtable, Dow Chemical CEO Andrew Liveris recently wrote to White House Chief of Staff William Daley, noting that the EPA's new ozone rule threatens "to seriously impede economic expansion" and "discourage capital investment" in the counties affected. "Instead of creating jobs," Mr. Liveris wrote, "these counties risk losing jobs when businesses respond to the higher costs and uncertainty by closing marginal facilities and siting new facilities elsewhere, including outside the U.S."  

As president of the Business Roundtable, I joined leaders of other national industry and business associations to raise these points in a July 15 meeting with EPA Administrator Lisa Jackson. While Ms. Jackson acknowledged our concerns, we left the meeting concerned that her priorities differed from the president's.   

Writing in these pages on Jan. 18, Mr. Obama acknowledged the legitimacy of the private sector's objections to the multibillion-dollar mandates pouring forth from the federal government's regulatory agencies. "Sometimes, those rules have gotten out of balance, placing unreasonable burdens on business—burdens that have stifled innovation and have had a chilling effect on growth and jobs."   

The Business Roundtable welcomes the administration's desire to engage in a retrospective analysis of regulatory burdens that could aid U.S. competitiveness. But the EPA's onerous new ozone regulations would wipe out any progress that's been made. The case for restraint remains strong. Not only is the economic recovery stumbling (witness the dismal 9.2% June unemployment rate), air quality has been steadily improving without additional mandates. According to the EPA's own data, between 1990, when the Clean Air Act underwent it last major revision, and 2008, emissions of six common pollutants, including ozone, were down 41%.  

Most important, the current rulemaking pre-empts the scientific review now under way by an EPA-appointed panel. There is no reason to rush through new standards before it is even clear they are necessary or desirable.  

Regulatory actions speak louder than words. Mr. Obama could demonstrate his dedication to "reason and balance" by sending the new ozone rules back to the EPA until its scientific review is completed. The nation can certainly wait for new standards until 2013, when, as we all hope, the economic recovery will be on firmer ground.  

Otherwise, the president's "21st-century regulatory system" will become known not for its balance but for its excesses.  

Mr. Engler is president of the Business Roundtable, a trade association representing CEOs of major U.S. companies.

From NOBEL LAUREATE GARY BECKER and JUDGE POSNER'S BLOG, JULY 24, 2011

Job recovery in America has been disturbingly slow during the two years since the official end of the 2007-09 Great Recession. Unemployment has declined by only a single percentage point to 9.2% from its peak of 10.2% in 2009, while the percent of the adult population that is working is even lower than it was at the end of the recession. To put these figures in perspective, two years after the end of the severe recession of 1981-82, the unemployment rate was down by 3,6 percentage points from its peak of 10.8%, while the fraction working was up by 2.5 percentage points.   
 

To be sure, while the recession of 1981-82 was the sharpest since the end of World War II prior to the Great Recession, it did not have as deep a financial crisis as the one that started in 2007. Although recoveries from financial crises are notoriously slow and erratic, the slowness of the current employment (and output) recovery is still obviously of great concern. The data on the duration of unemployment spells adds to the uneasiness. The great majority of workers can handle an unemployment spell of a few months since they can draw down savings, borrow from family members, live off a spouse’s earnings, and often qualify for unemployment compensation, Medicaid, and other government assistance programs. Unfortunately, however, many of the unemployed have been out of work for more than just a few months: over 40% have not had a regular job for at least 6 months, and almost one-third of the unemployed had not had a regular job for over a year.   
 

Economists, political leaders, and public intellectuals have put forward various and conflicting ideas about how to improve the employment and unemployment picture. Some economists advocate further large fiscal stimulus packages in order to compensate for what is considered insufficient aggregate demand for goods and services by consumers and investors. Yet we already had close to a trillion dollar badly designed stimulus package, tax credits for first time homebuyers, a senseless “cash for clunkers” program, and other federal programs that have not had any clear sustained effect on moving the economy forward.   
 

It is obvious now that forecasts by some economists in President Obama’s administration that these programs would reduce unemployment to under 8% were far too optimistic. Although little consensus exists on what in fact was achieved by the major $800 billion stimulus package, I do not know of convincing evidence that it accomplished a lot in reducing unemployment and raising employment. So it is hard to be optimistic that an additional stimulus package would be designed better or work any better, and of course, it would add to an already large fiscal deficit.   
 

Other proposals to increase employment operate not by trying to stimulate aggregate demand for goods, but by directly encouraging employers to raise employment. One simple proposal is to give employers a subsidy for each worker employed, such as a subsidy equal to 10% of wages paid. This approach is simple but it would be expensive, and it would be inefficient since the vast majority of employees would have jobs without any subsidy. Even if the wage subsidy increased employment by 10 percentage points-which would be huge- 90% of the subsidy would be spent on workers who would have been employed anyway. At a 10% wage subsidy per worker, this means about 9% of the aggregate wage bill, which amounts to trillions of dollars, would simply be a transfer from taxpayers to employers. Such an expensive and inefficient program is hardly politically or economically attractive when the current political debate is over how far to cut, not increase, federal spending.    
 

Recognizing the waste of such an overall wage subsidy, another approach subsidizes new hires only. This approach does avoid subsidizing all employment, but it fails to appreciate the magnitude of new hires even during bad times. The JOLTS data published by the federal government indicate that over 4 million persons are newly hired each month even during the current post recession period. Therefore, subsidizing new hires would pay subsidies for about 50 million new hires annually. If the subsidy per hire were $3000 (about 10% of their annual earnings), this would cost some $150 billion per year.   
 

This is not chicken feed even for the federal government. Moreover, employers would try to game the system by laying off some workers so they can hire other workers and gain the new-hire subsidy. The result would be an increase in the number of persons becoming unemployed along with greater exits from the unemployment state. The net effect on employment would probably be positive and overall unemployment would tend to decrease, but the employment bang for the substantial bucks involved would be quite small.   
 

Aside from the depth of the financial crisis, I believe the main source of slow hiring initially were the many anti-business proposals voiced by some members of Congress and even by the president. Many of these were discarded or tamed down, but Obamacare (the Patient Protection and Affordable Care Act) and the Dodd-Frank Wall Street Reform and Consumer Protection Act have raised the prospects of higher and less certain health care costs for businesses, and greater regulation and more uncertainty about government policy in the financial and consumer areas. Neither Act gives employers an incentive to expand their payrolls.   
 

Adding to this is the huge uncertainty about what Democrats and Republicans can agree to on taming the large fiscal deficits, the looming entitlement crisis, and the exploding debt. No wonder that businesses are playing it close to their chests by keeping their payrolls down, and by their reluctance to commit to long-term investments.   
 

I am pessimistic that much can be done in the short term to stimulate employment. That is doubtless correct in a realistic sense, but I think it worth pointing out that if politics were not what they are much could probably be done and at low net cost and possibly even with net cost savings. 

The simplest short-term (but also long-term) stimulant to employment would be to reduce the minimum wage, which has risen greatly in recent years. This would reduce the cost of labor to employers and hence encourage the substitution of labor for capital inputs. The minimum-wage appears to have its greatest disemployment effects among blacks and teenagers, moreover, and those are two of the groups with the highest unemployment rates. 

True, the reduction of the minimum wage would reduce some incomes by increasing the supply of labor, and reduced incomes would result in reduced consumption which could in turn reduce production and therefore employment. But this effect would probably be offset by the effect of lower labor costs in stimulating production. 

The Fair Labor Standards Act, which imposes the federal minimum wage, also requires that overtime wages be at least 50 percent higher than the employer’s normal hourly wage for the workers asked to work overtime. The reason for the rule (a Depression measure) is to discourage overtime and thus spread the available work among more employees. If this is the effect, it is an argument for making the overtime wage an even higher percentage of the normal wage than the current 150 percent. The counterargument is that regular pay would fall to compensate an increase in the overtime wage, so employers would not hire additional workers. 

A simple way to stimulate employment would be suspension of the Davis-Bacon Act, which requires federal government contractors to pay “prevailing wages” often tied to inflated union-negotiated pay scales. And along with that, reversal of efforts by the Democratic-controlled National Labor Relations Board to encourage unionization, which by driving up wages reduces the demand for labor. Unionization also reduces the efficiency with which labor is employed by imposing the restrictions typically found in collective bargaining contracts, such as requiring that layoffs be in reverse order of seniority and limiting employers’ authority to switch workers between jobs. 

Unemployment benefits, which normally last for only six months, have been progressively extended during the current depression (I do not accept the proposition that the financial crisis of 2008 merely triggered a “recession”  that ended two years ago when GDP stopped falling in nominal terms) to almost two years. The longer the benefits period (and the higher the benefits), the slower are unemployed workers to obtain new employment; and the longer they are out of work the less likely they are ever to return to work, because their work skills and attitudes erode over time. With so many two-income households nowadays, the decision of one spouse to give up on looking for a market job and instead becoming a full-time household producer (“housewife” or “house husband”) becomes an attractive option. 

Cuts in the size of unemployment benefits, and of other subsidy programs attractive to the unemployed, such as food stamps and Medicaid, would similarly encourage greater job search by unemployed persons. 

A recent study by the economist Steve Davis, and his colleagues, finds that the vigor of job search by the unemployed is currently much lower than in previous economic downturns, though this may be due in part to realistic pessimism about the possibility of finding work. 

All these measures would be costless to the government. A new stimulus (that is, deficit spending intended to stimulate the economy) would not be, but if well designed and implemented (tremendous ifs!) could be effective in increasing employment, and if so pay for itself. This is the Keynesian remedy, which has become discredited not because it is unsound but because the $800 billion-plus stimulus enacted in February 2009 was so poorly designed and implemented. (And because of the disastrous prediction by Christina Romer, the incoming chairwoman of the Council of Economic Advisers, in January 2009 that without a stimulus the unemployment rate might rise above 8 percent. It rose to 10 percent. and now is above 9 percent, with the stimulus. What made the prediction reckless, as well as politically disastrous when it turned out to be false, was that no one could predict in January 2009 what the unemployment rate would be at any date in the future.) 

Much of the stimulus consisted of transfer payments to individuals, for example in the form of tax credits. Such transfers are not effective in stimulating employment. They are transitory boosts in income and a large percentage of such boosts is saved rather than spent and what is spent has only an indirect future impact on employment: a slight rise in consumer spending may have negligible effects on production if sellers have a lot of inventory, and even if they increase production they may do so by squeezing more work out of their existing workforce rather than by hiring additional workers.

A more intelligent part of the stimulus was the transfers to state governments. They enabled the states that were on the brink of insolvency and may therefore have had difficulty borrowing to retain a number of teachers and other public employees whom they would otherwise have had to lay off. The transfers thus forestalled an increase in unemployment. 

Best of all—and the core of Keynesian depression remedies—was—in theory—the modest part of the stimulus allocated for public works, particularly road building and –repair and other construction-related projects (such as insulating houses, and painting and otherwise refurbishing public buildings). Because of the collapse of the housing market, unemployment was (and remains) very high among construction workers. If the government hires construction companies for new projects, the effect on the employment of construction workers should be positive and immediate. 

But here is where failure of implementation was critical. Although American roads, bridges, and other infrastructure are in poor shape, the government proved incapable of launching new construction projects in timely fashion. For rather than placing a tough-minded, experienced business executive in charge and telling him to cut through bureaucratic red tape (as the Administration had done successfully with regard to the government takeover of General Motors and Chrysler), the President placed the Vice President in charge of administering the stimulus. He had neither the time nor the business and managerial background required for such an assignment, or the interest or temperament 

Nevertheless the stimulus doubtless had some positive effect on employment, since it did inject more than $800 billion into the economy in a short period, most of which would otherwise have remained in rather inert savings. But as with many issues in macroeconomics this one cannot be resolved with any confidence. But if government expenditures were reduced in ways that did not significantly increase unemployment, and the savings allocated to a stimulus program focused entirely on creating labor-intensive public projects promptly implemented, there would be a positive effect on employment with no net increase in government spending.  

But all these are pipe dreams, because of the politics of U.S. economic policy. The government is likely to do anything to stimulate employment. Eventually the economy will recover on its own, as consumers dissave and thus increase consumption, and with the increased consumption will come increased production and hence increased employment.

By:  LORI ANN LaROCCO, CNBC, JULY 28, 2011

The markets will be watching the vote on Speaker Boehner's bill in the House this afternoon. Congressional sources tell me there are GOP members afraid of being "Primaried" if they vote in favor of raising the debt ceiling.

Many of my contacts are telling me they fear many of the members do not understand the ramifications of their inaction and this political game of chicken they are playing. To get the C-Suite perspective I asked John Allison, former Chairman and CEO of BB&T Corporation and Distinguished Professor of Practice at the Wake Forest University School of Business, for his take on this crisis of confidence.

LL: What is your opinion of the debt ceiling/deficit reduction talks going on in Washington?

JA: The debt ceiling crisis is primarily the responsibility of President Obama.  As Harry Truman so aptly commented; “The buck stops here.”  It is the President’s responsibility to lead a bipartisan solution to solve this basic operational issue, not to advance his ideology or to politicize the process.

He had the opportunity to do so based on the excellent work done by his appointed commission headed by Erskine Bowles.  If he had aggressively pursued the plan offered by the Bowles team, which he created, the Republicans would have had to follow (although there would still have been a debate).

LL: Do you have confidence in Congress in terms of them understanding what their inaction would mean to the U.S. economy?

JA: The tea party element in Congress believes that unless government spending is radically reduced, the U. S. faces a real financial crisis in the next 15 to 20 years.  Unfortunately, they are correct.

Unless entitlement costs are brought under control, the U. S. will not be able to service its debts.  Government spending as a percentage of GDP is the highest in history (except during world wars).

However, the debt limit is probably the wrong place to fight this fight.  They probably should have avoided creating this somewhat artificial crisis and fought for significant reduction in government spending in the budgeting process.

LL: If the U. S. is downgraded that impacts the lending of all Americans and the expected downgrade of some 7,000 municipalities which could lead to more layoffs.  Do you think this downgrade could be a contributing catalyst to a double dip recession?

JA: We already have a very slow recovery driven by extremely poor government policy decisions.  Reducing spending and eliminating the risk of substantial tax increases will improve the economy.

It is important to recognize that the down grade is not fundamentally based on the debt ceiling issue.  The credit rating agencies are focused on the long term deficits faced by the U. S. government.  Raising the debt limit may (or may not) help in the short term.  However, if federal government spending and deficits are not reduced U. S. government debt will be downgraded and rightly so.  The government will ultimately default on some of its obligations unless spending is brought under control.

LL: Is corporate America prepared for a downgrade?

JA: Corporate America is fundamentally concerned about the financial instability of the U. S. government and the very destructive regulatory environment, which is why businesses are holding so much excess cash.  It is impossible for a business to be fully prepared for a downgrade, but CEO’s see the government deficit problem, and out of control spending as far deeper than the debt limit fight. 

By: DANIEL INDIVIGLIO, THE ATLANTIC, AUGUST 4, 2011

Now that the debt ceiling debate is finally over, the Obama administration has "pivoted" to jobs. Of course, the unemployment problem is hardly a new one at this point. Lots of ideas are already out there. Let's consider those the administration is currently said to be considering. Would they help, and are they politically feasible?    

Hiring Tax Credit    

One proposal would give companies a tax credit to hire unemployed workers. This is not a new idea. In fact, a similar proposal became law in March 2010, but it expired at the beginning of this year.    

Pros:  

•    The logic is clear enough. If well-designed, it would encourage hiring unemployed workers. 

Cons: 

•    Obviously, we didn't see an earth-shaking response last year when a similar program was in place. 

•    Many firms will claim the credit for people they would have hired anyway.  

•    Other companies might hire people a little earlier than anticipated just to obtain the credit, only to hire fewer people in the months/years that follow. (Though, this isn't all bad.) 

•    For firms that have no hiring plans, unless the credit is enormous, it won't spur them to suddenly decide to hire. Ultimately, future demand matters most 

Would such a measure get through Congress? It isn't free, which makes it a tough sell in a budget-cutting climate. But Republicans do often like anything that cuts businesses' taxes, so some may be persuaded to go along with it.    

Investments in Domestic Clean/Renewable Energy    
 

Wind power would reportedly be the major target. The measure would reportedly include renewing renewable energy tax breaks expiring this year.     
 

Pros:  

•    This is one of those industries poised to grow in future years, so may be a sweet spot for investment. 

Cons:     

•    The industry has very high costs, of both goods and labor, so the money might not go very far to create many jobs. 

•    It is not a direct job creation measure, so there's no guarantee how much it will encourage hiring. 

•    Many jobs will not be shovel-ready, as they'll rely on new contracts.  

•    New hires will often need advanced education or specialized skills, which might make new openings a mismatch for most unemployed Americans. 

Again, this one will require spending, which might doom its chances. Moreover, many Republicans tend not to be too crazy about renewable energy spending, so getting their support could be tough.    

Renting Out Foreclosures     

Instead of selling foreclosures at depressed prices (or possibly donating them for bulldozing), Fannie Mae and Freddie Mac would rent them out.    

Pros:  

•    This would help slow housing market inventory growth, which may slow price declines

Cons:  

•    It's unclear how this would create jobs, other than very indirectly by trying to aid the housing sector. 

•    But would it really? Investors purchasing these at distressed prices would do the same thing. Assuming there's a finite number of renters, then if the government is renting out houses, investors will purchase fewer to rent out and housing inventory would not decline any quicker than it otherwise would have. So the biggest difference here is that the losses for Fannie and Freddie would be delayed through this proposal.  

•    Moreover, if investors purchased these at a discount instead, they would more likely put work into some so they could charge higher rent, which would create renovation jobs. 

The good news is that this proposal wouldn't require any additional spending. It would just require the will of Fannie and Freddie to sign on, which is not a guarantee. The Obama administration can't force them to go along.     

Is This All We've Got?    

These are the ideas that the Washington Post says are on the table. The above analysis should make pretty clear that these ideas all have quite a few cons and all could run into political difficulties. None of them would create millions of jobs. If the administration really wants firms to hire more aggressively, let's hope it will consider other ideas other there as well.  
 

By Mike Dorning, Bloomberg, August 10, 2011

President Barack Obama’s latest campaign for a jobs agenda faces Republican opposition in Congress and may offer limited potential for short-term employment growth even where partisan agreement is within reach.   

