Governor Romney’s Jobs Plan……..In summary, Governor Romney’s plan is a powerful political tool for his campaign. It shows that he has detailed plans and that he willingly puts them in front of the American people well ahead of other Republicans and not in response to the President’s plan but in front of it.
Most of Governor Romney’s proposals will have a positive impact on job growth. I especially like his strong policies against China’s unfair trade practices. However, some of his policies will actually have a negative impact on jobs and others will exacerbate globalism that is a chief cause of our jobs problem. Additionally, the majority of the Governor’s policies are longer term in nature and will not have an immediate impact on jobs.
America must enact the Governor’s policies. We have to incentivize re-investment in American and mitigate capital arbitrage to China. However, his policies are not likely to create the rapid turnaround that his advisers expect. The main reason for this is that none of his policies deal with correcting the cause of our major down turn, mainly that it is a monetary collapse similar to 1929 and 1871. To quickly reverse our direction, America must re-vitalize debt, credit and demand balances that a growing, healthy economy requires.
To quickly turnaround our economy we must immediately deal with the debt overhang that exists in America’s housing and with the business and consumer credit that has been damaged by the monetary collapse. We must also immediately distributively prime consumer demand by placing workers throughout the millions of small domestic businesses to secure their incomes and to therefore lessen growth risk for existing or new businesses. Without dealing with these three areas simultaneously, the Republican ideas will be as impotent as the Democrats and the Feds combination of centralized stimulus and isolated quantitative easing.
In short, banks must be required to accept equity for debt, credit agencies must accept accelerated procedures for restoring credit, and the unemployed must be distributed throughout the millions of domestic small businesses to prime demand with low risk arrangements similar to my job voucher plan (www.jobvoucherplan.com) in a manner that resembles how a shot gun golf outing positions golfers at every hole for the start.
None of these critical recovery efforts exist in Governor Romney’s plan or in any Republican plans save partially in Congressman McCotter’s.
Below are a few posts that add a few details (much more can be found in my blog):
ON THE ISSUES:
FIVE BILLS FOR DAY ONE
The American Competitiveness Act
• Reduces the corporate income tax rate to 25 percent
– Should help but effective taxes are already much lower
The Open Markets Act
• Implements the Colombia, Panama, and South Korea Free Trade Agreements
– Uncomfortable without understanding details because so far our trade agreements have been a net loss for jobs in America
The Domestic Energy Act
• Directs the Department of the Interior to undertake a comprehensive survey of American energy reserves in partnership with exploration companies and initiates leasing in all areas currently approved for exploration
– Minimal impact to overall jobs
– Will increase development and oil field jobs
– More a benefit to our elites
The Retraining Reform Act
• Consolidates the sprawl of federal retraining programs and returns funding and responsibility for these programs to the states
-Out of left pocket into right, minimal impact
The Down Payment on Fiscal Sanity Act
• Immediately cuts non-security discretionary spending by 5 percent, reducing the annual federal budget by $20 billion
– Without transferring savings to the private market, will actually cost jobs in the near term
***Summary***Overall, the first five bills are more bark than bite
FIVE EXECUTIVE ORDERS FOR DAY ONE
An Order to Pave the Way to End Obamacare
• Directs the Secretary of Health and Human Services and all relevant federal officials to return the maximum possible authority to the states to innovate and design health care solutions that work best for them
– Will add more certainty to businesses and should have some positive benefit
– Repeal will lose additional jobs that were part of Obamacare
An Order to Cut Red Tape
• Directs all agencies to immediately initiate the elimination of Obama-era regulations that unduly burden the economy or job creation, and then caps annual increases in regulatory costs at zero dollars
– Potential to improve business environment overtime
– Has the potential for significant abuse
– The vagueness of the order gives businesses ability to manipulate the process
– Should have some positive job benefits
Order to Boost Domestic Energy Production
• Directs the Department of the Interior to implement a process for rapid issuance of drilling permits to developers with established safety records seeking to use pre-approved techniques in pre-approved areas
– Minimal job impact
An Order to Sanction China for Unfair Trade Practices
• Directs the Department of the Treasury to list China as a currency manipulator in its biannual report and directs the Department of Commerce to assess countervailing duties on Chinese imports if China does not quickly move to float its currency
– Too little, too late
– Has some positive potential for jobs
An Order to Empower American Businesses and Workers
• Reverses the executive orders issued by President Obama that tilt the playing field in favor of organized labor, including the one encouraging the use of union labor on major government construction projects
– No mention thus far about three big unions having major impact on America’s future, the Teacher’s union, Government Union, Doctor’s guild
– Should have some minimal job benefit
***Summary*** These measures should all have some positive impact but none are fast acting.
INDIVIDUAL TAXES
• Maintain marginal rates at current levels
• Further reduce taxes on savings and investment
• Eliminate the death tax
• Long-term goal: pursue a flatter, fairer, simpler structure
– Tax changes should add available capital for spending, reducing debt, and for investment.
