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  • Obama to Obama Jobs Council: I Disagree

    President Obama’s Council on Jobs and Competitiveness released its third report January 17 entitled “Road Map to Renewal,” a worthy description of serious issues affecting the American economy coupled with set of proposals that, with few exceptions, can best be described as pretty thin gruel.

    The council—chaired by Jeffrey R. Immelt, the chairman and CEO of GE—was obviously constrained in many cases by political considerations imposed on it either by the Obama Administration or by itself as it recognized the political season.

    However, this report will likely be best known for the quickness with which its own sponsor, President Obama, loudly “dissed” it, in the urban vernacular.

    At least with Obama’s 2010 Simpson–Bowles deficit commission, the President waited a couple of months before embarrassingly ignoring the commission’s recommendations in toto. In the case of the Jobs Council report, the President set a new land speed record of about 24 hours before explicitly repudiating one of the council’s key recommendations.

    The council’s report sensibly observes that the United States will need to “optimize all of its natural resources and construct pathways (pipelines, transmission and distribution) to deliver electricity and fuel.” One of the council’s reasonable recommendations from an earlier report was to “streamline environmental permitting” to expedite the review of infrastructure projects, such as transmission and distribution pipelines.

    On January 18, the day after the release of the Jobs Council report, President Obama killed the Keystone XL pipeline that would have carried oil from Canada’s bounteous fields to waiting Gulf Coast refineries, creating tens of thousands of jobs now and greatly reducing the nation’s exposure to Middle East oil for decades to come. Now, thanks to Obama’s cowtowing to the environmental lobby, the Canadians will apparently build a pipeline to the Pacific Ocean to ship the oil to China for their economy to use. No doubt the Chinese will appreciate the magnanimous gesture, but it seems unlikely that the President’s council, not to mention America’s struggling workers, will do likewise.

    The Keystone fiasco aside, one of the more curious elements of the council’s report is its emphasis on American manufacturing. A common perception is that America’s manufacturers are steadily and inexorably losing ground to foreign competition, a perception reinforced by the persistent reminder of foreign car brands on the nation’s highways and a steady decline in manufacturing employment. Fortunately, the perception is largely wrong.

    It is certainly true that employment in manufacturing has fallen in recent decades. The council’s report observes that in 1980, manufacturing accounted for about 20 percent of American jobs, whereas the comparable figure today is about 9 percent. At the same time, manufacturing’s share of total production has remained roughly stable and, in fact, the United States and China are the only countries to have gained significant world share in manufacturing in recent years. The line that connects and explains these two dots of strong manufacturing and manufacturing job loss is the rapid increase in labor productivity, the result of innovation, and global competitive pressures.

    With this strong performance in manufacturing, why, then, does the report suggest that we need to tilt the nation’s economic policy focus even more toward manufacturing? To be sure, as the report affirms, “Manufacturing matters.” But so, too, do health care services, financial services, and many other sectors. The extra emphasis placed on an apparently relatively healthy economic sector loudly smacks of an unjustified and unjustifiable policy bias and an unhealthy sense of government-knows-best industrial planning.

    In other areas, the report includes a useful discussion of the role of federal regulations and “how best to strike a balance between competing public objectives” of job creation on the one hand and the need to achieve regulatory intent on the other. Unfortunately, the preponderance of the discussion and recommendations involve trying to rationalize the regulatory review process for new regulations, which are grains of sand compared to the massive mountain of existing regulations. The council’s focus should have been on how to clear away some of the mountain.

    Only the third recommendation in the regulation discussion touches on the mountain, calling for a “retrospective review of rules and their impact,” directing the badly outgunned and undermanned Office of Independent Regulatory Analysis (OIRA) within the White House’s Office of Management and Budget to “provide guidance on how agencies should prioritize the review of rules and develop and implement a system for retrospective review in the future.” In effect, OIRA is to develop a plan for a system to devise a review of how to study what agencies might like to consider. That’s Washington-speak for “do nothing.”