In an Aug. 8 White House address on the Standard & Poor’s downgrade of the U.S. credit rating, Obama highlighted his renewed focus on employment, calling jobs and the economy “the most immediate concern of most Americans”  and investors.  

That concern was underlined yesterday when the Federal Reserve pledged to keep its benchmark interest rate at a record low at least through mid-2013 in a bid to revive the recovery, citing in part a “deterioration in overall labor market conditions” in recent months. That means Obama will be seeking re-election at a time of projected sluggish growth.   

To spur hiring, the White House is considering new proposals such as incentives for employers to hire workers, including a cut in the payroll tax for employers, said a person familiar with the discussions. One idea being examined to bolster the housing market would be to rent rather than sell foreclosed properties held by government-sponsored mortgage lenders Fannie Mae and Freddie Mac, the person said.   

The administration is also looking at a familiar set of plans: renewal of a two-percentage-point cut in the employee- paid portion of the payroll tax and extended unemployment benefits, which are both scheduled to expire on Dec. 31; establishment of an infrastructure bank to fund public works spending; ratification of free-trade deals; and overhauling patent law.   

Bus Tour  

Obama plans to kick off the jobs discussion during a three- day bus tour through the Midwestern states of Minnesota, Iowa and Illinois, beginning on Aug. 15. He will hear from “rural leaders from across the nation to discuss the importance of growing small businesses,” according to a White House description of a scheduled stop in Peosta, Iowa.   

Peosta is in Iowa’s First Congressional District, which has three major employers and an unemployment rate of 6 percent, according to Bloomberg Government. Nationally, the unemployment rate in July was 9.1 percent and is forecast to be 8 percent in the final quarter of 2012 when Obama faces re-election, according to a Bloomberg survey last month of economists.    

Whether that rate can be driven down further and faster with the remedies recommended by the White House, remains a point of debate. The Labor Department said yesterday the productivity of U.S. workers dropped from April through June for the second consecutive quarter, leading to an increase in labor costs that may discourage companies from hiring.    

Infrastructure Spending    

A new patent law is “realistic”  because differences within Congress holding up the legislation can be resolved, said Clint Stretch, managing principal of tax policy at Deloitte Tax LLP in Washington. The administration’s bid to pass trade accords with South Korea, Colombia and Panama also may succeed if the White House and congressional Republicans can end a standoff over providing aid for workers who lose their jobs.   

Yet a new infrastructure program and renewal of the extended unemployment benefits and the payroll tax cut for workers will be greeted with Republican opposition, he said.    

“You almost have to ask: Didn’t the president get the memo?” Stretch said. “They fundamentally disagree about the role of government. The Republicans believe the best way to create jobs is to get the government out of the way.”     

The two top U.S. House Republicans underscored that point in responding to Obama’s White House remarks, saying government spending and regulations are the main barriers to job creation.   

House Speaker John Boehner of Ohio said in an Aug. 8 statement that the answer is to provide “economic certainty and creating an environment in which businesses can invest and jobs can flourish.”    

‘Less Government’   

Majority Leader Eric Cantor of Virginia said House Republican leaders are preparing a package of legislation to be voted on this fall that would “reduce or eliminate regulatory barriers to job creation.”   

Americans “want to see less government -- not more taxes,” Cantor said.   

Gus Faucher, director of macroeconomics at Moody’s Analytics, said that, while the politics aren’t on the side of infrastructure spending, it may be the most effective program for creating jobs.     

“It makes sense to invest in infrastructure for three reasons,” Faucher said. It would employ people who would then “go out and spend. It’s cheap; interest rates are incredibly low; and it improves productivity and growth in the long run.”    

Payroll Tax Cut  

Extending the payroll tax cut could be difficult for the White House. Congressional Republicans only went along with the employee payroll tax cut and the renewal of extended unemployment benefits this year in return for Obama’s agreement to a two-year extension of the Bush tax cuts for the wealthy, Stretch said.   

In his Aug. 8 remarks, Obama said, if lawmakers failed to extend both the tax cut and unemployment benefits, “it could mean 1 million fewer jobs and half a percent less growth.”   

Michael Feroli, chief U.S. economist for JPMorgan Chase & Co., estimated in a note to clients that, along with the windup of Obama’s economic-stimulus program, the expiration of the payroll tax cut and extended jobless benefits will reduce next year’s U.S. economic growth by 1.5 percentage points.     

Gene Sperling, director of Obama’s National Economic Council, told Bloomberg Television yesterday the payroll tax-cut holiday should be extended through 2012 “at a minimum.”     

“The best signal we can have to the people, to markets, is that we are willing to take aggressive bipartisan action on job growth and spurring our economy in the short term, but in the same context in which we are also signaling that we are going to get control of our long-term fiscal situation,” Sperling said.   

Change the Atmosphere    

Representative Rob Andrews, a New Jersey Democrat, said Obama has a chance to build enough public support for his jobs plan to alter the political atmosphere and win passage. The policies could be included in a larger deficit deal when the bipartisan committee established under the debt-limit law issues its report on debt reduction in November, he said.  

As local governments lay off teachers, police officers and firefighters because of fiscal constraints, “people will see what the mantra ‘spending cuts create jobs’  really means,” Andrews said.    

“Let’s see what the environment looks like in November,'' Andrews said. ``If he does an effective job in August, September, October framing this as action versus inaction, he’ll get this.”    

To contact the reporter on this story: Mike Dorning in Washington at mdorning@bloomberg.net    

By Brian Williams, National Center for Policy Analysis, August 12, 2011

The U.S. government's inability to arrive at a responsible debt solution invited Standard and Poor's downgrade and the market's biggest plunge since 2008. By refusing to take serious strides toward fiscal restraint, our leaders have shaken the American economy to its roots and compromised the nation's fiscal credibility. 

Instead of focusing on criticizing and the controversy over the downgrade, I wish our leaders would focus on how to improve the economy. Just how can the economy be fixed? One obvious way is job creation. So, what are some ways our leaders could foster that? The NCPA has published a new Congressional Brief called "Why Aren't Companies Hiring?" Summarizing key facts and policy recommendations in an at-a-glance format, the publication pinpoints the real culprits behind the tough job market: taxes, health reform costs, regulations, and trade restrictions. The NCPA offers practical public policy changes to reduce these barriers and spur job growth.

By Bernie Becker, The Hill, August 12, 2011

Small-business owners are not exactly bullish on the state of the economy, Gallup has found. (Link to poll- http://bit.ly/plpqQz)  

The polling company reports, in a Friday release, that small companies now have less confidence that they will add jobs or that revenues will increase over the next year.   

All that said, the Wells Fargo-Gallup Small Business Index stayed at zero in July, meaning owners were basically neutral on the state of the economy.  

The findings come amid a string of reports that economic growth has slowed and that Americans are pessimistic it will bounce back soon.  

In all, 42 percent of owners said they expected revenues to increase over the next year, down 12 percentage points from January.  

And 16 percent said they believed they would add staff in that time frame, a drop from 23 percent six months ago.  

Eighteen percent of owners believe their revenue will decrease, and 12 percent think they will have to shed employees.  

According to Gallup, small-business owners and consumers have had essentially the same thought process in recent months — an uptick of confidence in May that was rolled back in June and July.  

The polling company was also skeptical that the Federal Open Market Committee’s recent decision to keep interest rates low for the next two years would substantially spur consumer demand or business hiring.

By The Wall Street Journal, Review & Outlook, August 13, 2011

The National Association of Manufacturers asked its members last month how the National Labor Relations Board's decision against Boeing's Sourth Carolina plant case is affecting their decision-making. Some 60% said the government's case already has—or could—hurt hiring. Sixty-nine percent said the case would damage job growth. And 49% said capital expenditure plans "have been or may be impacted by the NLRB's complaint." Around 1,000 of the association's 11,000 members contributed to the survey. That's a lot of lost jobs. 

Some might dismiss these results as self-interested, or predictable given the general business distaste for regulation. But that ignores the role that confidence plays in reviving the animal spirits essential for economic growth. When CEOs or entrepreneurs fear political intervention that might impose higher costs, they are more reluctant to invest or to hire new employees. That's especially true when the economy is already growing slowly, or emerging from recession. 

The NLRB's assault on Boeing has been especially damaging because it violates what most Americans consider to be a core tenet of U.S. capitalism—the ability to move capital or business where you think it has the best chance of success. Boeing's executives are being punished for remarks they made long ago about strikes at their Washington plants. 

Boeing is challenging the NLRB's complaint and may ultimately win in a federal court. But that could take months, and in the meantime executives across America are wondering what happens if the NLRB wins. Will their new plant in a "right to work" state be targeted next? Will their union drive a harder bargain knowing that the NLRB is ready to pounce on one unscripted CEO remark? 

In a now-famous meeting last year with then White House budget direct Peter Orszag, CEOs from the Business Roundtable complained about the costs of regulation. Give me examples, Mr. Orszag said, and the BRT followed up with a 54-page list. A measure of the Administration's responsiveness is that the NLRB launched its assault on Boeing after the BRT provided those examples, and President Obama has refused to say a word of reproach to the agency. This is how you get economic growth of 0.8%.

By Jessica Smith, NPR, August 15, 2011

Every business starts small. But more than ever, it's harder to turn small businesses into bigger companies that employ more people. In a country that desperately needs more jobs, this is a big problem.    

Small firms represent about 99 percent of all U.S. businesses, but a study by the Ewing Marion Kauffman Foundation shows that while businesses are being formed at roughly the same rate as in the past — the number of startups is even rising — these small businesses create fewer jobs than in the past.    

The study found that in the 1980s, startups created an average of 3.5 percent of all U.S. jobs, but in the 2000s, they contributed only 2.6 percent of U.S. jobs.    

Since the financial crisis, banks have all but stopped lending to small businesses. Tighter credit means it's also harder for entrepreneurs to borrow against their credit cards, or their homes, as they've done in the past. But many challenges facing small business owners started before the recession.    

What Is A Small Business? 

• A small business is defined as an independent business having fewer than 500 employees. 
• Small firms employ about half of all private sector employees and pay about 43 percent of total U.S. private payroll. 
• Seven out of 10 small firms last at least two years, about one-half survive five years and one-quarter stay in business 15 years or more. 
• In mid-2010, commercial banks began to ease the tight lending conditions on small businesses that had begun in early 2007. 

Barriers To Expansion    

In a series of stories, Morning Edition goes inside five small businesses whose owners are struggling to expand and face a variety of barriers.    

For Daphne Wilson, the CEO of the Zoe Engineering, in Milwaukee, Wis., the issue is credit. She wants to hire more people but banks won't give her the loans. Banks have also rejected Native American Natural Foods, a foodmaker located on South Dakota's Pine Ridge Reservation, despite the fact that the company has plenty of orders coming in. "We literally went to every single lender in Western South Dakota that would talk to us," co-founder Mark Tilsen says. "I think we met with 11 banks and none of them would even submit the application."    

For John Natuzzi Jr., the battle is big competition. He took over the family business, Natuzzi Bros Ice Co. in Queens, N.Y. He wants to grow the business, but he's up against industry giants who've locked up sales to big supermarkets.    

Regulation can also be a barrier. In Washington state, Precision Iron Works founder Steve Leighton has to pay state-mandated wages on big public works projects like schools. That makes it hard to compete with some out-of-state bidders. Leighton says the wages can be $10 an hour more. "There is no way to make that up," he says.    

And, despite the high unemployment rate, many companies face the ironic problem of being unable to find qualified workers. That's the case with Hamilton Farm Bureau, an agribusiness located in Traverse City, Mich.    

Pile on the complexity of providing health care for workers, and tax and accounting issues, and running a small business seems more daunting than ever.    

But many entrepreneurs don't have a choice — running their own business is in their blood and part of their identity. The challenge now is figuring out how to use that entrepreneurial passion to create more jobs.

By Emily Maltby, Wall Street Journal (Blog), August 17, 2011

A government initiative aimed at spurring small-business lending has barely gotten off the ground – with just over a month before the program expires.    

Last September, Congress passed legislation that created a $30 billion lending fund for community banks. The idea was that the banks could tap the fund to boost lending to small businesses.    

In a letter sent to the Federal Reserve last week, the Independent Community Bankers of America, a Washington lobbying group, urged for a speedier roll out of the funds. The Treasury has disbursed only $590 million, according to the letter.    

The Small-Business Lending Fund has had a bumpy ride from the start. Bankers were wary about taking the funds from the get-go. Less than 900 community banks of the eligible 7,700 banks ultimately applied, requesting $11.6 billion of the $30 billion available. The Treasury began approving applications in July, less than three months before the program is set to expire, on September 27. Since then, the approval process has been moving glacially.    

In its letter, the ICBA said that the Federal Reserve is holding up the process. The Fed, which regulates the banks, has to evaluate whether the applicants will be able to pay dividends to the Treasury on the funds they take. Community banks have reported to the ICBA that the Fed “is simply refusing to address the dividend waivers,” according to the letter.    

UPDATE: The Treasury today announced the approval of an additional 37 banks, bringing the total disbursed funds to about $1 billion. In the statement, the Treasury said funding will be made on a rolling basis in the weeks ahead.

By Richard Rahn, The Washington Times, Monday, August 22, 2011 

It is widely recognized that excessive regulation is unnecessarily killing jobs. The question has been what to do about it. President Obama may inadvertently have helped lead to a solution in his debate last week with an Iowa farmer who was complaining about excessive costly regulation. In his reply to the farmer, Mr. Obama said: "[A] lot of times we are going to be applying common sense. If someone has an idea, if we don't think it's a good idea, if we don't think there is more benefit than cost to it, we are not going to do it." Nice statement, but it is untrue in all too many cases, whether the president knows it or not.  

The president previously has endorsed the concept of cost-benefit analysis in regard to regulation and even has issued an executive order, as other presidents have done, to require executive departments to do cost-benefit analyses on regulations that would have a "major" (often defined as costing more than $100 million) impact. Officials often just ignore the requirement to do cost-benefit analyses with excuses such as that the regulation is not "major" (which they cannot know without doing the analysis) or that they don't have the time to do it, etc. etc. The president suggested to the farmer that he talk to the Department of Agriculture about his complaint, but reporters who tried to contact the department about the farmer's grievance got the same bureaucratic runaround and buck-passing that is characteristic of government - good luck, Mr. farmer.  

Now the president is telling us he is trying to do everything possible to create jobs. Members of his administration have acknowledged that regulations that do not meet a cost-benefit test cost jobs - as everyone with a basic understanding of economics realizes.  

We also know from decades of experience and "public choice" theory that the regulatory agencies are unlikely to clean up their acts because they have vested interests in creating more regulations to administer - the economy be damned. Many of the cost-benefit studies that are done by these regulatory agencies are little more than jokes, with grossly incomplete and incompetent analyses. Cass Sunstein, who claims to be in favor of cost-benefit analysis, is Mr. Obama's regulatory czar. But action - or inaction - speaks louder than words. Some agencies, such as the Internal Revenue Service and Treasury, often just refuse to do serious cost-benefit analysis, yet their rulings often cost hundreds of billions of dollars and hundreds of thousands of jobs.  

Nancy A. Nord, a member of the U.S. Consumer Product Safety Commission (CPSC), has lists of many businesses that have been needlessly destroyed by the failure of her commission to do proper cost-benefit analysis. She has written that "these are real people who have lost real jobs and who are being forced to pay more for products with no real safety benefit."  

There is a solution. First, as a matter of law, Congress should pass a requirement that before any regulation (not just major ones) is promulgated by any government department (including the IRS) or independent agency, the department or agency must have done a competent, complete and independent cost-benefit study. In order to make the law self-enforcing so it is not just ignored, any party or collection of parties who were adversely affected by the regulation would be allowed to bring suit to have it overturned if they could show that the costs of the regulation exceed its benefit (i.e., the preponderance of evidence). If the plaintiffs win, they would be entitled to have both their legal costs and the costs of their cost-benefit study reimbursed by the agency that issued the faulty regulation. Currently, in some limited circumstances, affected parties may bring suit to overturn destructive regulations. The U.S. Court of Appeals for the D.C. Circuit just struck down the Security and Exchange Commission's "proxy access rule," with Judge Douglas H. Ginsburg's devastating critique of the incompetent cost-benefit analysis by the SEC.  

Despite these limited successes, the goal is to re-establish balance by making it much easier for those injured by regulations that do not meet a reasonable cost-benefit test to obtain redress. Frivolous suits should not be much of a problem because the plaintiffs would have to go to the considerable expense of funding a competent cost-benefit study and showing before going to court that the government's study was either nonexistent or flawed. One of the founding fathers of the field of law and economics, Henry G. Manne, dean emeritus of the George Mason University Law School, said he expects that my proposed solution would result in significantly more litigation; even so, he said he thinks it probably is well worth doing. Eventually, the regulatory agencies will realize that excessive regulation is costly to them, and thus they will become more responsible. 

Again, the president said he is for cost-benefit analyses for regulations, and he also has said we must create more jobs. Republicans in Congress are searching for their own ways to create jobs, so requiring cost-benefit analyses for regulations should have great popular appeal. If properly drafted and explained, the requirement would be difficult for the president and the Democrats in Congress to oppose. If they are smart, they even could take credit for signing it into law.  

By Joe Nocera, Columnist, New York Times, August 23, 2011

Lashes out at President Obama because the National Labor Relations Board is trying to block the Boeing Dreamliner from being built in South Carolina: "The South Carolina facility is a hedge against the possibility that Boeing's union work force will shut down production of the Dreamliner. And it's a perfectly legitimate hedge, at least under the rules that the business thought it was operating under. That is what is so jarring about this case - and not just for Boeing. Without any warning, the rules have changed. Uncertainty has replaced certainty. Other companies have to start wondering what other rules could soon change. It becomes a reason to hold back on hiring." http://nyti.ms/nABuXe 

By Philip Rucker, Published: August 25

CLAREMONT, N.H. — Mitt Romney is campaigning to be the jobs president, and for now, that means a lot of listening.  

Listening at board table after board table to his invited attendees bemoan what’s wrong with the federal government.  

Invariably, they tell Romney to cut taxes and do away with Dodd-Frank financial regulations, environmental restrictions and President Obama’s health-care law. As the conversation moved around a stately room here Wednesday, Romney first heard from a community bank chief executive. Then an optometrist. Then another community bank chief executive, a fly-fishing company owner, an auto-repair shop owner, a gun-manufacturing executive, a restaurant owner and a cabinet company owner.  

