The New Economic Patriotism: A Look At Obama’s 27-Point Economic Plan
This is PART 1 (Manufacturing and energy) | Click HERE for PART 2 (Small businesses, education, the deficit, healthcare, and social security)
While astutely leveraging cutting-edge technology and social networking, President Barack Obama’s 2012 campaign also gave a nostalgic nod towards the classic medium of print with a beautifully designed, eight-page booklet entitled The New Economic Patriotism: A Plan for Jobs and Middle Class Security (we, here at AI, have obtained the PDF file for you to read, print, and enjoy in its full glory). Distributed mainly in swing states during the increasingly chaotic and acrimonious final weeks of the presidential election, the booklet was overlooked by much of the media. After all, how can one compete with that dog in the tin hat trying to get more Facebook “likes” than conservative pundit, Glenn Beck?
Obama’s 27 points are organized under his seven main priorities, which are to:
- Revive US manufacturing;
- Increase domestic energy production;
- Grow small businesses;
- Revamp education;
- Reduce the deficit;
- Reform healthcare; and
- Protect retirement (Social Security and Medicare).
This article discusses the first two sets of proposals for reviving U.S. manufacturing and increasing domestic energy production. Tune in tomorrow for Part 2, which will discuss Obama’s plans for growing small businesses, revamping education, eliminating the deficit, reforming healthcare, and shoring up social security.
Why Obama’s Plan Is Worth A Look
Now that the dust has settled, the booklet is worth a look. Although The New Economic Patriotism offers little fresh material, this writer finds it notable for three reasons: (1) It so charmingly harks back to the political pamphlets of our “ye olde mouldey historie,” like Thomas Paine’s Common Sense back in 1776; (2) The authors assume voters are intelligent, and jam-pack their booklet with facts, numbers, and almost 4,000 words — many of which have more than two syllables — in addition to the usual photos, charts, and other eye candy; and (3) The booklet provides Obama-watchers with a clear-cut guide to the president’s positions on employment and the economy in one handy-dandy document.
Will Obama’s Plan Work?
Sure it will, but is that necessarily the point? Economists and pundits have long debated whether the solutions proposed (and sometimes even partially- or fully- implemented) will have the desired effects on improving America’s economic prospects. It may not even matter whether all of Obama’s plans work right away, so much as whether the majority of people believe that he’s doing everything possible to help them, that things will get better, and that the system will treat them fairly.
President Franklin Delano Roosevelt tried a variety of approaches towards ending the catastrophic Great Depression (1929-1941), including public works projects, financial reform (including the Glass-Steagall act — the 1990’s GOP-led repeal of which led directly to our current economic crisis), increased regulation, subsidies, and more. When FDR assumed the presidency for his first of his unprecedented three terms, few people believed that the government could — or even should — intervene. Now, the vast majority of Americans expect their Federal, State, and/or Local governments to do something when disaster strikes. In keeping with these expectations, Obama is doing everything he can, and has managed to accomplish quite a lot despite a hostile congress and filibuster-proof minority of Senators.
On Reviving US Manufacturing (Points 1-5)
The President has emphasized the importance of manufacturing jobs to America’s declining middle class from early on. In his 2010 State of the Union Address, Obama announced his National Export Initiative and pledged to “double our exports over the next five years, an increase that will support two million jobs in America.” When accepting the Democratic Party’s nomination for his second term at the 2012 convention, Obama declared, “After a decade of decline, this country created over half a million manufacturing jobs in the last two and a half years.” With a dash of whipped cream and a cherry on top, the campaign brochure proudly adds that “exports have risen 36%” since Obama took office.
Obama’s five proposals for increasing manufacturing jobs in the US are as follows:
1. Cut tax rates for domestic manufacturing by nearly 25%. According to Business Insider, this would lower the top rate to 26.25%. It is unclear whether lower domestic tax rates would create more manufacturing jobs.
