In order for Americans to follow a president’s vision, a president has to be specific in his vision. A president also has to sell a vision that America can buy into. As historians commemorate the fiftieth anniversary of John F. Kennedy’s administration, one could say that at least in the area of technological dominance, President Kennedy laid a clear vision.
With the backdrop of the spread of communism in central Europe and southeast Asia, and the Soviet Union’s threat to be the first nation to put a man in space, President Kennedy, on 25 May 1961, asked the Congress to provide the administration with $1.7 billion to launch the endeavor of placing a man on the moon within the next ten years.
“I believe that this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the Moon and returning him safely to Earth,” said President Kennedy.
In addition to the initial $1.7 billion requested, President Kennedy also asked for an additional $9 billion over five years for development of the space program. Describing his request as urgent, Mr. Kennedy stated that should the economy continue to grow, his goal could be met without raising taxes.
Kennedy’s vision was simple: America was to be the world’s leading nation. This dominance would manifest itself in superior technology driven by a new frontier economy. His plan had a vision.
Fifty years later, the United States is facing an economic dilemma. Its human resources are being underutilized as evidenced by an overall unemployment rate of 9.1%.
Drilling down into the minority community, the labor resources of African Americans are severely underutilized as reflected in its unemployment rate of 16.7%. Hispanic Americans are experiencing 11.3% unemployment.
Vision is a word that has not been attached to President Obama’s jobs plan. The criticisms from the right include the expected rhetoric around tax increases, with Speaker of the House John Boehner making it clear that Mr. Obama’s jobs plan was a “poor substitute” for policy and the notion of tax increases are unacceptable, both as part of a jobs plan or a deficit reduction plan.
Notwithstanding the GOP’s lack of vision beyond the excitable utterances of “tax cuts, tax cuts”, it is the President, as the manager of our nation’s spending plan, that we look to as purveyor of our country’s priorities, and based on his American Jobs Act of 2011, the priorities are unclear.
First, if the bill, introduced formally to Congress last Monday, is to be stimulate job growth, it should provide indirect support to consumer demand stimulation. It is difficult to see how this bill does this.
Tax cuts can only go so far in a down economy. The uncertainty expressed by consumer sentiment can only lead one to conclude that consumers, upon receiving any rebates or reductions in payroll taxes, may simply choose either to hoard cash or pay off debt. This propensity to save or deleverage means that less money would enter the economy when spending is most needed.
And would increasing taxes on the wealthiest Americans help? Probably not. Rather than invest in the American financial markets, the source of much of their income, the rich might choose to send their money overseas where tax rates treatment is perceived to be better and emerging markets offer greater growth, at least for now.
Second, eliminating “corporate loopholes” like the proposed elimination of depreciation for corporate jet expenses, has the opposite effect on growth. Instead of investing in activities to open markets and innovate product offerings, our economy’s producers will become stagnant, having fewer tax write offs to leverage the additional risks that innovation bares.
Third, this is not the time to attach non-growth related items to a jobs plan. For example, what does an spectrum incentive auction scheme and establishment of a non-profit public safety network corporation have to do with national job growth? Spectrum auctions don’t create jobs. Handing over a license to a non-profit for the purpose of managing the use of D-block spectrum and deployment of broadband facilities does not create jobs.
Lastly, Mr. Obama’s “all or nothing, no division, pass this bill today” approach may make him sound like a Chicago tough-guy, but even in a Washington that has seen unprecedented incivility in recent years, the door to compromise, especially on spending bills, must be kept open.
So, where does Mr. Obama’s plan see the American economy at the end of this decade? Does the plan see America re-engineering its economy from a consumer oriented one to a producer oriented one? Does the plan identify areas and markets in our global economy that are going unserved? Does the plan see where America can reestablish world dominance and create a workforce that can thrive on that leadership? Can anyone see that in this plan?