By the time the 50-minute session was over, Romney hadn’t heard from anyone who is unemployed, underemployed or simply clocks in for a working wage every day.  

The scene isn’t much different with the other leading Republican candidates. The politicians hoping to replace President Obama are crafting jobs plans based in part on what they hear from the American people, but these sessions raise an important question: which American people are they listening to?  

Republican strategist Ron Bonjean, who is neutral in the race, said no candidate so far “truly identifies with the woes and has channeled the anxieties of voters.”  

The contenders in the GOP field appear to be spending most of their time with those they think could be the solution to the country’s economic hardship (business owners) rather than those who are most directly experiencing the hardship (people out of work).  

To be sure, they all interact with a cross-section of the public when they visit diners, stroll along downtown Main Streets or host town hall meetings.  

But in their most intimate campaign settings, when they actually chew over economic policy and solicit comments rather than questions, the candidates usually hear from the employers, not the workers.  

It’s not as if the candidates are trying to hide their bias. To them, job growth starts with loosening government regulations that, as Texas Gov. Rick Perry recently put it, “are strangling this country’s entrepreneurs.”  

“I am a pro-business governor and I don’t make any apologies to anybody about it,” Perry told a breakfast crowd last week in Florence, S.C. “I’m going to be a pro-business president and I won’t make any apologies about it.”  

This is a well-received feature in Romney’s stump speech, too.  

“I believe in free enterprise and capitalism,” Romney said Wednesday at a town hall meeting in Keene, N.H. “I know there are people that don’t like business. I like business.” 

Given the deep-seated economic anxiety across the country, they may need to do more than just be pro-business. “Every Republican is trying to find the silver bullet on job creation,”  Bonjean said. “They need to talk to business leaders, but .?.?. now what they have to do is have Main Street conversations with people who have been laid off.” 

Rep. Michele Bachmann (R-Minn.) has done relatively few sessions about the economy. Former Utah governor Jon Huntsman Jr. has toured several manufacturing facilities. At his business roundtable sessions, attendees have said they feel overregulated, overtaxed and uncertain about how the health-care overhaul will affect their profit margins.  

Romney has sprinkled some events with struggling Americans throughout his itinerary. In April, before he was an official candidate, Romney toured a neighborhood outside of Las Vegas with an unusually high foreclosure rate. Twice this spring, he met with groups of college students worried about getting a job. He visited the emptied-out office of Packy Campbell’s New Hampshire real estate firm, which during the recession downsized from 35 employees to just Campbell and his wife.   

And in June, Romney met with a group of unemployed people at a Tampa coffee shop, telling them, “I wish I had a job for everybody.” It was there that he joked about his own predicament, saying: “I’m also unemployed.”   

But it’s the “business roundtable” that has become a staple of Romney’s summer schedule. 

Around the table Wednesday in Claremont, when his turn came, Tom Sullivan, vice president of operations at gun manufacturer Sturm Ruger, said his company employs 900 people in New Hampshire. “Fortunately,” he said, “business has been great for us.” But he complained that the costs of health care are rising too fast.  

“Insurance companies are broken,” Sullivan told Romney. “We need tort reform because that’s what’s driving a lot of the increased cost for physicians, the hospitals — and, like you said, we need to introduce competition one way or another so that when I go shopping for medical care, I can make a good decision.”  

At that, Romney said, “I totally agree.”  

“Gave my speech,” Romney said, gesturing as if he were getting up from his chair. “Let’s go.”  

The bankers and business owners sitting around the table laughed. And Romney soon turned to hear from the next person down the line, a local restaurant owner. 

By Lydia Saad, Gallup, August 31, 2011

PRINCETON, NJ -- American workers' concerns about various job-related cutbacks have returned to the record highs seen in 2009, after improving slightly in 2010. In terms of the most significant employment risk measured, 3 in 10 workers currently say they are worried they could soon be laid off, similar to the 31% seen in August 2009 but double the level recorded in August 2008 and for several years prior.

Separately, 30% of workers say they are worried their hours will soon be cut back, and 33% worry their wages will be reduced. An even larger number, 44%, worry their benefits will be reduced, making this the most prevalent job-related concern.

Workers are least likely to be concerned that their company will move jobs overseas; however, at 13%, this is by one percentage point the highest level of concern since Gallup began measuring it in 2003. Most of the five items tested are at or near record highs this year. 

The new findings are from Gallup's 2011 Work and Education poll, conducted each August. This year's update was conducted Aug. 11-14 and is based on nationally representative telephone interviews with 489 adults currently employed full or part time. 

The extent of worry about job-related cutbacks is closely related to household income. Adults in households earning less than $50,000 are about twice as likely as those making $75,000 or more to be worried about being laid off, having their hours reduced, and seeing their company move jobs overseas. They are also somewhat more likely to be worried about reduced wages and benefits.

Similarly, workers with no college education are typically more likely than those with either some college education or a college degree to be worried about these negative job prospects. 

Bottom Line  

With the U.S. unemployment rate running 50% higher than it was in 2008 (approximately 9% today vs. 6% then), American workers are again expressing record- or near-record-high levels of concern about the stability of their jobs and income. This reverses the slight improvement seen a year ago, when U.S. workers' concerns about losing a job, pay, or benefits had abated slightly. The rates of concern are even higher among workers who are the most vulnerable to financial setback -- those with low to moderate incomes.

Together, the findings document the ongoing psychological impact of the country's economic problems on many working Americans and how fragile the economic recovery is in their eyes. When workers are worried about their jobs and their income more broadly, this is likely to affect broader economic confidence, the housing market, and consumer spending. 

Survey Methods 

Results for this USA Today/Gallup poll are based on telephone interviews conducted Aug. 11-14, 2011, with a random sample of 1,008 adults, aged 18 and older, living in all 50 U.S. states and the District of Columbia. 

For results based on the total sample of national adults, one can say with 95% confidence that the maximum margin of sampling error is ±4 percentage points. 

For results based on the sample of 489 adults employed full-or part-time, one can say with 95% confidence that the maximum margin of sampling error is ±6 percentage points.

Interviews are conducted with respondents on landline telephones and cellular phones, with interviews conducted in Spanish for respondents who are primarily Spanish-speaking. Each sample includes a minimum quota of 400 cell phone respondents and 600 landline respondents per 1,000 national adults, with additional minimum quotas among landline respondents by region. Landline telephone numbers are chosen at random among listed telephone numbers. Cell phone numbers are selected using random-digit-dial methods. Landline respondents are chosen at random within each household on the basis of which member had the most recent birthday. 

Samples are weighted by gender, age, race, Hispanic ethnicity, education, region, adults in the household, and phone status (cell phone only/landline only/both, cell phone mostly, and having an unlisted landline number). Demographic weighting targets are based on the March 2010 Current Population Survey figures for the aged 18 and older non-institutionalized population living in U.S. telephone households. All reported margins of sampling error include the computed design effects for weighting and sample design.

In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls. 

View methodology, full question results, and trend data.

By Editorial, Published: August 30

PRESIDENT OBAMA and most congressional Republicans agree that the three free-trade agreements between the United States and Colombia, South Korea and Panama would boost U.S. exports and promote U.S. economic growth. Alas, they still have not passed Congress because of partisan politics. 

Mr. Obama was wrong to blame the “refusal by some in Congress to put country ahead of party.” As Republicans point out, he hasn’t even formally submitted the measures to Congress, because the White House wants better guarantees that the GOP won’t water down a related aid bill for trade-displaced workers. But the GOP would be wrong to resist White House needs on this score, since such aid has long been the political price of advancing free trade, whose benefits exceed the program’s costs. This has gone on long enough — and then some. 
 

And yet, some members of Congress are trying to inject another issue: China’s undervalued currency. House Minority Leader Nancy Pelosi (D-Calif.) recently told a labor union gathering that “If you want to bring those trade agreements to the floor of Congress you better be prepared first to let us bring our bill on China’s manipulation of its currency, which is unfair to America’s workers.” In the Senate, too, there is talk of trying to link a bill punishing Chinese currency manipulation to the trade agreements. 
 

China’s undervalued renminbi is a long-standing, bipartisan concern, and it is not a phony one: In pursuit of growth led by exports, China has held the renminbi down in relation to the dollar, rendering its goods artificially cheap in the U.S. market. The renminbi would gain about 20 percent against the dollar if it were allowed to float freely like other currencies, according to the Peterson Institute for International Economics. China’s policy has probably cost Americans hundreds of thousands of jobs and contributed to China’s destabilizing pile of trillions of dollars in reserves. 
 

But is there any practical alternative to the Obama administration’s policy of patient jawboning — which is far from a total failure? In fact, China has allowed its currency to appreciate against the dollar by about 9 percent over the past year. This may respond both to U.S. nudging and to Beijing’s realization that currency manipulation is an increasingly bad deal for China. It’s retarding financial reform, exposing China to the risk of losses on its dollar holdings and — worst of all —  feeding inflation. All of this goes against objectives that China’s communist leaders have vowed to pursue in their next five-year plan, starting in 2012. Indeed, U.S. experts such as economist Martin Feldstein of Harvard have suggested that China could be about to correct the problem itself. 
 

Yet five-year aspirations are one thing; political realities in a one-party state are quite another. A cheap renminbi enriches state enterprise managers and other powerful people in the communist hierarchy. A report on the Chinese economy by the Eurasia Group, a consulting firm, notes that “the country’s leaders lack the political stomach and sense of the moment to implement a comprehensive and ambitious rebalancing agenda.” 
 

Punishing China with tariffs or other sanctions probably wouldn’t lead to a jobs bonanza. More likely, other low-wage countries would fill the void left by China, while Beijing retaliated against the United States, costing American growth and jobs. The last thing an already unstable global economy needs is a U.S.-China trade war.

CONTACT: 866-788-9129 
FOR IMMEDIATE RELEASE

Dallas, TX – Brad Anderson, former CEO of Best Buy Co. and member of the American Institute for Growth, issued the following statement following President Obama’s announcement that his administration is considering seven business regulations that could cost over $1 billion a year:

“Most business leaders know that burdensome government regulation has a paralyzing effect on economic growth. Given how weak our economy is, it’s hard to believe that this Administration is considering new regulations that would add billions in additional costs.

“The American Institute for Growth exists precisely because we believe that the voice of entrepreneurs is not being heard in Washington. That voice is saying very clearly that job creation will continue to stall as long as the federal government keeps increasing the weight of regulations, instead of lessening it. Regulatory costs represent almost 12% of U.S. Gross Domestic Product.”

American Institute for Growth (JCA) is a nonprofit, nonpartisan 501(c)3 organization composed of current and former major CEOs and entrepreneurs whose goal is to defend and preserve the system of free enterprise in the United States for future generations so entrepreneurship can flourish, resulting in job creation.

By Gary S. Becker, The Wall Street Journal, Opinion, Friday, September 2, 2011

The origins of the financial crisis and the Great Recession are widely attributed to "market failure." This refers primarily to the bad loans and excessive risks taken on by banks in the quest to expand their profits. The "Chicago School of Economics" came under sustained attacks from the media and the academy for its analysis of the efficacy of competitive markets. Capitalism itself as a way to organize an economy was widely criticized and said to be in need of radical alteration.  

Although many banks did perform poorly, government behavior also contributed to and prolonged the crisis. The Federal Reserve kept interest rates artificially low in the years leading up to the crisis. Fannie Mae and Freddie Mac, two quasi-government institutions, used strong backing from influential members of Congress to encourage irresponsible mortgages that required little down payment, as well as low interest rates for households with poor credit and low and erratic incomes. Regulators who could have reined in banks instead became cheerleaders for the banks.  

This recession might well have been a deep one even with good government policies, but "government failure" added greatly to its length and severity, including its continuation to the present. In the U.S., these government actions include an almost $1 trillion in federal spending that was supposed to stimulate the economy. Leading government economists, backed up by essentially no evidence, argued that this spending would stimulate the economy by enough to reduce unemployment rates to under 8%.  

Such predictions have been so far off the mark as to be embarrassing. Although definitive studies are not yet available about the stimulus package's overall effects on the American economy, most everyone agrees that it was badly designed and executed. What the stimulus did produce is a sizable expansion of the federal deficit and debt.  

The misdiagnosis of widespread market failure led congressional leaders, after the 2008 election, to propose radical changes in financial institutions and, more generally, much wider regulation and government control of companies and consumer behavior. They proposed higher taxes on upper-income families and businesses, and extensive controls over executive pay, as they bashed "billionaire" businessmen with private planes and expensive lifestyles. These political leaders wanted to reformulate antitrust policies away from efficiency, slow the movement by the U.S. toward freer trade, add many additional regulations in the medical-care sector, levy big taxes on energy emissions, and cut opportunities to drill for oil and other fossil fuels.  

Congress did manage to pass badly designed laws concerning financial markets, consumer protection and medical care. Although regulatory discretion failed leading up to the crisis, Congress nevertheless added to the number and diversity of federal regulations as well as to the discretion of regulators. These laws and the continuing calls for additional regulations and taxes have broadened the uncertainty about the economic environment facing businesses and consumers. This uncertainty decreased the incentives to invest in long-lived producer and consumer goods. Particularly discouraged was the creation of small businesses, which are a major source of new hires.   

The expansion of government resulting from the stimulus and other government programs contributed to rising deficits and growing public debt just when the U.S. faced the prospect of big increases in future debt due to built-in commitments to raise government spending on entitlements. Social Security, Medicaid and Medicare already account for about 40% of total federal government spending, and this share will grow rapidly during the next couple of decades unless major reforms are adopted.  

A reasonably well-functioning government would try to sharply curtail the expected growth in entitlements, but such reform is not part of the budget deal between Congress and President Obama that led to a higher debt ceiling. Nor, given the looming 2012 elections, is such reform likely to be addressed seriously by the congressional panel set up to produce further reductions in federal spending.  

It is a commentary on the extent of government failure that despite the improvements during the past few decades in the mental and physical health of older men and women, no political agreement seems possible on delaying access to Medicare beyond age 65. No means testing (as in Rep. Paul Ryan's budget roadmap) will be introduced to determine eligibility for full Medicare benefits, and most Social Security benefits will continue to start for individuals at age 65 or younger.  

In a nutshell, there is little political will to reduce spending on entitlements by limiting them mainly to persons in need.  

State and local governments also greatly increased their spending as tax revenues rolled in during the good economic times that preceded the collapse in 2008. This spending included extensive commitments to deferred benefits that could not be easily reduced after the recession hit, especially pensions and health-care benefits to retired government workers.  

Unless states like California and Illinois, and cities like Chicago, take drastic steps to reduce their deferred spending, their problems will multiply as this spending grows over time. A few newly elected governors, such as Scott Walker in Wisconsin, have pushed through reforms to curtail the power of unionized state employees. But most other governors have been afraid to take on the unions and their political supporters.  

Numerous examples illustrate government failure in other countries as well. Highly publicized are the troubles facing Greece, Portugal, Ireland, Italy and Spain that are mainly due to the growth in spending and debt of their governments prior to the 2008 crisis. Perhaps the governments of these countries, and the banks that bought their debt, expected Germany and other rich members of the European Union to bail them out if they got into trouble. Whatever the explanation, the reckless behavior by these governments will greatly harm businesses and consumers in their countries along with taxpayers of countries coming to their rescue.  

The traditional case for private competitive markets goes back to Adam Smith (and even earlier writers). It is mainly based on abundant evidence that most of the time competitive markets work quite well, usually much better than government alternatives. The main reason is not that individuals in the private sector are intrinsically better than government bureaucrats and politicians, but rather that competitive pressures discipline market behavior much more effectively than government actions.  

The lesson is that it is crucial to consider whether government regulations and laws are likely to improve rather than worsen the performance of private markets. In an article "Competition and Democracy" published more than 50 years ago, I said "monopoly and other imperfections are at least as important, and perhaps substantially more so, in the political sector as in the marketplace. . . . Does the existence of market imperfections justify government intervention? The answer would be no, if the imperfections in government behavior were greater than those in the market."  

The widespread demand after the financial crisis for radical modifications to capitalism typically paid little attention to whether in fact proposed government substitutes would do better, rather than worse, than markets.  

Government regulations and laws are obviously essential to any well-functioning economy. Still, when the performance of markets is compared systematically to government alternatives, markets usually come out looking pretty darn good.  

Mr. Becker, the 1992 Nobel economics laureate, is professor of economics at the University of Chicago and senior fellow at the Hoover Institution.

By Paul Wiseman and Christopher S. Rugaber, AP Economics Writers

On Friday September 2, 2011 WASHINGTON (AP) - Employers stopped adding jobs in August, an alarming setback - for an economy that has struggled to grow and might be at risk of another recession.  

The government also reported that the unemployment rate remained at 9.1 percent. It was the weakest jobs report since September 2010. 

Stocks tumbled on the news. The Dow Jones industrial average sank more than 200 points in afternoon trading.  

Total payrolls were unchanged in August, the first time since 1945 that the government has reported a net job change of zero. Economists warned that the economy can't keep growing indefinitely if hiring remains stalled. 

"Underlying job growth needs to improve immediately in order to avoid a recession," said HSBC economist Ryan Wang.  

Fears that the United States will slip back into recession have been rising since the government reported over the summer that the economy barely grew in the first half of the year. Consumer and business confidence has been sapped by the political standoff over the federal debt limit, a downgrade in the U.S. government's credit rating and a debt crisis in Europe.  

Job growth had already been sputtering before it stalled completely last month. The economy produced an average 166,000 a month in the first quarter, 105,000 a month in the second quarter and just 28,000 a month so far in the third quarter, said John Silvia, chief economist at Wells Fargo.  

The dispiriting job numbers for August will put more pressure on the Federal Reserve, President Barack Obama and Congress to find ways to stimulate the economy. So far, Fed Chairman Ben Bernanke has been reluctant to try a third round of bond purchases designed to jolt the economy by further lowering long-term interest rates.  

Obama next week will deliver a rare address to a joint session of Congress to introduce a plan for creating jobs and boosting economic growth. He is facing criticism within his own party, particularly from black lawmakers who say he hasn't done enough to help chronic unemployment in black communities.  

The unemployment rate for black men jumped a full percentage point in August to 18 percent. That's the highest level for that group since March 2010. Unemployment for all black people increased from 16.2 percent to 16.7 percent.  

But Obama's unlikely to win support for any stimulus spending from congressional Republicans, who say the president's economic policies have failed. They want deeper spending cuts and less government regulation. 

