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Grading The President’s Jobs Speech – What He Said, What He Should Have Said

Last week the nation tuned into President’s Obama’s much hyped job creation speech to see if there would be any worthy ideas to try and break the constant high unemployment rate in the country.  Would he be bold and innovative or would it be the same basic, tired political tactics that have been tried and have usually failed to live up to expectations? 

The following discussion will compare what the President should have said and what he actually said. Unfortunately, the bottom line is that from a boldness, innovation, and courage perspective, the President came up well short of the goal line.

1) Infrastructure

As expected, the President did state that he wanted money and funding for infrastructure jobs to fix roads, bridges, dams, schools, etc. that were in need of repair, something many Americans expected and were supportive of. However, the President’s proposal came up short in two areas.

First, infrastructure spending and work done via the economic stimulus bill was woefully inefficient. According to various Associated Press investigations, thousands and thousands of government contracts were granted without competitive bidding. Half of the bridges that were repaired under the stimulus program were not in need of repairs. Powerful individual politicians in Congress snatched their share of the stimulus money and directed it to their voters regardless of whether of not the spending was actually fixing a real problem.

Millions of dollars from the stimulus plan were granted to companies that owed hundreds of millions of dollars in back taxes. No where in the President’s jobs speech do we get firm assurances that these atrocities have been recognized and will not happen again. He states that the money will be properly spent but we were promised that in the economic stimulus bill. The only way to insure that this potential pot of money is well spent is to give the decision on what projects are done to the states via a block grant of money, taking Congress out of the decision process altogether.

Second, the President does not show any detail on how to pay for this increment Federal spending. He says he will unveil a plan within a week or so. Thus, his performance on this topic is an incomplete. He gave no indication of specifics like reducing the Federal payroll back to 2008 levels, terminating unwanted and unneeded military projects such as the Osprey, terminating corporate welfare programs, ending agriculture subsidies, and directing high speed rail line funding to shorter term infrastructure needs.

Grade: Incomplete given the unnamed ways to fund this infrastructure spending that will be forth coming. However, worries about whether this will be another waste of money spent on things that do not need to be fixed, given the economic stimulus program, and the fact that the President has not taken Congress out of the decision making loop, continue to exist.

2) Obama Care

According to many credible opinion polls, the majority of Americans realize that Obama Care is an unfolding disaster. It will screw up existing health care insurance for tens of millions of Americans that already have coverage, it will significantly add to the deficit, it has created a large amount of tax and business uncertainty into the employment crisis in this country, and will not address the root causes of our escalating health care costs. Nowhere in his speech did he address this problem.

The President did make reference to the fact that we need to somehow reduce Medicare and Medicaid costs going forward in order to protect the long term solvency of both programs. He wisely wants to phase in any changes over time to ease the transition. However, he gave no indication of how he thinks we should do this, he gave no indication he has a plan to do this, and gave indication when this would be done.

Overall grade – D-. Obama Care is one of the biggest drags on the economy and unemployment today and he ignored it. The only reason he did not get an F here is that he may finally be realizing the need to reform Medicare and Medicaid, even if he does not have a plan on how to do that.

3) Tax Holiday For Overseas Profits

Some economists suggested that the President should announce that there should be a one time tax holiday for American companies that have stashed billions of dollars of their profits overseas because it is cheaper to leave those earning overseas than to bring them back to the country and get hit with a 35% tax hit. This tax holiday should be a one time deal that would be followed up immediately with a dedicated overhaul of the tax system.

The reasoning is that it would be better to have that corporate cash sloshing around in the United States than sitting off in some foreign banks even if it was not taxed. The short term problem is jobs, not taxing overseas profits. However, in order to not train companies to wait for the next tax holiday, this would be a one time deal followed immediately by comprehensive tax reform. The President did not address this opportunity to get dollars flowing back into the country and economy.

Overall grade – F

4) Regulation - many businesses have suggested that the President terminate all Federal regulations that do not impact the health and safety of our citizens or the environment and he agreed with this in his speech. He addressed this issue, claiming that his administration had identified over 500  regulatory reforms that will free up billions of dollars over the next few years. 

However, he provided no specifics or big deals such as termination of the unneeded and cumbersome Sarbannes-Oxley legislation. The President’s case would have been stronger if he had provided some concrete examples of what his administration has already done to ease the regulation overload.

He also did not address the overtly oppressive Federal government interference into individual business operations, specifically the overbearing and likely politically motivated harassment of Boeing and Gibson Guitars. This unnecessary type of government interference diverts companies’ resources from business and job expansion.

