Bill Clinton: Newsweek: It’s Still the Economy, Stupid
Harry Hopkins had nowhere near the rules and regulations we have now. (In 1933, Hopkins’s Civil Works Administration put 4 million to work in a month.) ...... President Obama came in with a really good energy policy, including an idea to provide both a tax credit for new green jobs and for startup companies, to allow the conversion of the tax credit into its cash equivalent for every employee hired. ....... the obvious candidate for that role today is changing the way we produce and use energy ...... Before the financial meltdown, the four countries that will meet their Kyoto greenhouse-gas emission targets were outperforming America with lower unemployment, more new business formation, and less income inequality. ...... We could put a million people to work retrofitting buildings all over America. ...... You get 7,000 jobs for every billion dollars in retrofitting. Let’s start with the schools and colleges and hospitals, and state, county, and local government buildings. That would keep the construction industry busy for a couple of years, creating a million jobs that would ripple through the whole economy, spurring even more growth. ....... One of the reasons Harry Reid won in Nevada is that, right before the election, two big Chinese companies announced they were moving factories there to make LED lightbulbs and turbines for the big wind farms down in Texas. ........ They said, “We’re coming here because Nevada has the best state incentives to go with the federal incentives.” They were very clinical. They said labor costs in China are still cheaper, but these turbines are big and heavy, and higher transportation costs to the U.S. market would offset the labor gains—and there was a tax credit from the federal government for green-energy manufacturing, and extra credits in Nevada. ........ Banks still have more than $2 trillion in cash uncommitted to loans. ....... I suggested that the federal government set aside—not spend—$15 billion of the TARP money and create a loan-guarantee program that would work exactly the way the Small Business Administration does. Basically, the bank lends money to a business after the federal government guarantees 75 percent of it. Let’s say that the SBA fund has about a 20-to-1 loan-to-capital ratio, and it’s never come anywhere near bankruptcy. If we capitalized this more conservatively at 10-to-1, we could guarantee $150 billion in loans and create more than a million jobs. ........ Look at the tar roofs covering millions of American buildings. They absorb huge amounts of heat when it’s hot. And they require more air conditioning to cool the rooms. Mayor Bloomberg started a program to hire and train young people to paint New York’s roofs white. ........ In most of these places you could recover the cost of the paint and the labor in a week. ...... Every analysis shows that TARP and the stimulus saved us from a second Great Depression. After the GM and Chrysler bailouts, we have something like 75,000 more jobs in the industry. Closure of the factories and the suppliers with them would have cost a million jobs. The stimulus should have been more vigorously defended in the last election. It did work, but it didn’t “fix the economy” because it was an $800 billion stimulus trying to fix a $3 trillion hole. ........ If we cut a lot of government spending while our economy still has so little private investment, we risk weakening the economy even more and increasing the deficit because tax revenues can fall more than spending is cut. ...... When asked why he robbed banks, Willie Sutton said, “Because that’s where the money is.” We have to unlock that money and take steps to get U.S. corporations to invest some of the $2 trillion they have accumulated. ....... The real thing that has killed us in the last 10 years is that too much of our dealmaking creativity has been devoted to expanding the financial sector in ways that don’t create new businesses and more jobs and to persuading people to take on excessive debt loads to make up for the fact that their incomes are stagnant. ...... In the seven years and eight months that preceded the meltdown, our economy produced a meager 4 million new jobs, far too few to cope with millions coming into the workforce, and virtually all those jobs were created in housing, finance, and consumer spending. ........ the former labor commissioner in Georgia, Michael Thurmond. After job vacancies go unfilled for a certain period of time, the state offers businesses the money to train potential employees themselves. During the training period, the companies don’t become employers, so they don’t have to start paying Social Security taxes or employer benefits. They train people their way, then hire those who succeed as regular employees, reducing the time lag between when a job is advertised and when it is filled. With unemployment at 9 percent and the real rate of those without full-time work higher, there are 3 million posted job vacancies. Filling them faster could make a big difference. ........ Lower the rates to be competitive, but reduce the loopholes that cause unfair disparities. We all need to contribute something to help meet our shared challenges and responsibilities, including solving the debt problem. ...... we abandoned the path of balanced budgets 10 years ago, choosing instead large tax cuts especially for higher-income people like me, along with two wars and the senior citizens’ drug benefit. In the history of our republic, it’s the first time we ever cut taxes while going to war. ...... There must be opportunities to be tapped, given all the cash in banks and corporate treasuries. ........ There’s been a remarkable lack of attention to “microeconomics,” the untapped growth potential of American corporations, entrepreneurs, and workers.Now we know, the banks are sitting on two trillion dollars of cash, and the corporations are sitting on two trillion dollars of cash. There is no shortage of cash. There is no shortage of people with skills. There are huge unmet demands. So what's amiss?
Bill Clinton is well qualified to be talking on this topic. He sat on an economy that did well. The economy did so well he deserved a third term.
But there is a big missing link in the picture he paints. That missing link is globalization. Bill Clinton never really got that part. He was the kid standing on the shore admiring the waves of globalization. But he never really got into the waters, as Governor, as President, and as former President. That is a curious thing to say because I would give him an A for trying.
Money wants to grow. Four trillion dollars sitting around is money not growing. It is safe, but it is not growing. And money wants to grow. It is the very nature of money, that it wants to grow. And the best way to grow that money is by building the global financial infrastructure that will take trillions into global microfinance and global infrastructure. There will be guaranteed 10% annual returns. Money wants to grow.
Early in the recession the Chinese challenged the special place of the dollar in the world. They were right. You can not complain about the very real deficit and debt problem America has and also protect the dollar's special place in the world. There is a direct correlation between that special place for the dollar and America's fiscal indiscipline.
Another gap in his thinking is that he seems to suggest clean tech has taken the place of internet technology as an engine of growth. And so you see a huge blind spot: broadband. Ubiquitous wireless broadband is the interstate highway of these times and America does not have ubiquitous, it does not have wireless, and it does not have broadband. One gigabit per second would be broadband.