On Friday, Obama took a step toward winning their support. He directed the Environmental Protection Agency to abandon rules that would have tightened health-based standards for smog. Congressional Republicans and some business leaders have said the proposed rules would have cost jobs.  

The weakness in employment was underscored by revisions to the jobs data for June and July. Collectively, those figures were lowered to show 58,000 fewer jobs added. The downward revisions were all in government jobs.  

The average work week also declined, and hourly earnings fell by 3 cents to $23.09.

"There is no silver lining in this one," said Steve Blitz, senior economist at ITG Investment Research. "It is difficult to walk away from these numbers without the conclusion that the economy is simply grinding to a halt."  

With job creation stalled and wages declining, consumers won't see much gain in incomes. That will limit their ability to spend, which undercuts growth. Consumer spending accounts for about 70 percent of the economy.

"The importance of job growth cannot be overstated," said Joshua Shapiro, chief U.S. economist at MFR Inc.  

The economy needs to add roughly 250,000 jobs a month to rapidly bring down the unemployment rate, which has been above 9 percent in all but two months since May 2009. 

In August, the private sector added 17,000 jobs, the fewest since February 2010. That compares with 156,000 in July and 75,000 in June.  

"The stagnation in US payroll employment is an ominous sign," said Paul Ashworth, an economist at Capital Economics. "The broad message is that even if the US economy doesn't start to contract again, any expansion is going to be very, very modest and fall well short of what would be needed to drive the still elevated unemployment rate lower."

Hiring fell across many different sectors. Manufacturers cut 3,000 jobs, its first decline since October 2010. Construction companies, retailers, and transportation firms also cut workers.  

The health care industry added 30,000 jobs last month. 

The economy expanded at an annual pace of only 0.7 percent in the first six months of the year. That was the slowest six months of growth since the recession officially ended in June 2009.  

In August, consumer confidence fell to its lowest level since April 2009, according to the Conference Board. 

Most economists forecast that growth may improve to about a 2 percent annual rate in the July-September quarter. But that's not fast enough to generate many jobs.  

The Obama administration has estimated that unemployment will average about 9 percent next year, when Obama will run for re-election. The rate was 7.8 percent when Obama took office.  

The White House Office of Management and Budget projects overall growth of only 1.7 percent this year.  

"The economy continues to stagger," said Sung Won Sohn, economist at California State University Channel Islands. "It wouldn't take much (of a) shock to tip it onto a recession."

By Deborah Solomon, Carol E. Lee and Thomas Catan, Wall Street Journal, September 2, 2011

President Barack Obama is expected to use his jobs speech to Congress on Thursday to blunt business and Republican criticism that his administration is engaged in regulatory overreach.  

In the run-up to the speech, Mr. Obama on Friday abandoned a proposed Environmental Protection Agency rule tightening air-quality standards. The administration also says a regulatory review will save businesses more than $10 billion over five years, and it eased offshore drilling restrictions in the Gulf of Mexico and Alaska.  

But the president's pushback has limits. Last week, for example, the federal government sued to block AT&T Corp. from acquiring wireless carrier T-Mobile USA and filed suit against 17 of the world's biggest financial institutions for not adequately disclosing the risks of home loans they sold. The White House also isn't backing away from the Dodd-Frank financial-regulatory overhaul and the health care law.  

Mr. Obama applauded the new financial regulations in a Labor Day speech in Detroit, saying "working folks shouldn't be taken advantage of—so we passed tough financial reform." And he touted a new law to stop pay discrimination and regulations to promote worker safety.  

Mr. Obama may also talk Thursday about giving industry more time to comply with other regulations, including environmental rules that businesses have complained are coming too quickly, according to people familiar with the matter.  

Mr. Obama has made an effort to appeal to business in the second half of his first term after two initial years of frayed relations. The political goal is to show that Mr. Obama is pro-regulation on some key fronts, but is generally friendly to business.  

The U.S. Chamber of Commerce and the Business Roundtable have accused the White House of undercutting the economic recovery by imposing new and onerous regulations.  

Republicans in Congress say they are causing businesses to delay investments and hiring. On Friday, Senate Minority Leader Mitch McConnell (R., Ky.) said the president's reversal on the air-quality rule "alone will prevent more job losses than any speech the president has given."  

Mr. Obama personally said he would jettison the EPA rule that would have reduced smog-forming ozone levels. He said the EPA would consider the rule again in 2013. The decision came after an aggressive industry-led push to oppose the rule, which the EPA estimated would cost as much as $90 billion per year. Chief of Staff William Daley, who was brought in to help smooth relations with business, and Cass Sunstein, who heads the Office of Information and Regulatory Affairs, are said to have been sympathetic to the industry point of view that the rule was unnecessary and could impose too many costs in the midst of a struggling economy, according to people familiar with the matter. Central to their thinking was that EPA is to reconsider ozone standards again in 2013. EPA Administrator Lisa Jackson, who proposed the tighter standard, pushed for its implementation.  

Mr. Obama's decision infuriated many Democrats and environmental groups, who say he sided with polluters over public health. But White House officials say the president has come to agree that regulations such as the EPA rule hurt job growth. Industry-funded studies said the rule would cost millions of jobs.  

On a call Friday with supporters of the rule, a White House official said the EPA is "under unprecedented assault right now" and that Republicans have made the agency "the focus of their efforts." The official referenced a letter from House Majority Leader Eric Cantor of Virginia to GOP members vowing to fight 10 "job-destroying regulations" including seven EPA rules. Some Republican presidential candidates have talked about shuttering the EPA, a line that often draws applause.  

Jared Bernstein, the former top economic adviser to Vice President Joe Biden now at the Center on Budget and Policy Priorities, said Mr. Obama's decision on ozone had little to do with creating jobs. "The president is correctly committed to getting rid of outdated and harmful regulations. But to tie it to jobs and economic growth is misguided," he said  

In other areas, such as antitrust, the administration has had to juggle the competing demands. In 2009, Mr. Obama vowed to "reinvigorate" antitrust enforcement. Since then, the Obama Justice Department has trod a careful middle path. The administration recently stepped-up challenges to mergers, including Nasdaq OMX Group's offer for NYSE Euronext. Even so, it has disappointed some who thought it would more consistently place the interests of consumers above those of big business.The administration has also resisted efforts to unwind financial rules put in place to prevent a repeat of the 2008 financial crisis. Business groups and Republicans have attacked the rules as onerous but the administration has so far defended the Dodd-Frank law and continued to call for swift implementation.  

"The Obama administration has certainly been more aggressive in its merger enforcement than Bush 43," said Melissa Maxman, an antitrust lawyer at Cozen O'Connor law firm in Washington. "But it's come under criticism from consumer and antitrust groups for not being as aggressive as it had promised."

When President Obama makes his “jobs speech,” the American people will see whether he and his advisers have learned anything from the three years of Obamanomics failures.  

Historically, the American economy has been a phenomenal job-creating machine. In a well-functioning economy, the increase in jobs parallels the increase in population. As can be seen in the accompanying table, during eight Reagan years, jobs grew at a much faster rate than did the population, as many disheartened workers re-entered the labor force after the Carter economic fiasco. Almost 17 million new civilian jobs were created from 1981 through 1989, which was 9 million more than can be explained by population growth. 

Likewise, during the Clinton years from 1993 through 2001, 7 million more jobs were created than can be explained by population growth alone.  

But during the presidencies of George H.W. Bush and George W. Bush, job growth did not keep up with population growth. If it had, there would have been approximately 3.7 million more jobs created between 1989 and 1993 and 5.9 million more jobs between 2001 and 2009. The Obama record is far worse. The total number of jobs actually has decreased by 2.6 million since January 2009; if job growth had merely kept up with population growth during that period, there would be 4.8 million additional jobs. At the end of recession, the number of jobs normally grows far faster than population, but not this time.   

The unemployment rate is a flawed measure because during weak economic periods, many discouraged people drop out of the labor force; thus, the labor force/population ratio declines and the real unemployment rate is understated.  

As President Obama searches for solutions to the jobs problem, he ought to look at the policies that worked successfully during the Reagan and Clinton administrations. The Reagan administration sharply reduced marginal tax rates in both the first and second terms, but there was only a small reduction in the tax burden as a percentage of gross domestic product (GDP) - about 1 percent of GDP from 1981 to 1989. However, the job-creating businesspeople knew with great certainty that the tax cost of hiring new workers and investing in new plants and equipment would be going down, not up. They also knew that the administration was serious about applying cost-benefit tests to proposed regulations. In spite of all the talk about reducing government spending, spending as a percentage of GDP did not fall during the first Reagan administration because the cost of the military buildup offset the reductions in domestic spending. Spending as a percentage of GDP dropped 2 full percentage points during Reagan’s second term, which was also the period of the most rapid job growth.  

Government spending dropped during both terms of the Clinton administration, from 21.4 percent of GDP in 1993 to 18.2 percent of GDP in 2001. President Clinton did increase taxes during his first term but signed the reduction in the capital gains tax rate in his second term. However, most have forgotten that the economy had stagnated at the end of the second Clinton term and the economy was in recession in the first quarter of 2001, when George W. Bush took office - well before Sept. 11, 2001. In retrospect, Mr. Clinton should have cut taxes more sharply in his second term.  

The first President Bush abandoned his “flexible freeze” to control spending shortly after taking office and reneged on his “no new taxes pledge,” both of which turned out to be mistakes. The second President Bush did cut tax rates but allowed spending to rise 2 full percentage points of GDP during his two terms.  

The lessons should be obvious to Mr. Obama and his advisers. Increases in government spending are associated with lower - not higher - job creation and vice versa. (This has been true for the 100 years for which there are good records.) Job creators do not hire workers when they fear higher taxes in the future. Temporary tax and spending gimmicks such as infrastructure projects also have proved not to create net new jobs.  

The president should say: “I pledge not to propose any increase in taxes until unemployment is under 5 percent. I promise to come forth with a budget next month that will reduce spending each year, so within four years, it will be no higher than 19 percent of GDP. And I am issuing a freeze on all new regulations, which will remain in effect until each new proposed regulation can be shown to be cost-effective.” That would take him about 30 seconds to say. Most listeners would be happy to turn to the football game, the markets would soar on Friday, businesspeople would start hiring, and the president might even be re-elected.  

Richard W. Rahn is a senior fellow at the Cato Institute and chairman of the Institute for Global Economic Growth

A July 2011 poll of 1,202 likely voters American voters conducted by The Mellman Group and Ayres, McHenry & Associates revealed that voters want Washington to act on jobs, especially in manufacturing, which they believe will help restore America's lost status as the world's number one economy. Despite overwhelming public concern about these issues, fewer voters now believe the president or either party in Congress is focused on jobs than thought so in 2010.   

"This poll is a stark reminder that while official Washington goes back and forth in our newest crisis, Americans still feel no one is focusing on the real problems that matter to them: losing jobs, losing our manufacturing base, and the decline of our position in the world," said Scott Paul, Executive Director of the Alliance for American Manufacturing (AAM).  

The study finds that across the partisan spectrum, Democratic and Republican voters ranked job creation and rebuilding the nation's manufacturing base at the top of their list of priorities. When asked to select the most important task for Congress and the president, "creating new manufacturing jobs" ranked just below creating jobs more generally and saw a bigger gain from 2010 (up 9%) than any other option.  

Americans don't believe that Congress or the president has done enough to support manufacturing. Poll results showed that by a more than two-to-one margin (67% to 29%) voters prefer that Washington focus on job creation rather than deficit reduction. This was down from the 2010 poll where 94% of voters wanted Washington to focus on jobs even more than on the deficit, with 85% specifying creating manufacturing jobs, and 88% of voters wanting Congress and the president to strengthen manufacturing in the U.S.  

Voters are less convinced than a year ago that Congress and the administration are doing anything to create manufacturing jobs or to enforce fair trade. Although manufacturing was again ranked as the most important source of economic strength (by a wide margin over both healthcare and high tech), voters gave both Congress and the president lower marks on creating manufacturing jobs or addressing trade issues than they did in 2010.  

AAM's 2010 poll first demonstrated serious voter concern about factory closings and job loss. In the 2010 poll, there was very little difference in the opinion of Independents, Democrats, and Republicans (64%, 67%, and 66% respectively) on the viewpoint that "manufacturing is a critical part of the American economy and we need a manufacturing base here if this country and our children are to thrive in the future."  

Said Paul, "Voters see manufacturing as the key to recovery, and though it may surprise some pundits, this is the clear message from every voting demographic, including Tea Party and Republican voters."  

Along with manufacturing's rising profile, support for "Made in America" has also skyrocketed since 2010. Pollster Whit Ayres explains, "Americans strongly believe that we cannot be the world's leading economy and job creator without manufacturing. They want to be able to buy top-quality products that say 'Made in America.'"  

The poll also found concern over America's lost standing in the world. Pollster Mark Mellman says, "Americans no longer believe we have the world's strongest economy. But they do believe that a renewed focus on manufacturing jobs can turn things around. Americans understand that manufacturing is central to creating jobs and getting the economy back on track." Some key findings from the poll include:  

• 90% have a favorable view of American manufacturing companies - up 22% from 2010
• 97% have a favorable view of U. S.-made goods - up 5% from 2010
• 94% of voters say creating manufacturing jobs is either "one of the most important" things government can do or "very important."
• 83% have an unfavorable view of companies that go to China to manufacture
• 90% support Buy American policies "to ensure that taxpayer funded government projects use only U. S.-made goods and supplies wherever possible."
• 95% favor keeping "America's trade laws strong and strictly enforced to provide a level playing field for our workers and businesses."
• 59% say we need to "get tough with China and use every possible means to stop their unfair trade practices

Only 50% of voters believe that the president is working to create manufacturing jobs -- an 11% drop from 2010. Congress fares even worse -- 41% say Democrats in Congress are working to create jobs, and 32% see the GOP working to create jobs.   

In an op-ed article, "How Congress can start creating jobs in the U.S," that appeared August 15, 2011 in The Hill, Mr. Paul made the following recommendations of what Congress could do to spur private sector job creation that would not increase our federal budget deficit.  

"Establish a national infrastructure bank to leverage capital for large-scale transportation and energy projects.  

Reshape the tax code in a revenue neutral way to provide incentives for job creation and inward investment. R&D tax credits should help firms that not only innovate in America but also make their products here. Lower tax rates for manufacturing activity in America and eliminate tax shelters for hedge funds or financial transactions that have no real value.  

Apply "buy America" provisions to all federal spending to ensure that American workers and businesses get the first shot at procurement contracts.  

Shift some education investment to rebuilding our vocational and technical skills program, which would address looming shortages in the manufacturing sector.  

Refocus the trade agenda by giving American businesses new tools to counter China's currency manipulation, industrial subsidies, intellectual property theft and barriers to market access.  

Condition new federal loan guarantees for energy projects on the utilization of domestic supply chains for construction.  

In addition, President Obama could do the following on his own immediately:  

Expedite small business loans through the Small Business Administration and Treasury Department to help firms expand, retool and hire.  

Convene a multilateral meeting to address global imbalances and Chinese mercantilism. If China doesn't agree to participate, designate it a currency manipulator. (China ships fully one-third of its exports to the U.S. and finances less than 10 percent of our public debt, so we have more leverage than some might suggest.)  

Secure an additional agreement from all foreign and domestic car companies to increase their levels of domestic content by at least 10 percent over the next three years.   

Direct the Department of Defense to leverage existing procurement to contractors that commit to increasing their domestic content of our military equipment, technology and supplies.   

Approve additional applications for renewable and traditional energy projects, contingent on the use of American materials in construction.  

Kick any CEO off of federal advisory boards or jobs councils who has: (1) not created net new American jobs over the past five years, or (2) is expanding the company's foreign workforce at a faster rate than its domestic workforce. Replace them with CEOs who are committed to investing in America."  

In contrast, Henry Nothhaft, veteran entrepreneur and author of Great Again: Revitalizing America's Entrepreneurial Leadership (Harvard Business Review Press, 2011) had some very different suggestions for President Obama in a Labor Day letter to President Obama published in the Wall Street Journal. Since "100% of net job growth in the U.S. comes from entrepreneurial start-ups." he asked:  

"...why aren't you doing everything you can to nurture start-ups and make it easier for them to access capital, grow and hire people so they can develop the breakthrough products, services and medical advances that drive our national prosperity?   

He urged the president "to seek an exemption for small job-creating start-ups from the more onerous Sarbanes-Oxley rules, at least until they reach $500 million in revenues. This will help to revive the feeble IPO market, and job creation with it."  

He suggested the president and his "Republican opponents could also spur job creation by withdrawing your support for a patent-reform bill that puts the needs of big technology firms ahead of the real job creators -- entrepreneurial start-ups -- and that continues to divert hundreds of millions of dollars annually in patent-office user fees to other purposes ...Congress has starved it of funds and created a backlog of 1.2 million patent applications waiting for examination. Your own patent office director, David Kappos, says this backlog has cost the nation "millions of jobs."  

He questioned "why are we the only major nation on Earth that refuses to offer tax and other incentives to manufacturers who set up shop here? Every other nation in the Organization for Economic Cooperation and Development does so.   

None of the measures suggested by Mr. Paul or Mr.Nothhaft would increase the deficit. They would work to create millions of new jobs quickly. I agree with Mr. Nothhaft -- "Mr. President, there's still time for you to kick-start the engine of job growth. All you need to do is listen to the voices of entrepreneurs who create those jobs."  

By Dan Danner, The Washington Times, September 8, 2011

In another attempt to show he understands the plight of job creators, President Obama appeared before a joint session of Congress to outline a plan to put Americans back to work. And again, he proved he does not understand – or does not want to acknowledge – the biggest problems facing small businesses.

The president does continue to emphasize the important role small businesses play in our economy. He is right on that account. According to government statistics, small businesses create around two-thirds of net new jobs and employ over half of the private sector workforce in this country. But NFIB research shows small business optimism is in recession-level territory, and the president’s pep talk to Congress on Thursday gave small business owners little reason to feel encouraged.

Take the centerpiece of his plan: A new, multi-billion dollar federal stimulus program focused on infrastructure and building. Despite two failed stimulus programs, the president still thinks this is a good idea. Unfortunately, we already know pumping federal cash into construction projects is a Band-Aid approach to job creation that did not work the last time he tried it, and it will not work again. Even with all the evidence against it, the president still seems to think the government can spend its way out of the recession.

