Outsourcing pioneer Mitt Romney is not fit to talk about job creation
If you read only two things today, make sure they are this report from the Washington Post and Jeffrey Liebman’s op-ed in the Wall Street Journal.
Mitt Romney has spent the past six years traveling the country and vowing to the American people that as president, he’ll fight for good, middle-class jobs. But that’s just a load of empty promises. As Liebman points out, Romney doesn’t even have a jobs plan—only a job-destroying budget plan.
“What would Gov. Romney do to create jobs now? In a word, nothing. In fact, the proposals he has put forward would slow the recovery, reversing the gains we have made since the recession ended.
“Gov. Romney himself has acknowledged that excessive spending cuts can have a damaging impact on the economy. …
“But his own budget plan—as well as the House Republican budget he has said he is ‘very supportive of’—requires immediate cuts that would significantly reduce domestic spending. If Gov. Romney is correct about the impact of spending cuts, then the House budget, which cuts spending by $187 billion in 2013 relative to the president’s budget, would reduce economic output by about 1%. That would shrink employment next year by more than one million jobs.”
Shrinking employment—now there’s a subject Romney knows a thing or two about. The Washington Post reports that during his oft-touted time in the private sector, Romney was a “pioneer” in the practice of sending good American jobs to places like China and India.
Could this be why Romney supports tax policies that reward companies that outsource our jobs overseas?
“During the nearly 15 years that Romney was actively involved in running Bain, a private equity firm that he founded, it owned companies that were pioneers in the practice of shipping work from the United States to overseas call centers and factories making computer components, according to filings with the Securities and Exchange Commission. …
“But a Washington Post examination of securities filings shows the extent of Bain’s investment in firms that specialized in helping other companies move or expand operations overseas. While Bain was not the largest player in the outsourcing field, the private equity firm was involved early on, at a time when the departure of jobs from the United States was beginning to accelerate and new companies were emerging as handmaidens to this outflow of employment.”
So, to sum it up: Romney is campaigning on job creation, but he has no jobs plan. He does have a budget plan that would kill a million American jobs as well as a 15-year record of loading up companies with debt, sending those companies into bankruptcy, destroying middle-class jobs and communities—and sending American jobs overseas. And let’s not forget that banner 47th place in job creation when he tried to apply his private-sector experience to governing.
It’s clearer by the day: Romney is not fit to talk about job creation.
Jeffrey Liebman: Republicans Are Blocking Obama’s Jobs Plan
Nine months ago, the president outlined his American Jobs Act and independent economists said it would create as many as 1.9 million jobs.
By JEFFREY B. LIEBMAN
As the economy continues its recovery from the worst downturn in three generations, it’s clear that, once again, decisive action is needed to create jobs now and lay the foundation for stronger, shared economic growth.
There is a strong consensus about what the immediate challenges facing our economy are: first and foremost, a continued lack of demand as a lingering result of the recession. We also know the areas where this has caused the most damage, including deep state and local government layoffs and continued weakness in the construction sector. And we have a good idea of what tools work best to address these problems.
The president has put forward a plan that uses exactly these tools. Nine months ago, President Obama outlined his American Jobs Act and independent economists said it would create as many as 1.9 million jobs. While Congress has acted on some of his proposals—most notably, extending payroll tax cuts that provide $1,000 for an average family—it left more than a million jobs on the table.
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Jeffrey Liebman, an economic advisor to President Obama’s campaign, on how President Obama’s jobs plan would create jobs. Photo: Getty Images
One of the largest drags on our economy has been the layoffs of public employees like teachers, firefighters and police officers due to state budget cuts. Even as American businesses have created nearly 4.3 million private-sector jobs over the past 27 months, state and local government employment has fallen by 450,000 jobs during that time. But Congress has failed to act to put hundreds of thousands of teachers and first-responders back to work.
Likewise, the crash of the housing markets continues to take a toll on construction workers. There are still two million fewer construction workers employed than when the recession started in 2007. Yet Congress has failed to act on the president’s plan to put construction workers back on the job rebuilding our roads, bridges and airports.
Both of these steps would strengthen our economy now and for years to come. Economists Raj Chetty, John Friedman and Jonah Rockoff have shown that in a single year of teaching a great teacher raises the lifetime earnings of her students by $250,000 relative to an average teacher—so laying off some of our most promising teachers is tragic. Infrastructure boosts productivity and economic growth, yet we are spending less than half as much on infrastructure as Europe does as a share of the economy, and only a quarter of what China spends.
President Obama would take other steps as well: cut taxes for small businesses that add jobs or increase wages, make it easier for homeowners to refinance their mortgages, and put veterans back to work. The president has also put forward a budget that would reduce the deficit by more than $4 trillion over the next decade and stabilize our debt-to-GDP ratio. But he would achieve that deficit reduction while continuing to invest in education, infrastructure and innovation.
This approach stands in stark contrast to that of Gov. Mitt Romney. What would Gov. Romney do to create jobs now? In a word, nothing. In fact, the proposals he has put forward would slow the recovery, reversing the gains we have made since the recession ended.
Martin Kozlowski
Gov. Romney himself has acknowledged that excessive spending cuts can have a damaging impact on the economy. In May, he said, “if you take a trillion dollars for instance, out of the first year of the federal budget, that would shrink GDP over 5%. That is by definition throwing us into recession or depression.”
But his own budget plan—as well as the House Republican budget he has said he is “very supportive of”—requires immediate cuts that would significantly reduce domestic spending. If Gov. Romney is correct about the impact of spending cuts, then the House budget, which cuts spending by $187 billion in 2013 relative to the president’s budget, would reduce economic output by about 1%. That would shrink employment next year by more than one million jobs.
The rest of Gov. Romney’s economic agenda—$5 trillion in deficit-increasing tax cuts with no plausible path to pay for them, divesting from clean energy, and repealing rules of the road for Wall Street—would almost certainly undermine confidence in the U.S. economy and reduce employment further. But even if you dismiss this risk, what is clear is that there is no plausible argument for how Mr. Romney’s policies would address the jobs crisis we face today.
President Obama’s ideas are not radical ones. Many of them, like investing in infrastructure, encouraging clean energy and allowing businesses to expense new investments, were supported by Gov. Romney in the past. But, as a presidential candidate, he has decided to reposition himself as a believer in the same excessive budget cutting that has choked off the economic recovery in Europe and plunged that continent into another economic crisis.
Republicans in Congress are the only thing that is preventing these measures from putting more Americans back to work right now. If Mitt Romney really wanted to get job growth going, he would tell his Republican colleagues to stop blocking the president’s proposals.
Mr. Liebman is a professor of public policy at the Harvard Kennedy School and a senior economic policy adviser to the Obama campaign. From 2009 to 2010, he was executive associate director and then acting deputy director of the Office of Management and Budget.
A version of this article appeared June 22, 2012, on page A17 in the U.S. edition of The Wall Street Journal, with the headline: Republicans Are Blocking Obama’s Jobs Plan.