2. End tax deductions for shipping jobs overseas and create tax credits for bringing jobs home. Unfortunately — as reported by The Hill’s Ramsey Cox — GOP senators blocked Obama’s Bring Jobs Home Act bill with their usual obstructive filibustering. The “Insourcing Bill” would have created a 20% tax credit for companies that move their operations back to the US.
3. Create a Trade Enforcement unit to “level the playing field” with China. Many Americans feel that China’s devalued currency, lack of regulation, government-subsidized industries, trade barriers, theft of intellectual property, and low wages gives their workers and companies an unfair advantage. Obama’s administration therefore acts aggressively towards China with lawsuits, sanctions, and other approaches. On September 17th, the U.S. filed the latest in a barrage of complaints against China with the World Trade Organization — this time on behalf of the Auto industry — and the President announced, “We’ve brought more trade cases against China in one term than the previous administration did in two — and every case we’ve brought that’s been decided, we won.” On October 19th, Tom Miles and Rachelle Younglai from Reuters reported that the World Trade Organization barred China from charging tariffs on steel from the U.S. Each case brought before the WTO takes a year-and-a-half or longer to decide.
4. Train two million workers through partnerships between community colleges and employers. Partnerships that match career training with needs in the workplace would help address mismatches between the skills workers have and the skills companies need. In her 2011 Slate article – “Does Job Retraining Work?” — Ann Lawrie wrote that the answer depends on whether the unemployment is “cyclical” (temporary lack of demand) or “structural” (permanent shifts in the labor market). Today’s improving, but still sluggish, economy seems more like the latter. According to Lawrie, some economic sectors are still growing, demand is up for “science, engineering, plumbing, and various health trades.” A survey conducted by The Manufacturing Institute revealed that two thirds of manufacturers had a “moderate to severe” shortage of workers in specialized, skilled trades.
5. Create a network of 15-20 “Manufacturing Innovation Institutes.” A collaboration among businesses, research universities, and government could help “ensure that the next generation of products are invented and manufactured here.” The development of the Internet — which evolved through universities participating in the Defense Advanced Research Projects Agency (DARPA) — could serve as a model for how such a partnership could work. More ominously — as Business Insider points out — so could the World War II-era partnership between the U.S. government, industry leaders, and the University of California at Los Alamos, which resulted in the atomic bomb.
CNN Money’s Chris Isidore agrees that our exports have increased, but points out that our imports have also increased, leaving barely a dent in our trade imbalance. Some experts — including Robert Reich (Secretary of Labor under the Clinton administration) — express skepticism about whether manufacturing offers the answer to the middle class’s economic woes. In his February, 2012 article for the Christian Science Monitor, Reich explains: “The real issue isn’t whether and how we get manufacturing back. It’s how we get good jobs and good wages back. And they aren’t at all the same thing.” He goes on to explain that US manufacturers are “doing wonderfully well,” and the real problem is “the declining power of American workers to get a portion of the gains. That’s why we need strong unions.”
Increase Domestic Energy Production (Points 6-10)
Increasing domestic energy production seems like a no-brainer, since it would create jobs, reduce dependence on foreign oil, decrease energy costs, and diminish our carbon footprint … But leave it to resourceful Americans on both sides of the political aisle to find issues they can vehemently object to:
6. Increase exploration and development. Tired of those danged mullahs in Iran sticking it to us with high gas prices? No problem, we can drill ’n’ hydro-frack our own. Obama cheerily pledges to open up “millions of acres for exploration and development, including undiscovered oil and gas resources in the Gulf of Mexico and the Arctic.” But wait … there’s a REASON why we aren’t ALREADY drilling and fracking in these places … because nobody wants this stuff going on anywhere near them, due to earthquakes, oil spills, pollution, unsightly installations, and other inconveniences. Hey, kids, it’s the new NIMBY (Not In My Back Yard), and it’s gone totally BANANAs (Build Absolutely Nothing Anywhere Near ANYTHING)!