    The one really bright spot in the report is the call for tax reform, especially the need to simplify the corporate income tax and reduce the corporate income tax rate, which, as of April 1 (when Japan finally reduces its rate), will be the highest in the industrialized world at 39.2 percent. Unfortunately, the report is silent on the closely related issue of the need to reform the rest of the tax system, especially the taxation of non-corporate businesses, such as partnerships and sole proprietorships. It is unreasonable and implausible to imagine that the federal government could or would substantially simplify the tax system and cut the tax rate facing the largest businesses while leaving small and medium-sized businesses stuck with the old, complex system and high tax rates.

    The Jobs Council has added useful ideas and recommendations to the nation’s policy menu. Many of these are quite modest in scope, and some are misguided or suggest an errant focus, but overall the council’s work has borne fruit. One can only hope that some of the better ideas from the council’s report receive a moment’s consideration in the White House before being squashed by President Obama, as with the Keystone decision.

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    10 Responses to Obama to Obama Jobs Council: I Disagree

    1. Bobbie says:

      Why is the President yelling "we can't wait" in Disney world when he's holding the country back from jobs that don't have to wait? tourism isn't productive when no one is using their own money! Does he really think that lowly of the world to have to wait for his endorsement that has nothing to do with his constitutional duties?
      how about this line "we're not going to wait!" The only thing stopping this country is UNCONSTITUTIONAL GOVERNMENT! Why are we letting them hold us back? The refusal of the pipeline leads to greater suspicion that his daily acts of incompetence, ignorance, corruption will eliminate the next election day! Please save America!

      • Slick says:

        Just suppose that "his daily acts of incompetence, ignorance, and corruption" are actually being done DELIBERATELY!!!! I have no doubt that we must NOT under estimate this man or his capabilities. That leaves only one way to describe what he is doing to our country: by design he is doing everything within his power to put this country into bankruptcy and destroy our Republic. And that, my friend, is the beginning, the middle and the end of the story!

    2. David says:

      I agree Bobbie not only will it eliminate the nest election but again he has made a move to help countries that in the near future we could be in some type of conflict with or China may use take that oil and see it to those to plot to destroy us. As you mentioned the big issue is here he had a chance to create thousands and thousands of American jobs, I feel like he is the capt of the titanic and the U>S> is the titanic.

    3. The jobs council should quit. They exist only for appearances.

      • azwayne says:

        They are actually another money laundering arm, all administration groups are campaign fund raisers., stealing tax payer funds by billions.

    4. Lloyd Scallan says:

      I don't understand why anyone can question Obama's true intent to destroy this nation as we know it. How much more proof do the people need. Those that support Obama and his policies are working hand in hand with the world powers that put Obama in the White House to collapse our economy in favor of socialsim.

    5. Blair Franconia, NH says:

      What does he disagree with? The head of his Jobs Council, Jeffrey Immelt's, decision to outsource American
      jobs to China? YEAH, RIGHT!

    6. Mutantone says:

      Obama is a tool for the Chinese letting them gather the oil from the Keystone pipe line and then giving Soros Oil Millions of our tax dollars knowing full well that they were going to go to the Chinese as well. He has used the EPA to squash oil production here at every level cutting the USA from the coastal drilling, to inland sites that the EPA is now blocking at his behest but allowing China to drill here inside the USA we need to look and see how much they paid for Obama's support as it is obviously becoming clear that Obama is getting something for blocking our oil production

    7. Werner Loell says:

      How can we provide constructive criticism if the only folks (apparently) engaged in discussing the future of American industry is the Jobs Council? How much input have they solicited from the rank and files of the federal and state agencies, NGOs, academia, and present and former scientists and bureaucrats that performed their duties IAW rules and regulation, and mission objectives? I provided input to the VP some time ago, but no response or follow-up. No one has time to look at the entire system as time is of the essence driven by the political calendar. It is time to regroup and use not the "natural" resources, but resources of our brightest and most honest scientists and experts. But, I am again only deluding myself thinking anyone with gravitas will actually read this nor respond.

    8. Gerry Crews says:

      The President and his Cabinet are confused by competing interests. No doubt Mr. Obama wants a strong economy, but he is unwilling to oppose his anti-business constituents and adopt pro-growth policies. Every step forward is met with three steps backwards, then a reversal of his small forward progress. President Obama has rejected his appointed committees' recommendations to repair our national budget and now improve the business climate to grow jobs. He could not have given the Republicans a better argument why this country cannot afford to re-elect him, even though the liberal press avoids these stories.

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