The other half of the plan consists of short-term tax breaks for workers and businesses. A payroll tax cut is a welcome help to reduce the cost of running a business, but it is not clear if it will be enough to convince firms to hire. Few businesses are making new investments today due to a lack of customers and an uncertain tax and regulatory environment. If a business owner does not need a new worker, a temporary tax break may not be enough to push them to hire.

The temporary tax cuts outlined in the president’s plan are emblematic of a larger problem with the tax code. Small businesses simply can’t plan with confidence in the current tax environment. Taking the long view is essential for small-business owners to weigh the costs and benefits of investments, such as hiring a new employee. And with the cuts outlined in the president’s plan, business owners know there will be an expiration date. The president avoided discussing meaningful business tax reform in favor of a more short-term approach. This leaves a cloud of uncertainty over small businesses’ plans for the future, especially considering that the president provided few details of how the government will pay for his plans.

In addition to the constant flux of the tax code and the threat of tax increases, the president failed to meaningfully address one of the top issues facing small business. A tidal wave of new regulations is currently bearing down on them from Washington. Over 4,000 new regulations are in the pipeline with no sign that the pace of rulemaking will let up, reflecting a 60 percent increase in major federal regulations since 2005. Last year, pending major regulations jumped 22 percent over the year before. NFIB is leading a new campaign, Small Businesses for Sensible Regulations, to give a strong voice to the small businesses affected by over-regulation, because the scale of the problem seems to be lost on this president.

Small-business owners hoped to hear something bold from the president, but instead heard more of the same. A mixed bag of temporary tax breaks and an ill-advised stimulus program do little to address the problems facing the engine of America’s economy – small businesses. Rather than the retread failed ideas we heard from the president on Thursday, what small businesses want is actually relatively simple. We want government to get out of the way to let us do what we do best: create jobs.

Dan Danner is president of the National Federation of Independent Business.   

Read full article here: http://www.washingtontimes.com/news/2011/sep/8/nfib-speech-not-enough-restore-confidence-job-crea/

By the Wall Street Journal Editorial Board, September 13

What is the cost of overregulation? Bank of America appears to have provided part of the answer by announcing yesterday that the nation's largest bank will cut 30,000 jobs between now and 2014. CEO Brian Moynihan said the bank's plan is to slash $5 billion in annual expenses from its consumer businesses. 

Mr. Moynihan didn't say this, but we will: These layoffs are part of the bill for the last two years of Washington's financial rule-writing. After loose monetary policy had combined with insane housing policy to create a financial crisis, the Democrats who ran Washington in 2009 and 2010 enacted myriad new rules that had nothing to do with easy money or housing. 

Take the amendment that Illinois Democrat and Senator Dick Durbin (with the help of 17 Senate Republicans) attached to last year's Dodd-Frank financial law. Mr. Durbin's amendment instructed the Federal Reserve to limit the amount of "swipe fees" that banks can charge merchants when customers use debit cards. 

How exactly does forcing banks to charge Wal-Mart less money for operating an electronic payment system prevent the next financial crisis? Readers may wait a long time for a satisfactory answer, but the cost of this Dodd-Frank directive is straightforward. 

The Fed dutifully ordered banks to cut their fees almost in half. Bank of America disclosed in its most recent quarterly report that this change will reduce the bank's debit-card revenues by $475 million in just the fourth quarter of this year. The new rules take effect on October 1, so BofA seems to have sensible timing as it begins to shed workers from a consumer business that has become suddenly less profitable by federal edict. 

Make that the latest federal edict. In 2009, when a comprehensive overhaul of financial regulation was still a gleam in Barney Frank's eye, President Obama signed the CARD Act into law. It limited the ability of banks to increase rates on delinquent borrowers and to charge fees on unprofitable customers. As Washington encouraged card issuers to be more selective in advancing credit and to demand higher rates when they do, interest rates on card customers predictably increased relative to other types of lending in the months after the law took effect. 

Restricting bank profits on a particular product may have obvious populist appeal, but politicians shouldn't be surprised if banks decide that such consumer credit operations aren't good businesses and can function with fewer employees. Add in the various federal programs aimed at extracting penalties for this or that mortgage-foreclosure error and it's understandable that a bank would have trouble forecasting growth to justify its current work force. 

To be sure, Bank of America is also suffering from its own mistake in deciding to buy Countrywide Financial in 2008. As for the financial industry generally, it had become distended and needed to shrink after the bubble years of easy money. 

But given the real-world results for bank employees, politicians should not be allowed to pretend that there are no consequences when they deliberately reduce the profitability of employers. Mr. Obama proposed last week to spend some $450 billion more in outlays or tax credits to create more jobs, but it would have cost a lot less to save these 30,000. 

Available online here: http://on.wsj.com/oycRZ5

Courtesy of the House Small Business Committee:   

Highlights of The August NFIB Optimism Index Report:

Sales remain the largest problem for small firms—a full quarter identifying “poor sales” as their top business problem. The net percent of all owners (seasonally adjusted) reporting higher nominal sales over the past three months lost 1 percentage point, falling to a net negative 9 percent, with more firms with sales trending down than up. Not seasonally-adjusted, 27 percent of all owners reported higher sales (last three months compared to prior three months), down 2 points from the prior month, while 28 percent reported lower sales (unchanged). Expectations for future sales are also in decline, with the net percent of owners expecting higher real sales falling 10 points in August, to a net negative 12 percent of all owners (seasonally adjusted), 25 points below January’s reading. Not seasonally adjusted, 21 percent expect improvement over the next 3 months (down 6 points) and 34 percent expect declines (up 7 points). Owners appear to have lost confidence in the economy and the government’s ability to assist the recovery.

The net percent of owners expecting better business conditions in six months was a negative 26 percent, down 11 points from July, and 36 percentage points lower than January. A negative 12 percent of all owners expect improved real sales volumes, 25 points worse than January. Only five percent characterized the current period as a good time to expand facilities (seasonally adjusted), down 1 point and 3 points lower than January. Of those reporting higher profits, 45 percent credited higher sales and 5 percent each credited lower materials cost and higher selling prices. Of those reporting negative sales trends, 45 percent blamed faltering sales, 5 percent higher labor costs, 15 percent higher materials costs, 3 percent insurance costs, 8 percent lower selling prices and 10 percent higher taxes and regulatory costs.

The frequency of reported capital outlays over the past six months rose 2 points to 52 percent of all firms in August, the first improvement in many months. Of those making expenditures, 36 percent reported spending on new equipment (unchanged), 20 percent acquired vehicles (up 3 points), and 13 percent improved or expanded facilities (up 1 point). Five percent acquired new buildings or land for expansion (unchanged) and 10 percent spent money for new fixtures and furniture (unchanged). The percent of owners planning capital outlays in the next three to six months rose 1 point to 21 percent, a recession level reading that has typified the recovery to date.

By Bill Liss, NBC 11, September 20, 2011

ATLANTA -- One of Atlanta's wealthiest businessmen says President Barack Obama's plan to raise taxes on the rich would only serve to slow hiring and slow America's economic recovery.   

Monday, President Obama introduced a proposal combining trillion-dollar spending cuts and the closure of tax law loopholes for the rich.   

"For us to solve this problem, everybody -- including the wealthiest Americans and biggest corporations -- have to pay their fair share," Obama said.   

But defining what exactly is a "fair share" and how it should be given is up for debate -- especially among some of America's wealthiest people.   

One of the president's biggest supporters for his plan is Warren Buffet, one of the richest men in the nation and chairman of conglomerate Berkshire Hathaway. Buffett gets a huge break on taxes with significantly lower tax rates for capital gains, where much of his income comes from.   

"I have a lower tax rate, counting my payroll taxes, than anyone in my office," Buffett said.    

Home Depot co-founder Bernie Marcus agrees the wealthy should pay their fair share, but parts ways with the Berkshire Hathaway CEO from there.   

"You have to go in and do a complete restructuring of the tax code, and you have to look at it across the board," Marcus said.   

Marcus says the real effort is found by creating jobs. He says that hiking capital gains taxes would actually slow or stop hiring.   

"Wealthy people create jobs, and the entire wealth of this country has come out of job creators, and job creation is the name of the game," Marcus said. "Those are the people that count, so you don't want to put them out of business."    

"Would you prefer that I built the aquarium or would you prefer the U.S. government built the aquarium?" Marcus asked rhetorically. "Would you prefer that I put money into Grady Stroke Center or would you rather have the government do it?"   

Marcus went on to counter Buffet's statements.   

"Warren Buffett says take it away," Marcus said. "Warren Buffett has never given money to charity. [For] the first time in his life, he's giving money to Gates to give it away. He doesn't give it away. I've given my money to Shepherd Center. I've given my money away to Emory. I've given my money to medical research. All these things I've done, would you rather me do it or the U.S. government do it?"   

Now that the White House has placed its proposal on the table, all eyes now turn to Capitol Hill and what Congress will do with the proposal.

By Emily Miller, The Washington Times, September 20, 2011

President Obama is asking Congress to raise taxes on job creators to pay for his “jobs” bill. On Monday, Mr. Obama said the Joint Select Committee for Deficit Reduction should find another $450 billion in deficit reduction (i.e., tax hikes) to bankroll his American Jobs Act, further impoverishing the nation while doing nothing to alleviate the 9.1 percent unemployment rate.  

Fat-cat donors who paid $35,800 for a ticket in Manhattan heard it directly from “The One”  on Monday: “We are going to keep pushing as hard as we can this week, next week and all the weeks that follow to try to get as much done as we can now.”  

Mr. Obama will raise the tax rates on small businesses from 33 to 36 percent. The majority of these job creators file taxes as individuals, so if a given company profited more than $200,000, the administration classifies it as a “millionaire or billionaire” who owes more moolah to Uncle Sam.  

“There shouldn’t be any reason for Congress to drag its feet,” the president pleaded from the Rose Garden. “I’m ready to sign a bill. I’ve got the pens all ready.” But Democrats are in no hurry to follow their leader. The Senate’s second-in-command, Illinois Democrat Dick Durbin, told CNN on Sunday that he doesn’t plan to bring up the bill until “next month.”  

Other Senate Democrats, including Pennsylvania’s Bob Casey, West Virginia’s Joe Manchin, Louisiana’s Mary Landrieu, Virginia’s Jim Webb, Alaska’s Mark Begich, Maryland’s Barbara Mikulski, Massachusetts’ John Kerry and Delaware’s Tom Carper have all openly distanced themselves from various aspects of the White House plan.  

The idea is such a dud that no Democrat bothered to file Mr. Obama’s bill. Instead, clever House Republicans filed their own American Jobs Act, taking the title for themselves.  

“We gave him a week, then we did it for him,” Rep. Louie Gohmert told The Washington Times in an interview. The Texas Republican’s two-page bill is much simpler than the president’s 155-pager.  

“We have the highest corporate tax rate in the world,” Mr. Gohmert said, describing his plan. “You eliminate that 35 percent tariff that we stick on our own goods before they leave the U.S., not only will people come back into the U.S. for manufacturing jobs, but you’ll be able to compete globally.”  

Rep. Ben Quayle introduced legislation to allow companies to opt out of certain regulations from Sarbanes-Oxley to make it easier for companies to go public, expand and thus hire new workers. The Arizona Republican summarized Mr. Obama’s problem to The Times: “The massive tax increases he proposes will negatively affect economic growth and job creation which is why Republicans and many Democrats firmly oppose them.”  

Eliminating the corporate tax, cutting regulatory red tape and giving small businesses certainty about their tax liability would help create jobs. Mr. Obama is wasting his time and taxpayer money on junkets to the Midwest to sell his recycled tax-and-spend ideology. No one is buying it anymore.  

Emily Miller is a senior editor for the Opinion pages at The Washington Times.

By SEN. SUSAN COLLINS (R-Maine), Wall Street Journal, SEPTEMBER 26, 2011

Last year, the Food and Drug Administration issued a warning to a company that sells packaged walnuts. Believe it or not, the federal government claimed the walnuts were being marketed as a drug. So Washington ordered the company to stop telling consumers about the health benefits of walnuts.   

Meanwhile, the Environmental Protection Agency proposed a new rule on fossil-fuel emissions from boilers that—by the EPA's own admission—would cost the private sector billions of dollars and thousands of jobs. The owner of a small business in Maine told me the proposed rule would require him to scrap a new, $300,000 wood waste boiler he recently installed.   

No wonder America's employers dread what is coming next out of Washington. Our country cannot afford regulations run amok at a time when no net new jobs are created and unemployment remains above 9%. But at least we're safe from health claims about walnuts.   

America's overregulation problem is only getting worse. Right now, federal agencies are at work on more than 4,200 rules, 845 of which affect small businesses, the engine of job creation in our country. More than 100 are major rules, with an economic impact of more than $100 million each.   

No business owner I know questions the legitimate role of limited government in protecting our health and safety. Too often, however, our small businesses are buried under a mountain of paperwork that drives up costs, prevents the hiring of workers, and impedes economic growth.   

Business owners are reluctant to create jobs today when they're going to need to pay more tomorrow to comply with onerous new regulations. That's what employers mean when they say that uncertainty generated by Washington is a big wet blanket on our economy.   

I have asked employers in my state what it would take to help them add jobs. No matter their business or the size of their work force, they tell me that Washington must stop imposing crushing new regulations.   

America needs a "time-out" from the regulations that discourage job creation and hurt our economy. I have introduced legislation to impose a one-year moratorium on any "significant" new rules that would have an adverse impact on jobs, the economy, or America's international competitiveness. A one-year moratorium on such regulations is a common-sense solution that would help create jobs.   

Under my bill, certain rules would be exempt from the moratorium: those that are needed in emergencies, such as to respond to imminent threats to public health or safety, and those affecting crime, the military and foreign affairs. My bill also excludes rules that would reduce the regulatory burden on the private sector. Unfortunately, those rules that actually reduce regulatory burdens and promote jobs are few and far between.   

That EPA rule on boilers is a good example of why we need a regulatory time-out. According to a recent study by the American Forest & Paper Association, if the rule went into effect as written it could, along with other pending regulations, cause 36 American pulp and paper mills to close. That would put more than 20,000 Americans out of work—18% of that industry's work force.   

Once those mills close, the businesses that supply them also would be forced to lay off workers. Estimates are that nearly 90,000 Americans would lose their jobs, and wages would drop by $4 billion—just because of over-regulation.   

But even that is not the end of the story. People and businesses would still need paper. Where do you think we would get it? We'd be strengthening the economies of other countries like China, India and Brazil, while weakening our own.   

American businesses need pro-growth economic policies that will end the uncertainty and kick-start hiring and investment. American workers need policies that will get them off the sidelines and back on the job.   

In sports, time-outs are called to give athletes a chance to catch their breaths and make better decisions about the next play. American workers and businesses are the athletes in a global competition that we must win. They need a time-out from excessive regulation so that America can get back to work.   

Ms. Collins is a Republican senator from Maine.   

By: Kendra Marr, Politico, September 26, 2011

Here we go again.

President Barack Obama hasn’t yet used the term “shovel ready” in his latest jobs pitch, but he faces a familiar problem: Infrastructure experts doubt that billions in emergency spending will be the quick jobs fix the president is promising.

“Unfortunately, there aren’t many jobs ready to go at the snap of a finger,” said William Ibbs, a professor of civil engineering at the University of California at Berkeley, who also consults on major construction projects.

Obama’s plan calls for $50 billion in immediate investments for improved highways, transit systems, railways and aviation — an idea he proposed a year ago that failed to gain traction. The goal is to put Americans back to work, upgrading 150,000 miles of road, 4,000 miles of train tracks, 150 miles of airport runways and the nation’s air traffic control system.

“There are out-of-work construction workers around the country who are ready to go to work on these projects, and we have the opportunity here — Congress does, if it passes the American Jobs Act — to put those Americans to work,” White House press secretary Jay Carney recently told reporters.

With the jobless rate hovering at 9 percent and an uneasy economic recovery, jobs are needed now — not in a few years.

But experts are skeptical that projects would come fast enough. A tremendous amount of money and time is needed to get a project through a detailed design process, permitting, environmental hurdles, public hearings and land acquisition.

“As a rule of thumb, you’re looking at three years for a project, really going from the time the federal government says we have the money and want to spend it,” Ibbs said. But that’s for the easiest, simplest projects, such as building a road through an uninhabited piece of land. “The politicians really don’t understand how cumbersome the process is these days,” Ibbs said.

“Environmental permitting, especially on road projects can take years. You’re hiring attorneys, not really shoveling a lot of dirt.”

The reality is the quickest projects to jump-start are simply resurfacing existing roads with asphalt — not the best way of reining in the national infrastructure crisis — and the massive infrastructure improvements that promise generations of benefits can easily double and triple that time frame.

“Do we have many Hoover Dams that are shovel ready? I think not,” said Richard G. Little, director of the Keston Institute for Public Finance and Infrastructure Policy at the University of Southern California. “It’s not a trivial activity to get to the point where you actually get to construct.”

On top of the time lag, state transportation departments don’t have many jobs just waiting on the shelf, said Andrew Herrmann, the American Society of Civil Engineers’  incoming president. Budget crunches have severely limited their long-term planning and Congress’s inaction on a new highway bill has caused even more headaches.

“Over the last couple of years, they haven’t had an opportunity to get ahead of the curve to get some of those projects ready,” Herrmann said. “It’s very hard to plan when the federal highway bill is on extensions.”

The concern is that projects meeting the requirements for the immediate investments would be those that have been shelved after being designed and engineered, yet have since become outdated or limited in scope.  


Another worry is this patchwork approach, which has been in play for decades, won’t move the nation closer to a comprehensive plan to coordinate both short-term and long-term projects, experts said.

Part of the reason Obama’s previous push for a $50 billion infrastructure program failed was that there was little evidence the program would promptly create jobs.

The term “shovel ready” has become an inadvertent badge of government bureaucracy. Even the president has turned it on himself, joking, “Shovel-ready was not as, uh, shovel-ready as we expected.”

An Associated Press report, analyzing the economy 10 months into Obama’s first economic stimulus plan, found that “a surge in spending on roads and bridges has had no effect on local unemployment and barely helped the beleaguered construction industry.”

But advocates point out that the roughly $48 billion in the Recovery Act set aside for transportation projects repaired more than 40,000 miles of roads and 1,300 bridges. And stimulus package funding helped keep 325,000 workers employed in the second quarter of 2011, according to Recovery.gov.

