While many large companies are starting to hire again, they’re doing so at an extremely cautious pace. Small businesses, which employ about half of all private sector workers, are still struggling to hire as they try to get loans from stingy banks still smarting from their losses in the subprime home mortgage markets. The direst employment projections are for state and local governments, which after the expiration of the 2008 and 2009 stimulus programs, are facing massive deficits. Reluctant to raise taxes to balance the books, governors and mayors will soon be laying off hundreds of thousands of teachers, law enforcement officers, and other public servants.
What can the government do to resolve these issues? While the president’s vision of an alternative energy-driven new economy is intriguing, it won’t lead to 7.5 million new jobs anytime soon. Besides, the days of stimulus are clearly over with Republicans controlling the House. Reforming the corporate tax code might provide more incentives for businesses to hire, but that will take years to debate and implement. The Republican mantra of reducing regulations? Unlikely with Obama in the White House (and frankly, much of our industry needs regulating – let’s not forget the Gulf oil spill or the lost West Virginia miners too quickly).
While new job-creating federal policies are unlikely, there is another way to put Americans back to work, and that is to get our country back into the business of making things. This means not just selling things to each other, but exporting more goods to other countries with newly well-heeled citizens, like China, South Korea, and India, as well as to South America. We already export more stuff than any other country in the world (except for China), including a lot of airplanes and automobiles, pharmaceuticals, farm goods, and fuels.
Obama wants to double our exports within five years – a lofty goal, considering we export almost 1.3 trillion dollars in goods now. It’s been done before, but typically over a ten year period, not five. This is why trade agreements with South Korea, and with Panama and Columbia, are in the works. Both parties in congress seem willing to debate, and hopefully pass these agreements. The big jackpot, however, is China, with its newly wealthy behaving a bit like ours did in the 1950’s and 1960’s – all wanting their share of the new Chinese dream. The President and congress need to find ways to carefully push our way further into these markets as soon as possible.