Overall grade – B-. This could change if he does not follow through with the promises he made.

5) Energy

He made no reference at all to using the energy industry, and using oil and gas company resources, to expand our internal energy capacity and development. Since the country does not have an overall, longer term strategic energy plan and policy, fossil fuels will still be the major component of our energy mix for a long time.

Given that fact, it makes sense to not keep sending our wealth overseas to other energy providers when we could develop our own energy resources, again, using oil company money, not taxpayer money. Ending any Gulf drilling moratoriums, building the  Canadian crude oil pipeline, opening up drilling in the Arctic, etc. would create good, long term, needed jobs in our domestic energy industry.

Coupling that with a major initiative to develop alternative energy sources and an overarching energy strategy would cover both our long term and short term energy needs while creating a ton of jobs. The President missed this opportunity completely.

Overall grade – F

6) Education

As a country, we need a number of short term and long term changes in the nation’s approach to education and its impact on jobs. First, given that the Federal government has dozens of independent organizations that provide severely fragmented job training services, these dozens of job training entities should be consolidated into a single, more efficient and more effective Federal job training organization, placed in the Health and Human Services Department.

This single organization would be a one stop shopping for citizens looking for training support and be a conduit between job seekers and those hiring. It would be more efficient than having the dozens of organizations that we currently have.

Long term, need an initiative that would identify the root causes of our failing public schools and put together a comprehensive plan for fixing our education processes so that we stop under educating our kids relative to the rest of the world. A similar plan was laid out under the Reagan administration in 1983 but the American political class ignored those findings. As a result, our kids are not being educated as well as kids in dozens of other countries around the world.

Unfortunately, the President completely missed the needs in this category also. He made two references to education in his speech. First, he wants money to fix up 35,000 schools across the country. Second, he wants money to hire more teachers. However, if the country does not fix our failed public education processes, if we do not adopt curriculums to the current, fast paced world, if we do not improve teacher training and evaluation, etc., all the President’s plans will do is have us continue to under educate our kids. Only now we will under educate them with more of the same kind of teachers in nicer buildings.

This is a typical solution from the political class. It is based on their inability to understand root causes of problems Having a nicer school building will not make for a better educated work force. Hiring the same types of teachers will not improve the learning process. We need fundamental changes to education to compete in the world economy.

None of the President’s plans address this more serious problem. He just wants to hire some painters and electricians to make things look nice. The basic product, bad education results, will not change and will not positively affect job creation.

Overall grade – F

7) Taxes

Many assumed the President would ask for an extension of the tax changes made last fall, i.e. the extension of the Bush tax cuts be extended for two years in order to introduce some more certainty into the tax planning of individuals and companies. From his speech it looks like he wants to extend it for another year. Not bad, but two years would have been better and provided the economy with more certainty.

In addition, the President asked for more tax changes, especially for small business. These include providing tax credits for newly hired employees and forgoing the payroll tax for a year to give businesses more cash. However, while these are positive steps, they are open for abuse (e.g. what would stop a business from firing all of its employees on Friday, hiring them back on Monday and claiming the tax credits ) and will further deplete the dwindling Social Security funding.

Their effectiveness is also worthy of doubting. Many economists have looked at similar tax programs in the past and found that unless there is a clear path to an improving economy and improving sales, a business will not likely take on new employees and assume that risk if there are still all types of uncertainty in the mix (e.g. next year’s elections, Obama Care, over regulation, etc.)

The other tax area the President touched on his is unhealthy fixation with taxing the rich. The numbers prove that while taxing the rich more might be a healthy political move for some voters, the financial impact on the economy, government tax levels, and the national debt is extremely small. The President made some embarrassingly incorrect statements regarding taxing the rich in his speech that are worth reviewing:

“Warren Buffet pays a lower tax rate than his secretary.” Likely a true statement since Buffet probably draws a smaller salary than his secretary. However, the President never brings up that fact that Buffet does not pay himself millions of dollars every year in salary, getting his money via legally approved other ways that minimize his tax burden. To not mention this fact is deceptive at best, a lie at worst.

“I (Obama) believe that the vast majority of wealthy Americans and CEOs are willing to do just that (pay more in taxes) if it helps grow the economy.” A number of problems with this tired, cliched statement. First, the President never cites a source or research that supports this statement. He states it as fact but no data supporting its truth is ever presented.

Second, if these people are so anxious to pay more in taxes, why don’t they? The U.S. Treasury Department has had a program for many years that easily allows Americans to pay more than they owe in taxes to pay down the national debt. If these people were willing to pay more, there is nothing stopping them from doing so. The fact that this program gets very little money donated to it every year reinforces the doubt that the President’s statement is right.