And a number of bulldozers and cranes are rumbling across the country. For instance, after years of delays because of funding shortages, Wisconsin is expanding I-94 with a $43 million Recovery Act award from the Transportation Department. An additional $20 million award is funding the replacement of an 81-year-old bridge over the Ohio River. In New Mexico, a $31 million grant is being used for making a rural road, connecting the Navajo Nation to vital services, safer.

“The president’s plan is a welcome start,” Herrmann said. “We need to start working on infrastructure as fast as possible, but we have to look at long term too.”

Regardless, the nation’s infrastructure needs financial help.

U.S. infrastructure was once among the best in the world but has slipped to 23rd place in the World Economic Forum’s ranking. The ASCE gave the country a “D” on its recent infrastructure report card and estimated it would require an investment of $2.2 trillion over five years to get it back into shape.

And a panel of 80 experts — chaired by former Transportation Secretaries Norm Mineta and Samuel Skinner — found that the federal government needs to be spending between $134 billion and $262 billion a year through 2035 to maintain and improve the roads, rail system and air transportation.

Obama ran into this dilemma last week when he visited the outdated Brent Spence Bridge, which links Ohio and Kentucky, the home states of House Speaker John Boehner and Senate Minority Leader Mitch McConnell. Republicans quickly latched on to a Cincinnati Enquirer report that even if Congress passes Obama’s American Jobs Plan, it’s unclear if the money would ever reach the bridge. Since the bridge is still in the preliminary engineering and environmental clear phase, in the best-case scenario, workers wouldn’t be hired until 2013 or 2015.

A few days later, GOP presidential long shot Gary Johnson quipped, “My next-door neighbor’s two dogs have created more shovel-ready jobs than this current administration.”

The one-liner echoed a zinger by conservative radio personality Rush Limbaugh. And in this infrastructure debate, it probably won’t be the last time this shovel-ready joke will be reused.

By John Stossel, Creators.com, September 28, 2011

Politicians say they create jobs, but they really don't. Or rather, they rarely create productive jobs. Government has no money of its own. All it does is take resources from one group and give them to another. The pharaohs might have claimed they created work when they ordered that pyramids be built, but think how much richer (and freer) the Egyptians would have been if they'd been allowed to pursue their own interests.  

It's individuals in the marketplace who create real jobs — when they have the protection of life and property under the rule of law.  

Economic freedom is the key. The theory couldn't be more clear, and at this late date in human history, it shouldn't be necessary to rehearse the abundant evidence. Look at the various indexes that correlate economic freedom with economic growth. The healthiest economies are those with the most economic freedom. Unemployment is low in those places — 3 percent in Hong Kong, 2 percent in Singapore, 5 percent in Australia.  

Alas, the United States places ninth, behind Canada, and those countries with the least economic freedom have few real jobs and no prosperity.  

Unfortunately, most politicians still don't understand — or have no incentive to understand —  that economic freedom, and therefore less government, creates prosperity. Well, maybe that's changing. This year is first I've heard so many presidential candidates talk about the private sector. Indeed, one candidate, former New Mexico Gov. Gary Johnson, told me he created "not one single job. ... Government does not create jobs."  

The truth is we have too few jobs today because government stands in the way. If I'm an employer, why would I want to hire someone when Congress and the Labor Department have so many rules that I might not be able to fire that person if he can't do the job? Why would I take a risk on an investment when still-to-be-written rules about Obamacare, financial regulation and the environment could turn my good idea into a losing venture?  

I refereed a debate on whether government creates or impedes economic activity.  

"Government can spend and create jobs," said David Callahan, cofounder of Demos. "If government steps up and provides stimulus money to hire people, what we get is more people spending money in this economy, more hiring, and we get that virtuous cycle going."  

Yaron Brook, president of the Ayn Rand Institute, replied:  

"It is ridiculous to assume you can tax the people that are working and give the money (to people) who are not working and somehow this creates economy activity.  

You are destroying as much by taking from those who are working and creating."

Callahan then invoked the magic I-word.  

"One place we need more government spending is for infrastructure. Drive down any road, go across any bridge, you are likely to see dilapidation. There was a bipartisan panel that said we need to spend $2 trillion or more on infrastructure."   

"Don't pretend that stimulates the economy," Brook rebutted. "That money has to come from somewhere, that $2 trillion that you would want to spend on infrastructure is taken from the private economy."  

"This is a fallacy," Callahan replied. "Twenty million jobs were created in the 1990s when we had higher tax rates than we do today. After World War II —  also a period of high tax rates, also incredible job growth.  

And, by Keynesian logic, war can stimulate the economy.  

"World War II was the great stimulus. ... That kind of external crisis can inject a lot of new capital."  

"This is one of the worst fallacies of economics," Brook said. "This is called the broken-window fallacy."  

The fallacy comes from Frederic Bastiat's story of the boy who breaks a shop window, prompting some to believe that replacing the window will stimulate a ripple of economic activity. The fallacy lies in overlooking the productive things the shopkeeper would have done with the money had the window not needed replacing.  

"World War II did nothing to promote economy growth," Brook said. "Blowing things up is not an economic stimulus. Destruction does not lead to progress."   

Don't expect most politicians to learn this any time soon.  

John Stossel is host of "Stossel" on the Fox Business Network. He's the author of "Give Me a Break" and of "Myth, Lies, and Downright Stupidity."

By Sara Murray, Wall Street Journal, September 28, 2011

State and federal taxes are rising for employers across the U.S. as states struggle to repay federal loans for unemployment benefits, including more than $1 billion in interest due Friday.   

The increases in state and federal unemployment-insurance taxes—paid primarily by businesses—are hitting as the recovery appears close to stalling, consumer confidence is low and unemployment remains high at 9.1%.   

These tax increases come on top of measures intended to tame government budgets, including other state tax increases and spending reductions as well as federal cuts. 

The higher tax tab could discourage hiring. "It's just one more cost to add," said Douglas Devnew, vice president for finance and administration at Trumpf Inc., a Farmington, Conn., manufacturer. "Companies like ours are going to think that much harder if we need more folks."    

When joblessness soared during the recession and anemic recovery, many states drained their unemployment funds and borrowed from Washington to cover their share of benefits. Now 27 states collectively owe almost $38 billion. More than $1 billion in interest on those loans is due Friday, when the federal government's fiscal year ends, and some states are relying on additional taxes to make the payments.   

Many employers will face a second hit—higher federal taxes—if their states don't pay their loan balances by November. The increased unemployment-insurance levies, an added $21 per employee a year in roughly 22 states, go into effect in January. That increase will be even bigger for states that miss their interest payments.   

State governments are "under tremendous pressure to find a way to pay these interest charges," said Richard Hobbie, executive director of the National Association of State Workforce Agencies. "The penalties for not paying interest are severe." The federal government pays for administering the unemployment program and emergency jobless benefits extensions. States pay for up to 26 weeks of regular benefits and, if they exhaust their funds, borrow from Washington to continue providing checks.   

Connecticut, for instance, has an outstanding loan balance of nearly $810 million and racked up an additional $22.6 million in interest, which it has paid, according to the Treasury Department. State unemployment-insurance taxes—and the size of the tax increases—vary. Employers in Connecticut pay between $285 and $1,020 per employee a year.   

In August, Connecticut businesses paid an additional charge of roughly $25 per full-time employee. If the state doesn't pay off its loan balance by November, employers will pay the additional $21-per-employee federal tax by January.   

"It's supposed to be you finance your system when times are pretty good," said Carl Guzzardi, the unemployment insurance director of accounts at the Connecticut Department of Labor. "We simply didn't gather sufficient funds so we had enough reserves." That's unlikely to change soon. "We're probably going to be going through this exercise for each of the next three years," he said   

The proceeds from the state tax increases will be used to pay the interest owed. The proceeds of the federal tax increases will be used to pay down the outstanding loan balances.   

The federal loans to states for unemployment insurance were interest-free through 2010, thanks to a provision in President Barack Obama's 2009 stimulus package. Mr. Obama's 2012 budget proposal included a provision that would allow states to borrow interest-free for another two years but it gained little traction in Congress.   

Rising unemployment taxes could diminish the impact of other government measures designed to boost the economy. The Social Security payroll tax cut for workers, which reduced the employees' rate to 4.2% of earnings from 6.2%, did little to reduce the overall tax burden or boost disposable income this year in part because it was offset by state-level tax increases and the expiration of other federal tax credits, according to a Goldman Sachs analysis.   

Although many economists support efforts to rein in budgets, some worry the combination of tax increases and spending cuts is hindering growth.   

"The broader sweep of policy is something to be concerned about," said Bruce Kasman, a JP Morgan Chase & Co. economist. "That, I think, is a big issue from the perspective of an economy that is definitely struggling."   

Some economists see little impact from unemployment-insurance tax increases alone. "At the margin, you might expect it to have a very small effect on hiring," said Jesse Rothstein, a University of California, Berkeley, economist and former chief economist for the Labor Department.   

Amid high unemployment, states could borrow from the federal government for years, leading to repeated rounds of tax increases to pay back the loans with interest.    

Rhode Island's unemployment insurance trust fund likely won't be solvent until 2015. In the meantime, employers are facing higher taxes and jobless workers will receive less-generous benefits. "We expect that to help with solvency," said Laura Hart, a spokeswoman for the Rhode Island Department of Labor and Training. "It's a shared pain." 

A National Association of State Workforce Agencies survey this year found that, of 26 states that responded and had outstanding balances on unemployment-insurance loans, 16 planned to rely on tax increases to pay the interest on their loans.   

States have other options for raising the money. California is borrowing from its disability insurance fund to pay its interest tab of more than $300 million. 

"At this point we don't anticipate that the fund can recover on its own," without legislative changes to the system, said Loree Levy, a spokeswoman for California's Employment Development Department. "It will be an even bigger interest payment next year if we continue where we are today."   

Idaho issued bonds to pay the nearly $230 million it owed Washington in principal and interest because it got a better interest rate. The interest rate on the bonds was just above 1% compared with the more than 4% rate the federal government charges. The switch will save $15.5 million, according to the Idaho Department of Labor. Other states have considered tapping general funds.   

Read online here: http://on.wsj.com/qe7E9T 

By John Stossel, FoxNews.com, Published September 28, 2011

Politicians say they create jobs, but they really don't. Or rather, they rarely create productive jobs. Government has no money of its own. All it does is take resources from one group and give them to another.  

The pharaohs might have claimed they created work when they ordered that pyramids be built, but think how much richer (and freer) the Egyptians would have been if they'd been allowed to pursue their own interests.  

It's individuals in the marketplace who create real jobs -- when they have the protection of life and property under the rule of law.  

Economic freedom is the key. The theory couldn't be more clear, and at this late date in human history, it shouldn't be necessary to rehearse the abundant evidence. Look at the various indexes that correlate economic freedom with economic growth. The healthiest economies are those with the most economic freedom. Unemployment is low in those places -- 3 percent in Hong Kong, 2 percent in Singapore, 5 percent in Australia.  

Alas, the United States places ninth, behind Canada, and those countries with the least economic freedom have few real jobs and no prosperity.  

Unfortunately, most politicians still don't understand -- or have no incentive to understand -- that economic freedom, and therefore less government, creates prosperity.    

Well, maybe that's changing. This year is first I've heard so many presidential candidates talk about the private sector. Indeed, one candidate, former New Mexico Gov. Gary Johnson, told me he created "not one single job. ... Government does not create jobs."  

The truth is we have too few jobs today because government stands in the way. If I'm an employer, why would I want to hire someone when Congress and the Labor Department have so many rules that I might not be able to fire that person if he can't do the job? Why would I take a risk on an investment when still-to-be-written rules about ObamaCare, financial regulation and the environment could turn my good idea into a losing venture?  

Last week on my Fox Business show, I refereed a debate on whether government creates or impedes economic activity.  

"Government can spend and create jobs," said David Callahan, co-founder of Demos. "If government steps up and provides stimulus money to hire people, what we get is more people spending money in this economy, more hiring, and we get that virtuous cycle going."  

Yaron Brook, president of the Ayn Rand Institute, replied:  

"It is ridiculous to assume you can tax the people that are working and give the money (to people) who are not working and somehow this creates economy activity. You are destroying as much by taking from those who are working and creating."   

Callahan then invoked the magic I-word.  

"One place we need more government spending is for infrastructure. Drive down any road, go across any bridge, you are likely to see dilapidation. There was a bipartisan panel that said we need to spend $2 trillion or more on infrastructure."

"Don't pretend that stimulates the economy," Brook rebutted.  

"That money has to come from somewhere, that $2 trillion that you would want to spend on infrastructure is taken from the private economy."  

"This is a fallacy," Callahan replied. "Twenty million jobs were created in the 1990s when we had higher tax rates than we do today. After World War II -- also a period of high tax rates, also incredible job growth.  

And, by Keynesian logic, war can stimulate the economy.  

"World War II was the great stimulus. ... That kind of external crisis can inject a lot of new capital."  

"This is one of the worst fallacies of economics," Brook said.  

"This is called the broken-window fallacy."  

The fallacy comes from Frederic Bastiat's story of the boy who breaks a shop window, prompting some to believe that replacing the window will stimulate a ripple of economic activity. The fallacy lies in overlooking the productive things the shopkeeper would have done with the money had the window not needed replacing.   

"World War II did nothing to promote economy growth," Brook said. "Blowing things up is not an economic stimulus. Destruction does not lead to progress."   

Don't expect most politicians to learn this any time soon.

By Charles Schwab, Wall Street Journal, September 28

In his speech before a joint session of Congress on Sept. 8, President Obama said, "Ultimately, our recovery will be driven not by Washington, but by our businesses and our workers."  

He is right. We can spark an economic recovery by unleashing the job-creating power of business, especially small entrepreneurial businesses, which fuel economic and job growth quickly and efficiently. Indeed, it is the only way to pull ourselves out of this economic funk.  

But doing so will require a consistent voice about confidence in businesses-small, large and in between. We cannot spend our way out of this. 

We cannot tax our way out of this. We cannot artificially stimulate our way out of this. We cannot regulate our way out of this. Shaming the successful or redistributing income won't get us out of this. We cannot fund our government coffers by following the "Buffett Rule," i.e., raising taxes on Americans earning more than $1 million a year.  

What we can do-and absolutely must-is knock down all hurdles that create disincentives for investment in business.  

Private enterprise works. I founded Charles Schwab in 1974, when America was confronting a crisis of confidence similar to today's. We had rapidly rising inflation and unemployment, economic growth grinding into negative territory, and paralyzed markets. The future looked pretty bleak.  

Sound familiar?  

Yet I had faith that our economy would recover. My vision was simple:

Investors deserve something better than the status quo. I launched the company with four employees, a personal loan on my home, and an audacious dream. I didn't know exactly how we were going to do it, nor could I foresee that over the decades we would end up building a business that serves over 10 million accounts. But we went for it.  

What's the potential power of the entrepreneur's simple leap of faith? The success of a single business has a significant payoff for the economy. 

Looking back over the 25 years since our company went public, Schwab has collectively generated $68 billion in revenue and $11 billion in earnings. 

We've paid $28 billion in compensation and benefits, created more than

50,000 jobs, and paid more than $6 billion in aggregate taxes. In addition to the current value of our company, we've returned billions of dollars in the form of dividends and stock buybacks to shareholders, including unions, pension funds and mom-and-pop investors.  

The wealth created for our shareholders-a great many of them average Schwab employees-has been used to reinvest in existing and new businesses and has funded a myriad of philanthropic activities. We've also spent billions buying services and products from other companies in a diverse set of industries, from technology to communications to real estate to professional services, thereby helping our suppliers create businesses and jobs.  

That's the story of one company. There are thousands more like it, and a consistent supportive voice from Washington could enable thousands more ahead.  

The simple fact is that every business in America was started by an entrepreneur, whether it is Ford Motor Co., Google or your local dry cleaner. Every single job that entrepreneur creates requires an investment. 

And at its core, investing requires confidence that despite the risks, despite the hard work that will certainly ensue, the basic rules of the game are clear and stable. Today's uncertainty on these issues-stemming from a barrage of new complex regulations and legislation-is a roadblock to investment. We have to clear that uncertainty away.  

As we did after 1974, our country can and will thrive again. But the leaders of both parties, Republicans and Democrats alike, must lend their voices to encourage and support private enterprise, both for what it can do to turn our economy around and for the spirit of opportunity it represents.  

They need to review every piece of existing legislation and regulation with a clear eye to what impact it will have on business and growth. If something is a job killer, put a moratorium on it. Stop adding to the litany of new laws and regulations until we've had time to digest those in place and regain some certainty about the future. Proposed laws and regulations should be put to a simple test: What will this do to encourage businesses and entrepreneurs to invest? What will it do for jobs?  

Mr. Schwab is founder and chairman of the Charles Schwab Corporation.  

Read the full article here: http://on.wsj.com/rd0pVR  

An Overlooked Way to Create Jobs

By C. Fred Bergsten, The New York Times, September 28, 2011-

Tags: International Trade,  

By virtually ignoring trade, President Obama and Congressional Republicans are missing a major opportunity to create jobs. The United States runs an annual trade deficit of about $600 billion, or 4 percent of our entire economy. Eliminating that imbalance would create three million to four million jobs, according to Commerce Department estimates, at no cost to the budget.  

It is clear that our economy can no longer rely on consumer borrowing, housing bubbles, government deficits and super-low interest rates. The United States must start selling much more to other countries, especially China and other emerging markets that are growing at 6 percent or more per year.  

Mr. Obama has set a goal of doubling the nation’s exports over five years. But his administration has done little to achieve that goal, which is inadequate to begin with. For one thing, the focus should not be the level of exports but the overall deficit — the difference between what we import from abroad and what we sell overseas.  

This will of course require us to get our house in order: balancing the budget over time; investing in education, infrastructure and scientific research; and making taxation and regulation more efficient. But there are three steps we can take that would pay off more quickly.  

First, the United States must, in effect, weaken the dollar by 10 to 20 percent. This step alone would produce one million to three million jobs. It’s been done before: In 1971, President Richard M. Nixon ended the dollar’s convertibility in gold, and in 1985, Treasury Secretary James A. Baker III reached an agreement with foreign countries to devalue the dollar relative to the yen and the Deutsche mark.  

