Dr Peter Morici:
The presidential debates have clearly established what Americans may expect from
an Obama second term or a Romney Administration.
Mr. Obama would double down on the policies pursued since the financial crisis
gripped—growing America from the government out.
In 2007, with two wars ragging and the Bush tax cuts and prescription drug
benefits for seniors in place, the federal deficit was $161bn—it has exceeded $1
trillion the past four years.
That stimulus has delivered weak growth, and the unemployment rate has fallen
only because so many Americans have quit looking for jobs. Paradoxically, more
seniors are working butms of Americans below the age of 65, frustrated, have
When Mr. Obama took office, unemployment was 7.8%, but if the adult labor-force
participation rate were the same today as when he took office, the jobless rate
would be 10.7%—wages adjusted for inflation are falling, too many young people
live with parents, and household wealth is melting away.
Mr. Obama promises more spending on roads, bridges and schools - - a badly
needed initiative - - but he also wants more government investments in
futuristic energy projects like Solyndria and electric car battery A123 maker
that reward his political pals and end up in bankruptcy.
Mr. Obama would raise taxes on families earning more than $250,000 and many
small businesses, and whoever wins, Congress is expected to let the temporary
reduction in payroll taxes lapse in January. Overall federal taxes would jump
more than $300bn and largely cancel the jobs-creating effects of any new
Permitting young folks to borrow even more to pay tuition bloated by managerial
inefficiency and depressed faculty productivity at colleges and universities
won’t create a single new job for the nearly half of all college graduates
facing counter work at Starbucks.
Doubling exports, through new trade agreements, will only double imports, and
not positively affect employment in manufacturing or anyplace else.
The treasure trove for creating am more manufacturing jobs, and supporting jobs
in services, lies in standing up to China and developing domestic energy, which
would require mountains of building materials and machinery.
Since the recovery began, annual exports to China are up $37bn but imports are
up $160bn, because a few complaints in the WTO (World Trade Organisation)
notwithstanding, President Obama has failed to stand up to Beijing’s currency
manipulation, theft of intellectual property, and import barriers to competitive
With each passing day, Beijing’s mercantilism becomes more brazen, because they
sense American weakness—consumers who would rather throwms into unemployment
rather than give up subsidized, cheap clothing and electronics at Wal-Mart, and
a President reluctant to even admit China manipulates its currency.
The oil deficit is up $77bn, because President Obama has slowed development of
onshore resources in places like South Dakota with law suits, and drilling
remains outlawed on the Atlantic and Pacific Coasts, and severely constrained in
much of the Gulf and Alaska.
Governor Romney’s policies could boost oil production by more than 50% and cut
imports in half, without increasing environmental risks.—or shifting those to
developing countries where those are managed less effectively.
Of all the things Mr. Romney promises—standing up to China and developing US
oil, instead of sending petro dollars to Middle East nations who finance
terrorism, would deliver the 12m new jobs he promises.
By the end of President Obama’s first term, his economic recovery will have
delivered about fivem new private sector jobs. A Romney first term could easily
deliver twice that number. That’s the choice Americans face.
Professor, Robert H. Smith School of Business, University of Maryland,
College Park, MD 20742-1815,
703 549 4338 Phone
703 618 4338 Cell Phone
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