Third, if they do want to pay more in taxes, why didn’t the President challenge them to contribute to the infrastructure program he is proposing? We could name bridges and streets and dams after them as as a side benefit.

Finally, the President implies that if only these people paid more in taxes, the economy would grow significantly. Certainly not a true statement if you examine the numbers. Another Obama statement bordering on deception.

The bottom line is we need a much simplified and much fairer tax code. A tax code where the rich pay their fair share and those Americans that use the income tax process as a money maker, i.e. 45% of Americans pay no Federal income taxes, also pay their fair share. However, beyond general statements about reforming the tax code, the President’s provided no details, plans, or timetable on how to do that.

Which is a shame since such a plan would remove a large amount of uncertainty and wasted economic time complying with our complex tax code. This would have freed up money, time, resources, and energies to expand our economy and hire new workers.

Overall grade – D-

National Debt - many organizations, including the President’s own debt reduction commission, have identified many ways to take trillions and trillions of wasted dollars out of our national debt. The President at least gave lip service to this need and claims to have an aggressive plan ready within the week. We shall see.

Grade – Incomplete

9) Unemployment Benefits

Many economists suggested that the President start finding a way to get out of the unemployment benefit business since every major study conducted in this area, including one done by the new head of his economic advisor team, says that providing long term unemployment benefits contributes to chronic long term unemployment The President stated in his speech that he wants to extend long term unemployment benefits, the exact opposite of what all economic studies say is wise.

Overall grade – F, based on the results of the studies cited above, the fact that as we keep extending benefits, unemployment gets stronger, and the fact that there are jobs out there. Just go to Craigslist, Snag A Job’s website or other employment websites and search for all jobs in a zip code and see the hundreds or thousands of vacant jobs that come back.

Jobs are out there, they may not be great jobs, they may not be in someone’s field but here has to be a creative way of melding unemployment benefits with the existing vacant job piles around the country so that everyone wins. In the President’s speech, status quo wins and that is a failure.

10) Trade treaties.

The President was expected to press for the passage of trade treaties that have already been negotiated and he did.

Overall grade – A

Overall, across all components, this speech gets no better than a D minus in boldness, originality, in-depth understanding of our root causes to our problems, and needed specifics on how to move forward. His tax ideas are standard and very tactical, with histories of varying degrees of success. His call for tax reform was hollow. His ignoring of the devastating effects of Obama Care on hiring and uncertainty is unforgivable.

His strategy for paying for this increased spending is vague and yet to be unveiled or to be determined. His removal of unnecessary regulations was tepid at best.  He missed big strategic opportunities to free up uncertainty in the private sector by ignoring the wastefulness of Sarbannes-Oxley, failing to address the opportunities in the domestic energy field, and fixing our short term and long term education process. He missed a big time opportunity to declare a one time tax holiday to get off shore corporate earnings back into our economy and linking that to overall tax reform.

If these are such great ideas, which they are not, why haven’t we moved on them previously? Could it be that we have and the results has been a steady dose of 9% unemployment? There was not a creative, ingenious, or bold idea in the lot.

His speech reinforces the belief that the President is like most other politicians, they do not know how to think strategically. All of their thought processes and plans are usually very short term and tactical, rarely addressing the underlying problems. Cash For Clunkers. Cash For Caulkers. One time rebate for first time home buyers. A scattering of small business tax credits but no overall tax reform that encourages business growth. Fix up the schools and make them look pretty without long term education reform. All failed concepts, all short term, doomed tactics.

Besides not being strategic. the plans set out by the President do not remove the major road blocks of uncertainty in the economy and marketplace:

- Short term, gimmicky tax adjustments with unknown future implications and changes.
- A complex and unwieldy tax code.
- High national debt.
- High taxes at every level of government.
- Over regulation.
- Obama Care.

Until the political class fixes these problems, unemployment will still stay high and businesses will continue with their conservative “deer in the headlights” planning.

About the Author

Walter “Bruno” Korschek is the author of the book, “Love My Country, Loathe My Government. – Fifty First Steps To Restoring Our Freedom and Destroying The American Political Class,” which is available at www.loathemygovernment.com and online at Amazon and Barnes & Noble. Our daily dialog on freedom in American can be joined at www.loathemygovernment.blogspot.com.