The bulk of our current misalignment is vis-à-vis the Chinese currency, the renminbi, and a small group of other Asian currencies. Partly in response to pressure from the United States and other countries, China has let its currency rise modestly over the past year, but it continues to intervene in foreign exchange markets, purchasing one billion to two billion United States dollars every day to prevent the value of the renminbi from rising more quickly.   

The artificially low value of the renminbi — it is 20 to 30 percent less than what it should be — amounts to a subsidy on Chinese exports and a tariff on imports from the United States and other countries. The United States should take China to the World Trade Organization in Geneva for engaging in illegal competitive currency devaluation, and retaliate if China does not cease this protectionist policy. Many members of Congress have urged such action, but Mr. Obama, like President George W. Bush before him, has been too timid to take this step.  

Along with pressuring the Chinese, Congress and Mr. Obama should reduce the budget deficit, the Federal Reserve should continue to pursue an expansionary monetary policy and politicians should drop the “strong dollar” rhetoric of the past. An overvalued dollar only exacerbates the trade imbalance.  

Second, the United States must negotiate a reduction in foreign regulations, monopoly practices and other barriers to the export of American services. Work done by American architects, engineers, lawyers and accountants for foreign customers is an export, just like Boeing planes and Caterpillar tractors. We run a $750 billion trade deficit in goods but a $150 billion trade surplus in services.  

Services make up 80 percent of our economy, and we have a huge opportunity to serve emerging markets like Brazil, China and India. We could expand services exports by at least $200 billion a year by completing a free-trade agreement with South Korea; pursuing a trade agreement known as the Trans-Pacific Partnership; and reviving the Doha round of global trade talks, with a focus on services. The administration has not pursued these steps with enough vigor.  

Third, we must get serious about defending the intellectual property rights of our companies against theft by foreign companies and governments. A recent study by the International Trade Commission suggested that Chinese companies alone, with support or at least acquiescence from their government, are stealing $50 billion to $100 billion in United States products each year. The global total is probably at least twice as large.  

The theft of intellectual property cuts across such highly competitive products as Microsoft Windows, Apple iPads, groundbreaking pharmaceuticals and award-winning films. Negotiations have failed to achieve significant progress. We must take many more intellectual property cases to the W.T.O. and credibly threaten unilateral retaliation if the foreign piracy continues.  

These steps are no doubt aggressive. They would require taking tough initiatives with some of our main trading partners, especially China, and giving trade a more prominent, even central, role in our overall foreign policy. To be sure, some American corporations will fret that these actions would needlessly antagonize the Chinese and threaten a trade war. Some economists worry that a weaker dollar would invite inflation and endanger the dollar’s status as the dominant global currency. I believe these fears are overblown. The real threat to the world trading system is, in fact, the protectionist policies, including undervalued currencies, of other countries and the vast trade imbalances that result.  

Not every country can expand its economy through exports, because one nation’s smaller deficit is another’s smaller surplus. But the United States has a unique claim now to pursue such a strategy, because it has run large deficits for most of the last three decades, become the largest debtor country and accommodated other countries’ desire for export-led prosperity. If we want to avoid bankruptcy and raise growth, we have got to attack the trade deficit.  

C. Fred Bergsten, an assistant Treasury secretary from 1977 to 1981, is director of the Peterson Institute for International Economics.

By John F. Cogan and John B. Taylor, Wall Street Journal, October 3, 2011

Temporary, targeted tax reductions and increases in government spending are not good economics. They have repeatedly failed to increase economic growth on a sustainable basis. What may come as a surprise is that such policies are not good politics either. Their inability to deliver promised economic benefits has invariably led disappointed voters to turn against those politicians, Democratic and Republican, who have supported them.  

Consider the evidence. When President Gerald Ford entered office, the economy was in the midst of the serious 1974-75 recession. Responding to the popular clamor to "do something," he proposed a short-term stimulus plan in early 1975. The centerpiece was a temporary income-tax rebate. Congress added a one-time, $50 increase in Social Security benefits and, to bolster the sagging housing market, a one-time tax credit for new home buyers.  

The rebate caused only a temporary blip in consumer spending. Economic growth rose to 9% in the first quarter of 1976 but then dropped to only 2% in the third quarter, and unemployment started rising.  

Congress enacted a second stimulus plan in July 1976 over Ford's veto. It authorized grants to state and local governments designed to prevent layoffs of public employees or tax increases. This plan also failed to produce the promised stimulus. The economic pause of 1976 was enough to swing the election to Jimmy Carter and cause more incumbent senators to lose their seats than in any election in nearly 20 years.  

President Carter took office and by the end of his first month proposed another stimulus plan, which he said would "restore consumer confidence and consumer purchasing power." His plan called for another round of one-time tax rebates and Social Security bonus payments, federal public infrastructure grants and countercyclical aid to state and local governments.  

He also added a tax credit for small and medium-size employers hiring new workers. The fine-tuned plan, according to the chairman of Mr. Carter's Council of Economic Advisers, Charles Shultze, was "designed to tread prudently between the twin risks of over and under-stimulation."  

In May 1977, Congress enacted the president's proposals in modified form. Although the pace of economic activity quickened for a while, subsequent studies by senior Carter administration Treasury official Emil Sunley and noted economist Ned Gramlich showed that the government-provided stimulus had little effect. The recovery was not sustained and the economy fell into recession in January 1980. The failing economy combined with rapidly rising inflation doomed Mr. Carter's re-election chances, along with the Democratic Party's control of the Senate and 33 Democratic seats in the House.  

President Reagan rejected temporary stimulus measures and instead proposed permanent income-tax rate reductions. His tax program, in conjunction with steady monetary policy begun by Paul Volcker, produced the promised results.  

By late 1982 the recession was over and in early 1983 employment and investment began to rise rapidly. In 1984, it was "Morning in America" and Reagan was overwhelmingly re-elected. Nearly two decades of strong, steady, noninflationary economic growth ensued.  

The success of Reagan's permanent tax-rate reductions, juxtaposed against the clear failure of his predecessors' temporary Keynesian stimulus measures, put the Keynesian approach on the back burner. The extent to which temporary stimulus measures fell into disfavor is evident from President Bill Clinton's first year in office. That year he proposed a minuscule $16 billion stimulus plan. Congress rejected it and turned its attention instead to reducing the federal budget deficit by cutting the growth in spending and raising taxes.  

When President George W. Bush took office in 2001, his first priority was to put a broad-based, permanent reduction in tax rates into effect. But when the signs that the economy was weakening became apparent early that year, temporary stimulus measures were added to the president's plan. The final tax-reduction law included a temporary tax rebate and phased in the tax-rate reductions at a slower pace than he originally proposed. As with previous stimulus efforts, the rebates had little or no effect.  

A combination of the economic impact of 9/11 and the failure of the 2001 Keynesian stimulus measure to have any lasting economic effect led Congress in 2003 to enact additional tax relief. In May of that year, at the urging of Mr. Bush, Congress sharply reduced tax rates on capital gains and dividends and put the 2001 income-tax rate reductions in place immediately.  

Within four months, employment began to rise and the unemployment rate began to fall. By 2004, the economic recovery was in full swing. President Bush was re-elected, along with Republican majorities in both the House and Senate.  

In response to the recession that began in late 2007, both Presidents Bush and Obama chose to rely on Keynesian stimulus policies. President Bush's temporary tax rebate in 2008 had no discernible effect on the economy. The declining economy partially contributed to John McCain's defeat and played a crucial role in the Republicans' loss of seats in both the House and Senate.  

Mr. Obama's $800 billion temporary, targeted stimulus plan took the same approach as Mr. Carter's more than three decades earlier. The February 2009 bill included temporary tax rebates, additional spending on federal programs, and one-time grants to state and local governments.  

It had the same negligible economic impact as Mr. Carter's and, thus far, eerily similar political consequences. The plan's failure preceded a historic Republican electoral sweep in the 2010 House elections and significant Republican gains in the Senate. The continuing economic discontent has placed Mr. Obama's re-election in serious jeopardy.  

That temporary tax reductions and increases in government spending can jump-start the economy and sustainably boost employment and personal income may seem like a politician's dream policy. But the repeated failure of these short-term interventionist policies to deliver the promised economic benefits should make politicians think twice. Reliance on them has already cost dozens of members of Congress their jobs and two postwar presidents a second term.  

Mr. Cogan, a senior fellow at the Hoover Institution and a professor of public policy at Stanford University, served as deputy director of the Office of Management and Budget during the Reagan administration. Mr. Taylor, a professor of economics at Stanford and a senior fellow at the Hoover Institution, served as under secretary of the Treasury during the George W. Bush administration.

By Steve Matthews, October 4, 2011

Federal Reserve Bank of Richmond President Jeffrey Lacker said last month’s move to reduce long- term interest rates is unlikely to spur a job market hampered by uncertainty over fiscal policy and government regulation.  

“I tend to think it would cause higher inflation and have only a transitory or fleeting effect on growth,” Lacker said yesterday in response to audience questions after a speech in Madison, Wisconsin.  

Fed Chairman Ben S. Bernanke said last week the U.S. is facing “a national crisis” with the jobless rate at around 9 percent since April 2009. The European debt crisis, political haggling in the U.S. and a plunge in stock prices have prompted a drop in consumer and business confidence that may hurt spending and hiring. Bernanke is scheduled to testify today to a congressional panel about the economic outlook.  

Policy makers voted Sept. 21 to push down mortgage and other loan rates in bid to spur growth and employment. The Fed plans to do so by extending maturities of the Treasuries in its portfolio, buying $400 billion of long-term debt and selling an equal amount of shorter-term securities.  

“There are impediments to growth that somewhat lower longer-term interest rates would not be the antidote for,” Lacker said of the policy, known as Operation Twist. “Our role is fairly limited in terms of increasing growth.”  

Employment Barriers   

Lacker identified several barriers to higher employment, including businesses’ uncertainty about environmental and labor regulation, concern about tax and fiscal policy, extended unemployment benefits and a mismatch between employers’  needs and workers’ skills.  

“My sense of Operation Twist is if it has economic effects, it is more likely to raise inflation that it is to measurably raise growth,” Lacker told reporters after his speech. “I would not have supported it.”  

Lacker doesn’t vote on policy this year under the Fed’s rotating system. Dallas Fed President Richard Fisher, Minneapolis Fed President Narayana Kocherlakota and Charles Plosser of the Philadelphia Fed voted against the decision last month. They “did not support additional policy accommodation at this time,”  the Fed statement said.  

The Richmond Fed leader spoke after the Standard & Poor’s 500 Index fell to a more than one-year low yesterday on concern Europe’s debt crisis will worsen. The index dropped 2.9 percent to 1,099.23 in New York. Treasury securities rose, sending the yield on the benchmark 10-year note down to 1.77 percent from 1.92 percent late on Sept. 30.  

Lacker told reporters he is confident in the staying power of the two-year-old U.S. economic recovery.   

Low Chance of Recession   

“The chance of recession looks low now to me,” he said. “Broadly speaking, the data flow has been disappointing, but still consistent with economic growth at a moderate pace.”  

Economists have cut their forecasts for growth, according to a Bloomberg News survey taken from Sept. 2 to Sept. 7. The median forecast calls for a 1.8 percent annual pace of expansion in the third quarter, down from 2.1 percent in the previous month’s survey. Growth next year is forecast to average 2.2 percent, down from 2.4 percent.  

Reports yesterday showed manufacturing unexpectedly accelerated in September and construction spending climbed in August.  

Earlier data, including stagnant payrolls in August, plunging consumer confidence and falling home values, have pointed to slower growth.  

The Richmond Fed leader said he has become more concerned about inflation, which now appears to be above the Fed’s target. High unemployment may do little to push down prices, he said.  

‘Little Too High’   

“Inflation is above where we would all like to see it,” Lacker said. “I don’t see the amount of slack in the economy providing me much comfort.”  

The Fed’s preferred price gauge, which excludes food and fuel, was up 1.6 percent over the past 12 months, Commerce Department figures showed Sept. 30.  

Two Fed officials last week said they continue to be on guard against inflation. Governor Sarah Bloom Raskin said the central bank’s use of its policy tools has been “completely appropriate,” and that she would be “quite leery”  of allowing higher inflation or price expectations in an attempt to lower real interest rates.  

St. Louis Fed President James Bullard said faster inflation won’t stem the housing glut and “monetary policy is ultra-loose right now, and appropriately so.”  

Tolerating Inflation   

Lacker disagreed with the view, voiced by Chicago Fed President Charles Evans, that the Fed should consider allowing higher inflation for a time to accelerate growth and bring down unemployment.  

“Tolerating even on a temporary basis higher inflation in an effort to reduce unemployment is something we have tried before and it has failed,” he said. “It would set a precedent which would hamper our credibility for decades to come.”   

Wall Street Journal editorial, October 11, 2011

The Senate is expected to vote as early as today on President Obama's $447 billion jobs plan, and with any luck enough Democrats will join nearly all Republicans to defeat it. They'd be doing the economy a favor, and their own re-election bids too.  

As economic "stimulus," the proposal is a junior achievement version of the 2009 plan that cost $820 billion but did so little for growth. The biggest feature of the new plan is a $265 billion payroll tax cut that would lower the employee share of the tax to 3.1% from 6.2%; employers with payrolls of less than $5 million a year would also see their share of the payroll tax cut in half to 3.1%. This would expire in January 2013, or less than 15 months from now.  

A slightly smaller (to 4.2%) payroll tax cut already took effect in January of this year, and yet the unemployment rate has remained at or above 9% all year. Payrolls failed to expand because employers don't generally hire workers for a year.  

Meanwhile, as amended last week by Senate Majority Leader Harry Reid, the bill is financed by a new 5.6% surtax on millionaires. So a bill that the White House has sold as a temporary $265 billion tax cut for employers is financed with a permanent almost half-trillion-dollar tax hike on businesses and investors. What a deal.  

And a bill advertised in the name of job creation is now primarily about the new Democratic campaign theme of redistributing income. If history is any guide, that ploy will send employers and investors into a further hiatus, destroying far more jobs in the private economy than the government-financed jobs it hopes to create.  

The overall result would be a net permanent tax increase on businesses starting in 2013. Few economists believe that unemployment will be less than 8% in 2013, and Mr. Obama's own budget doesn't predict it. It's doubtful Lord Keynes would buy a $447 billion tax hike when 14 million Americans are out of work. If the Bush-era tax rates for those who earn more than $250,000 ($200,000 for singles) also expire in 2013, as they are now scheduled to do, the highest tax rate will exceed 50%, including state taxes.  

As for the budget impact of all this, higher tax rates have generally not led to big revenue bonanzas. In the 1970s, when the highest tax rate was 70%, the richest 1% of earners paid a little under 20% of all income taxes. Today with a 35% top tax rate, the richest 1% pay 38%, as they have less incentive to shelter their income or seek tax-free investments.  

The bigger problem is who will pay these higher taxes. It isn't mostly Warren Buffetts. Treasury Department data for 2007 show that of the 392,000 taxpayers with incomes exceeding $1 million, more than 300,000 have business income and most of those met Treasury's definition of "business owner." Good luck taking money out of business earnings and expecting those firms to hire more workers.  

The plan also includes $175 billion in new spending, according to the Congressional Budget Office, with $44 billion for extending unemployment insurance. This program, which now offers workers up to 99 weeks of unemployment benefits, has already been extended five times since the recession began and always with Democrats selling it as a jobs stimulus. What it has stimulated so far are longer spells of unemployment, with 44.6% of those who are now jobless out of work for at least six months.  

There is also more than $100 billion for new schools, public works, and aid to states and cities. At least Democrats aren't calling any of this "shovel-ready." States that received the stimulus cash in 2009 and 2010 fell off a funding cliff in 2011, and they had bigger fiscal holes and more layoffs this year than they would have had without the federal aid. Uncle Sam's transportation spending has almost doubled over the past decade, and Congress is already slated to pass a transportation bill of $150 billion or more next year. These provisions are giveaways to public unions to preserve as many state and local government (and dues-paying) jobs as possible before Election Day.  

The Obama-Reid plan is a parody of a jobs bill, full of political talking points but very little to create jobs or lift growth. If Republicans want to campaign as the pro-growth party, they ought to be unified in opposing it. As for Senate Democrats, it will be instructive to see how many running for re-election in 2012 are willing to put growth and prosperity over redistribution and union politics. 

By CARL BIALIK, Wall Street Journal, October 18, 2011

Praise of small businesses as the engine of the American economy is as much a part of political campaigns as bus tours, small-town diners and recycled stump speeches.   

This week, no fewer than five of the eight Republican presidential candidates participating in a debate in Hanover, N.H., spent time talking about the importance of small businesses. No wonder, given that politicians through the years have credited small businesses with creating anywhere from 60% to 80% of new jobs.    

So, do small businesses deserve their job-generating reputation? In short, yes.  

Armed with new tools for tracking job creation, the Small Business Administration estimates such firms create about 65% of the nation's net new jobs—jobs created minus jobs eliminated. And economists generally agree the figure is sound given the SBA's criteria. There are big caveats, though, ranging from how small business is defined to how much the jobs pay and how long they last.   

The first question: How small is small? The SBA's Office of Advocacy, which produces the statistics, counts small businesses as those with fewer than 500 employees, which covers far more than garage tech start-ups and mom-and-pop stores. By that definition, 99.6% of the nation's 4.8 million private employers that have been monitored for job creation by the Bureau of Labor Statistics for nearly a decade are small businesses.      

"What they call a small business is not what anyone else calls a small business," says David Neumark, director of the Center for Economics and Public Policy at the University of California, Irvine. 

Joseph M. Johnson, chief economist of the SBA's Office of Advocacy, disagrees. "SBA began using 500 employees as an overall definition for small business because it was the most common size standard," he says.   

One company that straddles the line between small and large is PROS Holdings Inc. in Houston. It is included in the SBA small-business stats with about 480 employees, and was founded by a husband-and-wife team in 1985. But the pricing-software maker looks like a large business today, as it has been traded on the New York Stock Exchange since 2007 and has a market capitalization of more than $400 million.      

Those factors "make you scratch your head and say, 'Does that sound like a mom-and-pop shop?' " says Tim Girgenti, chief marketing officer of PROS. However, he says the company exhibits some characteristics of a small business, such as a board that still includes its founders.   

The European Union defines small- and medium-size enterprises as those with fewer than 250 employees. Small businesses, a subcategory, have fewer than 50 employees, according to European Commission spokesman Andrea Maresi. Define small businesses that way, and they created 32% of net new U.S. jobs since September 1992, when collection of such data began.   