7. Invest in clean energy. Obama calls for big investments in carbon neutral energy sources, like wind and solar. What’s not to love? Other than the facts that the sun and wind are often unreliable, and their energy can only be captured and saved in very limited quantities (though that could improve — see item #8 regarding high tech batteries, below). Technology is improving, but it still takes a huge bank of solar panels the size of a small living room to provide enough electricity to this writer’s mom and step-dad, who live off the grid — and very sparingly — in the Bahamas. Their power supply is adequate, but it’s a good thing my mom adores mathematics: Living off-the-grid requires a LOT of calculations concerning electric usage vs. available kilowatts, despite the long hours of sunlight. As for wind energy, that’s great, as long as you’re not among the half million birds killed by wind turbines each year. And please don’t get the psycho, anti-government, Ayn Randers started on Solyndra — a promising solar company that got the rug ripped from under them when Chinese companies stole their technology and flooded the market with cheap solar panels. Oh, and did you know that Obama’s big tent of “clean energy” now includes “clean coal” and “safe nuclear” plants under its all-encompassing umbrella? D’OH! I feel like such an (oxy)moron!
8. Double down on fuel economy. Obama wants to ramp up standard mileage for cars and light trucks to 54.5 miles per gallon by 2025, which will reduce oil consumption by 2.2 million barrels a day and save consumers more than $8,000 per year at the gas pump. This all sounds impressively sleek, shiny, and futuristic, unless you’re old enough to remember the energy crisis throughout the 1970’s, followed by — and strongly related to — the Iran hostage crisis of 1979-1981. Back then, you could easily snap up one of those cheap, teensy, new-fangled Japanese gas-sippers that got 40-50 miles per gallon, easy! Back then, the sort of cheap, poorly made crap that now says “Made in China” used to say “Made in Japan,” so you had to be totally desperate to try one of these things. But lots of folks really WERE desperate — hammered by high gas prices, stagflation, and waiting on long lines for gas (you had to plan ahead because your turn alternated, based on whether the first or last number — I can’t remember which — on your license plate was even or odd). One day in 1979, my dad took took the plunge and bought this silvery, new-fangled, pod-shaped thang called a “Celica” from this Japanese company called “Toyota.” Since it looked like something from the Star Trek episodes we regularly watched, plus we now had extra time and money for Dunkin’ Donuts or White Castle stops, I was totally down with that “Celica” thang. But seriously, please don’t expect me to feel impressed with a measly 54.5 miles per gallon by 2025, when my dad drove a car that got 50 MPG highway way back in 1979, before some of you young whippersnappers were even born!
9. Lead the world in high-tech batteries. Obama wants to extend tax credits to support manufacturing in industries related to clean energy, and particularly wants the good old U.S. of A. to emerge as the “world’s leading manufacturer of high-tech batteries.” Personally, I would rather be the “world’s leading manufacturer of fabulous hair,” but on second thought, high tech batteries are a good thing, too — as anyone who constantly has to recharge their iPhone can appreciate. Long-life, lightweight batteries that can be recharged quickly and disposed of safely are the Holy Grail for campers, electronics manufacturers, and parents of children who love battery-operated toys alike. There are some highly promising technologies out there, including: photovoltaic paint that turns any surface into a battery; lighter and longer-lasting lithium ion batteries, and even the formerly novel combination hand-cranked and solar-powered emergency radios which are now commonly available.
10. Mandate 80% clean electricity by 2035. Obama wants to create a universal standard for utility companies to ensure that 80% of America’s electricity comes from clean sources by the year 2035 — 32 years from now. This would give us “cheaper, more secure energy” while creating a new market for American manufacturers. For a quick overview of your electricity’s cleanliness (based on power grid information from 2009) visit the Environmental Protection Agency’s “Power Profiler” page and type in your zip code. You can then select your power company from a pull-down list (if your area has more than one) to display a page that shows how your “fuel mix” (energy sources) and emissions rate compares with the rest of the country. Here in San Jose, CA, our nitrogen oxide, sulfur dioxide, and carbon dioxide emissions are well under half the nation’s average, but the amounts of fossil fuels (gas and coal) we consume are through the roof!
The New Economic Patriotism: A Look At Obama’s 27-Point Economic Plan