Since President Obama is convening a jobs summit, NRO decided to hold its own. Peter Ferrara, Burton Folsom, Jr., Nicole Galinas, Rea Hederman, Jr., Reihan Salam, Stephen Spruiell, and Sam Staley weigh in with recommendations. Listed is a summary of these.
Cut taxes - income, payroll, corporate, capital gains and estate. (Most agree on this).
Allow immediate expensing for business equipment.
Set up a permanent personal-account option for that portion of payroll taxes for younger workers, with the personal accounts substituting for an equivalent portion of future retirement benefits. This would provide a continuing gusher of new savings for capital investment, resulting in more jobs and higher wages,
(paid for by) Abolishing TARP and returning the money, ending all bailouts, and repealing still unspent “stimulus” funding.
Offer low-wage employer tax credits designed to lower the cost of hiring and retaining workers.
Reduce government spending to eliminate future inflation and the drag on the economy.
Spruiell says the key to recovery is recapitalizing the banks.
Corporate- and payroll-tax cuts would be nice, and make no mistake: They would lead to more hiring in the short term. But the surest path to long-term job creation is through a stable economic recovery. That can’t happen until the Obama administration forces a true recapitalization of the banking system.
Businesses can’t create jobs without access to financing, and right now, the banks aren’t providing it. The money that the Bush and Obama administrations pumped into the banks failed to recapitalize the system adequately; it merely bailed out the banks’ creditors at taxpayer expense. A true recapitalization of the banking system would require some bond holders to swap debt for equity and leave some equity holders with nothing. Naturally, these guys would rather ride out the crisis on the taxpayers’ dime, hoping that a miracle recovery will restore asset prices to the values they attained at the height of the credit bubble.
The banks have used the bailouts as a cushion to avoid having to restructure all the bad debt that’s still clogging up the system. The Obama administration could expedite the restructuring process by requiring bailed-out banks to accelerate write-offs. It could manage the resulting insolvencies by protecting depositors and forcing stakeholders to shoulder their fair share of the losses.
Instead of coming up with a banking plan, however, the administration has changed the subject to health care and global warming; when Obama does turn his attention to the financial crisis, he treats the public to executive-compensation sideshows and pious lectures about greed. In the meantime, the banking system is still holding its breath, waiting for a recovery that will probably not occur, and job-seekers are the ones who are suffocating.
These ideas are non-starters at Obama's summit since they involve the rejection of most of his agenda. As Newt Gingrich points out on his website, Obama's jobs creation efforts are fatally hindered by three factors.
1) Ideology - wealth redistribution not wealth creation
2) Interest Groups - pandering to lawyers, unions, government employees
3) Personnel - less than 10% have private sector experience, little job creation experience