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Real Resumes for Nursing Jobs $16.95 Editor Anne McKinneyReviews and ExcerptsEven within the nursing field, there are a variety of positions, and this book shows samples of resumes and cover letters that worked for real people. This title will be a valuable resource to nursing professionals who seek clinical nursing or administrative positions. Newly minted nurses and newcomers to the field will learn how to show off their clinical rotations to best advantage. Nurses often change fields, too, and the book includes resumes of nurses who have successfully transitioned into pharmaceutical sales and other areas. A “bonus” of the this book is that it includes samples of paperwork involved in obtaining federal government jobs: there are specialized resumes as well as the “resumix” and KSAs often required for federal positions. This book will show nursing professionals how to maximize their career potential, get federal nursing positions, and change fields if they want to!”Distinguished by its highly readable samples.” – Library Journal1-885288-32-8

Jobs and Careers Abroad $3.98 This revised twelfth edition of the comprehensive guide to all kinds of work abroad provides essential information on permanent career opportunities around the world for people of all walks of life, from school leavers still deciding on a career to fully qualified professionals. The types of employment covered in "The Directory of Jobs & Careers Abroad" include: – Agriculture, Fisheries and The Environment. – Banking and Accountancy. – Information Technology and Journalism. – The Law, Medicine and Nursing, – Oil & Gas and Mining & Engineering. – Secretarial, Translating and Interpreting. – Transport & Tourism and Hospitality & Catering. – Voluntary Work. – Work with International Organisations including the United Nations. The book lists the professions and trades in demand overseas and gives all the facts on over thirty five different specific careers with detailed information on recruitment and sources of jobs including consultants, agencies, advertising, the internet etc. and finding work by making use of contacts such as professional associations. In addition there are individual chapters presenting career opportunities in fifty countries which include for each country coverage of employment prospects there plus: – Immigration and residency regulations. – The cost and standard of living, – The language, health, welfare and education, etc. Also included in these chapters are details of employers and agencies specialising in placements in that country and listings of hundreds of overseas subsidiaries of international companies. Other features of "The Directory of Jobs & Abroad" include a comprehensive index of employers andagencies and, in addition to coverage of how to find work by conventional means, advice on how to find the jobs that aren’t advertised by using the Creative Job Search.

21st Century Pocket Guide to Jobs, Resumes, and Practical Career Advice – Interviewing, Applications, Federal Jobs, Job Search Techniques, Cover Letters, Refere $5.29 Vital information about creating an effective resume, cover letter, applying for jobs, preparing for interviews, and evaluating offers – even how to get a job with the federal government. Practical advice from experts at the Department of Labor on all aspects of job search strategies and resume writing with many samples to guide your efforts! Tips, examples, guidance, and advice for job seekers.

Confessions, Rants And Exploits Of A Civil Servant $17.95 Ever wondered how your tax money is really spent? Discover how the federal government works and what the lives of civil servants and their jobs are really like. Ramona Swann’s 30-year career spanned assignments at the Departments of Defense, Transportation, Agriculture and Energy in a navigation up the civil service career ladder that plays out like a dark comedy. Ramona’s world was one of excessive waste, tangled rules, indecipherable regulations and, of course, ever present politics.Confess

The Civilian Conservation Corps in Nevada: From Boys to Men $34.95 The Great Depression of the 1930s had a devastating impact on sparsely populated Nevada and its two major industries, mining and agriculture. Even prior to the national economic collapse, nature and overgrazing had rendered millions of acres in the arid state unusable. However, thanks to Nevada’s powerful senate delegation, Roosevelt’s New Deal funding flowed abundantly into the state. Among the programs thus supported was the Civilian Conservation Corps, a federal program intended to provide jobs for unemployed young men and a pool of labor for essential public lands rehabilitation projects. In all, nearly 31,000 young men were employed in fifty-nine CCC camps throughout Nevada, most of them from outside the state. These boys, as they were called, went to work improving the state’s forests, parks, wildlife habitats, roads, fences, irrigation systems, flood control systems, and rangelands, while learning valuable skills on the job, through vocational courses, and in a formal education program intended to help them find employment when the economy improved. Rural communities near CCC camps reaped additional benefits when local men were hired as foremen and when the camps purchased supplies from local merchants. The Civilian Conservation Corps in Nevada is based on extensive research in private manuscript collections, unpublished memoirs, CCC inspectors’ reports and other records, government documents, newspapers, and other sources, as well as on interviews with CCC veterans and personnel. The book also includes period photographs depicting the Nevada CCC and its activities. This is the first comprehensive history of the Nevada CCC, a program designed to help the nation get back on itsfeet, and of the boys who did so much to restore Nevada’s lands and resources–and who in the process became men.