– However, the changes in income tax are regressive leading to further concentration of wealth.
– Elimination of death tax adds capital to the wealthy.
– Without tying tax reductions to domestic investment, reducing taxes for wealthy will result in further extraction of wealth to the East
CORPORATE TAXES
• Lower the corporate income tax rate to 25 percent
• Transition to a “territorial” tax system
– Lower tax is better but average tax paid by corporations is already lower than 25 percent
– Territorial tax and current tax are both manipulations to help multinational corporations’ offshore investments.
– The territorial tax system will make companies more profitable, leads to more jobs but will incentivize additional off shore investment costing net domestic jobs.
REGULATORY POLICY
• Repeal and replace Obamacare and Dodd-Frank
• Review and eliminate Obama-era regulations
• Cap new regulatory costs at zero dollars
• Require Congress to approve all major regulations
• Reform legal liability system
– Repealing Obamacare will eliminate jobs but in long run may recuce costs if major elements are re-added. However, no-one is raising the issue of the Doctors’ guild monopoly costs
– Reviewing and capping regulatory costs – will add governance complexity but will have minimal impact on jobs early on
– Reform legal liability system – will have minimal positive effect on jobs
– Overall the regulatory policy should have a positive impact over time but will not have an immediate impact on jobs
EXPANDED MARKETS / CONFRONTING CHINA
• Implement pending Free Trade Agreements
• Conclude Trans-Pacific Partnership and pursue additional agreements
• Create Reagan Economic Zone
• Increase enforcement of existing law
• Impose punitive measures if unfair trade practices
– Nothing in the Governor’s plan suggests that pending free trade agreements will be a net benefit to the American people or a net increase in jobs. Potentially, because the trade agreements were developed under our current paradigm, they would cost jobs
– The Reagan Economic Zone for similarly situated industrial countries should be a positive job affect
– Governor Romney’s policy concepts regarding China are the most positive of his listed policies thus far.
ENERGY POLICY
Significant Regulatory Reform
• Streamline and fast-track approval processes
• Amend Clean Air Act to exclude regulation of carbon
Increased Production
• Conduct comprehensive survey of the nation’s reserves
• Open reserves to exploration and production
Research and Development
• Focus investment in basic research
• Utilize DARPA-like funding mechanisms
– Excluding regulation of carbon is a major savior of jobs but will not increase jobs
– Opening production is not a smart long term policy because it will not increase jobs significantly and consuming strategic reserves doesn’t reduce our costs and reduces future security
– Increasing research is good for the long term but will not significantly increase jobs in the short term
LABOR POLICY
• Appoint experienced and even-handed arbiters to the NLRB
• Guarantee businesses the right to allocate capital as they choose
• Protect right of workers to choose whether to unionize
• End funding of union political campaigns through paycheck deductions
– Union policies are balanced but will not have a major impact on jobs
– Policies do not deal with major union issues impacting America’s long term growth including Government workers, teachers and the doctors’ guild
HUMAN CAPITAL POLICY
Retraining Workers
• Consolidate unwieldy sprawl of federal programs
• Return authority, responsibility, and funds to states for retraining programs
• Support private-sector participation in the process
The Best and The Brightest
• Raise visa caps for highly skilled foreign workers
• Give permanent residency to eligible advanced- degree recipients
– Romney domestic policies punt responsibilities to the states without positive affect on jobs
– Immigration focus on higher skilled persons should be a net benefit to America and should be a longer term jobs benefit but will have little immediate affect
FISCAL POLICY
• Cut federal spending and cap it at 20 percent of GDP
• Block grant Medicaid and pursue further entitlement reform
• Reduce the federal workforce
• Restructure the federal government
• Pursue a Balanced Budget Amendment
– The Governor’s policies are needed and must be done
– Long run, the policies will help jobs
– In the short run, the policies will negatively affect jobs
– The policies do not have offsetting job gains
Clif Carothers
Job Voucher Plan 