Beneath the 65% figure cited by the SBA is a lot more job creation and destruction than is immediately evident. Businesses with fewer than 500 employees accounted for about three of four jobs created since 1992, according to a paper from the Federal Reserve Bank of St. Louis published in April.      

But many don't last long. For instance, employers with fewer than four workers have accounted for roughly 5% of all private-sector workers since 1992, but 15% of all job creation and 15% of job destruction in the private sector in that period, according to BLS.      

Such churning of jobs is hailed by economists as creative destruction, allocating resources to those sectors of the economy that can best use them. To workers, it is destructive to wealth accumulation and career advancement.      

Small-business jobs also pay less. Last year, average weekly wages for employees at establishments with fewer than 100 employees ranged from $679 at shops with five to nine employees, to $815 at those with 50 to 99 employees, according to the Bureau of Labor Statistics. Average weekly wages topped $1,000 in all categories with at least 250 employees.   

William Dunkelberg, chief economist of the National Federation of Independent Business, an industry association, said it doesn't make sense to compare the wage averages.      

"Not all of the people who are working at nail salons and barber shops could work for Eli Lilly & Co., but we all want them to have a job," Dr. Dunkelberg says. "In fact, we all need them to have a job."   

A recent study called into question whether size should matter at all when comparing businesses and their contribution to job creation.      

The paper—co-authored by University of Maryland economist John Haltiwanger and two Census Bureau economists—confirmed that small businesses create more net new jobs, per employee, than do bigger businesses.      

But the effect vanishes once each company's age is taken into account. It is young businesses that outperform old ones, according to the paper. Size isn't the important factor.  

If you control for age, "you wipe out that effect" of small businesses creating a disproportionate share of net new jobs, says Prof. Haltiwanger. "There's no systematic relationship. If anything it goes the opposite way of conventional wisdom."

My Colorado colleague, Republican Rep. Cory Gardner, recently asked the Environmental Protection Agency’s assistant administrator, Mathy Stanislaus, whether the agency’s economic analysis had considered the effect of proposed regulations on jobs. “Not directly,” Stanislaus answered.  

Unfortunately, this is not the only example — nor is the EPA the only government agency — to have failed to adequately consider the effect of their proposals on small businesses and jobs.  

We held a hearing recently in Grand Junction, Colo., to examine this issue: burdensome federal energy regulations and their detrimental effect on small businesses, jobs and consumer prices.  

President Barack Obama has been doing a lot of talking about how vital small businesses are to job creation and the economy.  

He’s right.  

Yet more than 43 major regulations were proposed last year, and an additional 219 are in the pipeline —  each estimated to cost more than $100 million.  

In addition, the administration this year proposed seven new regulations that would likely each cost the U.S. economy more than $1 billion annually, if implemented. Four were put forward by the EPA.  

A recent study showed that regulation burdens to the American people cost about $1.75 trillion annually — including $281 billion for environmental regulations that disproportionately hit small businesses. On average, government regulations cost small businesses nearly $10,585 per employee.  

When will this stop? Americans need jobs and affordable energy now. It is clear that current energy policies are not working when the costs of nearly all products, from food to gasoline, have increased. This toxic mix has done nothing but drive our economy further into the ground, hurting families that are already struggling.  

David Ludlam, director of the West Slope Colorado Oil & Gas Association, testified at the hearing about the president’s jobs bill.  

“What stood out to our organization,” Ludlam said, “was the fact that no mention was made, and no meaningful policy was proposed, to allow America’s energy sector to get busy creating energy jobs. … We can give the administration a more practical jobs plan for America that is quite simple: Remove regulatory roadblocks to ‘shovel ready’ energy projects in Western Colorado. We believe this would be a great first step to creating high-paying jobs.”  

It’s not regulations alone that are hindering job creation and energy production — the permitting process for new energy leases is also cumbersome. Industry experts tell me that this permitting process is slow, costly and burdensome —  often taking years to complete. Certain policies and procedures, for example, have held up development seven or eight months on an 11-month lease.  

This defies common sense. You wouldn’t lease a car for 11 months that you could only drive for the last three.  

David White, the county commissioner of Montrose, Colo., said red tape and misguided “stimulus”  policies have delayed the building of a new energy mill and hampered the local businesses that will support its operation — blocking “1,300 high-paying jobs” from being created “in a county with a workforce of just over 15,000 people.”  

As White put it, “Excessive government regulations and poorly planned policies are preventing our nation from reaching vitally important energy independence, killing existing jobs and hampering new job creation.”  

The United States has been blessed with abundant natural energy resources and the technology to use these resources in a safe and environmentally sound manner. It is beyond all common sense why the Obama administration continues to rely on volatile foreign oil and push costly regulations, even as our energy prices skyrocket and unemployment remains intolerably high.  

We must embrace an “all of the above” energy platform that includes traditional resources like oil, natural gas and clean coal — in addition to renewable and alternative resources like wind and hydropower. Unlocking our vast natural resources here at home would lead us closer to energy independence using skilled American workers, while laying the foundation for a sustainable energy future.  

During tough economic times, it is essential that we all work toward practical solutions that can protect our environment — while leading us closer to an all-of-the-above energy plan.  

Rep. Scott Tipton (R-Colo.) is chairman of the Agriculture, Energy and Trade Subcommittee of the Small Business Committee.

October 21, 2011

CONTACT: 866-788-9129

FOR IMMEDIATE RELEASE 

Poll: Pessimism Toward Government Grows; Concern on Taxes and Spending Persists  

Pessimism among adults nationwide about the impact of recent government policies on job creation has grown. In fact, the vast majority (84%) of Americans now believe that recent government policies have either hurt job creation or have had no effect; while the percentage of those who believe that government policies have helped job creation was only 17%.

Notably, only a third of Democrats held this view. The poll of a representative sample of 1,011 adults was conducted October 7-10, 2011 by YouGov for the American Institute for Growth, a non-partisan 501(c)3 policy organization comprised of American entrepreneurs.

The poll also found that public sentiment on regulation, taxes and spending has remained constant throughout the summer and fall: 64% of those polled –  including 71% of Independents – indicated that they were worried that there was too much regulation, taxes and government spending, clearly not assuaged by promises from President Obama and Congress that regulations would be scaled back. In June 2011, 65% of American adults felt the same – virtually unchanged.

Persistent national unemployment was the top economic concern at 52%, while the growth in government spending was the top concern for 36% of those polled. 

While some in the political class have taken to criticizing private businesses for being overly concerned with their individual priorities and not “doing their part” to help get the economy moving again, 70% of those polled, including 76% of Independents, support businesses staying focused on what is best for their business – only hiring when additional workers are needed.

See the full results HERE.

American Institute for Growth (JCA) is a nonprofit, nonpartisan 501(c)3 organization composed of current and former major CEOs and entrepreneurs whose goal is to defend and preserve the system of free enterprise in the United States for future generations so entrepreneurship can flourish, resulting in job creation. More information can be found at: jobcreatorsalliance.org 

By Daniel Garza, Fox News, October 23, 2011

By Alicia Ciccone, October 25, 2011

Government regulations take the biggest toll on small businesses, according to a new Gallup poll.   

The Gallup Small Business Index, which polled more than 600 small-business owners in early October, showed that of all the possible obstacles facing small businesses, 22 percent felt government regulations caused the biggest problem, while 15 percent noted consumer confidence and 12 percent blamed a lack of consumer demand. Other issues cited by business owners included a lack of credit availability and poor leadership by the government. Surprisingly, the lack of jobs in the market was noted as the least problematic.  

Many small-business owners are still worried about the fate of their business, with one in three owners saying they are moderately or very worried about going out of business. A similar number of small-business owners were moderately or very worried about competing with large or global competitors, not being able to hire employees or being unable to pay employees. Thirty percent fear they will have to cut down the size of their staff in the coming year.  

Chief Economist Dennis Jacobe, the author of the study, said, "Given this situation and the fragility of the economy, I think a moratorium on new government regulations would be beneficial. We can leave arguments about the public benefit of new government regulations vs. the cost to business for another –- better – economic situation."  

Although many small-business owners will continue to face problems in 2012, many are just as worried about the long term. According to the poll, 67 percent of the owners are worried about not being able to save enough money for retirement, while nearly 50 percent fear they don't spend enough time with family or pursuing personal interests.  

Small-business owners continue to hope for a turnaround, with 15 percent noting that a growth in sales will help their business to grow and thrive in the coming year. Other positive changes they'd like to see include job creation (14 percent) and fewer government regulations (12 percent), which will motivate them to hire new employees.  

As far as whether more businesses felt positive or negative about the current economy, the poll indicates that most have been feeling pretty neutral since last summer and simply doing what they can to stay ahead. Many look forward to the upcoming holiday spending season, though another Gallup poll may indicate they have little to look forward to. According to the poll, Americans plan on spending an average of $712, the same as last year and about $200 less than in 2006, while one-third of Americans plan on spending $500 or less on holiday gifts. "This means another tough time this holiday for small businesses as they battle to get sales," Jacobe said. "Small businesses need an improved economy and new jobs in order to not only survive but thrive in 2012."

http://www.forbes.com/sites/peterferrara/2011/10/28/the-gop-jobs-plan-vs-obamas/   

Senate Republicans have taken the lead in proposing a Jobs Plan alternative to President Obama’s, in the form of the Jobs Through Growth Act, led by Senators John McCain (R-AZ), Rand Paul (R-KY), and Rob Portman (R-OH).  Republicans are remarkably unified behind these economic and jobs growth ideas, with House Republicans having already long supported or even passed several components of that plan.   

The 28 components of their program add up to exciting prospects for finally sparking the long overdue economic recovery, based on proven economic logic, and proven experience concerning what works in the real world.  Most important are the proposals for both corporate and individual tax reform, closing loopholes in return for reducing the rates.   

Lower marginal tax rates are the key to providing the necessary incentives for economic growth and prosperity.  The marginal tax rate is the rate on the next dollar to be earned from any investment, enterprise or productive activity.  That is the key because it determines how much the producer is allowed to keep out of the next unit of what he or she produces.   

At a 50% marginal tax rate, the producer can keep only half of any increased production.  If that rate is reduced to 25%, the portion the producer can keep grows by 50%, from one half to three fourths.  That powerfully increases the incentive for more productive activity, such as savings, investment, starting new businesses, expanding businesses, creating jobs, entrepreneurship, and work.   

The Republican Jobs Plan involves closing the special interest loopholes that enable Obama corporate cronies such as General Electric to get away with paying no taxes on $14 billion in corporate profits, in return for reducing rates to internationally competitive levels.  The U.S. suffers virtually the highest corporate tax rate in the industrialized world, nearly 40%, with a 35% federal rate, and another nearly 5% in state corporate rates on average.   

Even Communist China enjoys a 25% corporate rate.  In the supposedly mostly socialist European Union, the corporate rate on average is even lower than that.  In formerly socialist Canada, the federal corporate rate is 16.5%, going down to 15% next year.   

The GOP Plan would reduce the federal 35% rate to 25%, which is the minimum reduction to restore international competitiveness for American companies.  Note that closing loopholes may well raise the average corporate rate, on which Democrats and liberals have focused, but it is the marginal tax rate that drives the economy, as discussed above.   

The GOP Jobs Plan also includes reducing the top personal, individual income tax rate to 25% as well, in return for closing loopholes.  The Ryan budget already passed by the House would apply that rate to family incomes over $100,000, with a 10% rate applying to incomes below.  Those rate reductions would powerfully boost incentives as well, as proven by the dramatic response to the Reagan tax rate reductions in the 1980s, discussed further on.   

Another component of the plan would eliminate the double taxation of U.S. corporate profits earned abroad by the U.S. “worldwide” corporate tax code, which adds U.S. taxes on top of the taxes on foreign profits by the host country.  The GOP plan calls for adopting the “territorial” tax code of most our international competitors, which allows profits to be taxed in the country where they are earned, and not again when they are brought home. That would unlock for reinvestment in the U.S. the $1.4 trillion in American corporate profits earned overseas that remain parked there to avoid U.S. double taxation.   

The GOP Jobs plan also recognizes the enormous problem of excessive, runaway regulation, which increases the cost of production, and so further discourages it.  Reducing such costs would consequently increase production, economic growth, and jobs.    

Step one in the plan to reduce such regulatory burdens is to repeal Obamacare, with its employer mandate adding to the cost of each job by requiring employers to buy more expensive, politically driven health insurance coverage for every employee.  That repeal would also reduce future taxes and spending by trillions as well.    

Further critical relief would result from the GOP Jobs plan plank to repeal Dodd-Frank, which is threatening to squelch credit for businesses and consumers essential to jobs and recovery.  The GOP proposal cites research showing that higher costs for financial services resulting from Dodd-Frank would cost the economy nearly 5 million jobs by 2015.   

Another critical area of overregulation is energy.  The Republican program would require the Interior Department to move forward in order to free up leasing and development of drilling on public lands onshore.  It also eliminates EPA foot dragging on air permits necessary for offshore drilling, and removes EPA authority for unnecessary and burdensome greenhouse gas regulation altogether.  This deregulation would ensure a steady supply of low cost energy, essential to booming economic growth.   

Also in the proposal is the REINS (Regulations from the Executive In Need of Scrutiny) Act, which would require Congressional approval of all major federal regulations imposing more than $100 million a year in costs.  This will reestablish the original Congressional check on Executive power, and democratic accountability for regulatory burdens, so politicians can no longer hide behind faceless bureaucrats to evade public scrutiny for regulatory drains on our freedom and prosperity.  This would provide an important solution to excessive regulatory burdens and costs across the board.    

The Tea Party will favor the plan’s plank for a Balanced Budget Amendment to the Constitution, which would include necessary tax and spending limitations in the Constitution.  Also included is a statutory line item veto, giving the President more power to cut spending.  Reduced government spending, deficits and debt will reduce the government drain on resources in the private economy needed to create jobs and growth.   

Finally, the plan even includes a provision for free trade, giving the President renewed fast track authority to negotiate further trade agreements eliminating foreign trade barriers and opening new markets for American goods.  For nearly 3 years, President Obama failed to even send to Congress free trade agreements President Bush had negotiated with South Korea, Colombia and Panama.  But that didn’t stop him from political rhetoric blaming Congress for failing to pass them, though Congress did approve them within weeks of Obama finally submitting them.  That abusive rhetorical style veers into dishonorable.   

This GOP program is an exciting, comprehensive strategy for creating another generation-long economic boom.  It includes all the components of Reaganomics under Congressional control – lower tax rates, deregulation, and restrained spending.  Besides the economic logic of each of these components discussed above, the experience with Reaganomics proves the plan will work within a year or so of adoption to get the economy booming again.   

After Reaganomics was adopted in 1981, the economy took off on a 25-year economic boom in late 1982, what Art Laffer and Steve Moore have rightly called the greatest period of wealth creation in the history of the planet.  Twenty million new jobs were created in the first 7 years alone, even while an historic inflation was tamed.  American economic growth during the 80s was the equivalent of adding the third largest economy in the world, West Germany, to the American economy.   

By contrast, Obama’s Jobs Plan is recycled, brain dead, Keynesian economics already tried and failed throughout the Obama Administration, and all around the world for decades before wherever it has been tried.  It is about half the size of Obama’s nearly one trillion dollar 2009 so-called stimulus plan, but contains otherwise the same policies.  That 2009 stimulus didn’t stimulate anything except runaway government spending, deficits and debt   

Part of the jobs plan is devoted to increased government spending on supposed infrastructure, which only recalls the laughable “shovel ready” jobs of Obama’s 2009 stimulus (even Obama has joked about it).  Another part is increased spending to bailout spendthrift Democrat states, which Obama calls hiring more teachers, firemen and cops (a state and local government function, not a federal function).   

But economic growth is not based on increased government spending, a fallacy which Wall Street Journal senior economics writer Steve Moore has rightly labeled “tooth fairy” economics.  That is because the money for such spending needs to come from somewhere, and so drains the private sector to the extent of such increased government spending, leaving no net effect in any event.   

What drives economic growth and prosperity is incentives for increased production, as Reaganomics proved.  Obama’s assault on such incentives is why trillions are sitting on corporate and bank balance sheets, and America is suffering a capital strike and capital flight. The Occupy Wall Street protestors in threatening property and profits are just further undermining incentives and contributing to that capital strike and capital flight, which only contributes further to extended and increased unemployment.   

The other half of the jobs plan includes temporary payroll tax cuts, which are a continuation and expansion of temporary payroll tax cuts Obama convinced the December, 2010 lame duck Congress to adopt for this year.  But such temporary tax reductions do not stimulate economic growth and jobs either, as permanent cuts and incentives are necessary for permanent jobs.  That was just proved by the failure of this year’s temporary payroll tax cut to promote the long overdue recovery.   

But even worse than the 2009 stimulus is that this current half stimulus echo is accompanied by Obama’s proposal for $1.5 trillion in permanent tax increases.  That now includes Obama’s support for a 5% millionaires’ surtax.  Those permanent increases only further reduce incentives for production, and only contribute further to economic downturn and stagnation under any economic theory.   

Those tax increases, moreover, would come on top of all the tax increases Obama has already enacted under current law for 2013, which major media institutions as well as most of the public are unaware.  In that year, the Obamacare tax increases go into effect, and the Bush tax cuts expire, which Obama has refused to renew for the nation’s job creators, investors, and more significant small businesses.  Under those tax increases, the top tax rates for every major federal tax, except the corporate income tax, already virtually the highest in the industrialized world, with no relief in sight under Obama.   

In sharp contrast to Reaganomics, such Keynesian Obamanomics has already failed miserably to generate a timely recovery consistent with the history of the American economy.  Before this last recession, since the Great Depression, recessions in America have lasted an average of 10 months, with the longest previously lasting 16 months.  But here we are 46 months after the last recession started, and still no real economic recovery, with unemployment still over 9%, the longest period of unemployment that high since the Great Depression.   

Moreover, it cannot be said this is because the recession was so bad, as the experience in America has been the deeper the recession the stronger the recovery.  Based on these historical precedents, we should be nearing the end of the second year of a booming economy right now.  In this crisis, for Obama to now just advocate more of the same, with only new, warmed over rhetoric, is a complete abdication of leadership.  Moreover, at this point, outdated economists still peddling hoary Keynesian fallacies should be subject to civil liability for fraud.