Wednesday, August 03, 2011

As Obama turns his attention back to the economy, it is important that the GOP have their act together. Granted, Obama doesn't have a lot of credibility on the 'job creation' front, but the GOP can't sit back and let Obama take the lead...

Here's what the GOP needs to do:

* Undercut any public enthusiasm there might be for yet another stimulus. Not, as the GOP is likely to do, by arguing that such a stimulus would add to the deficit, but rather by pointing out how much of a failure the previous Obama stimulus was, calling into doubt Obama's ability to get anything right on the economic front... and by challenging the very concept of government having the ability to 'create' permanent and well-paying jobs. Government can create a favorable environment for entrepreneurs and businesses to hire, but no matter how many borrowed dollars it spends, it can not create real jobs.

* Pursuant to the above point, have legislation prepared that will improve the environment so businesses could feel more comfortable adding employees. Raise the threshold for the number of employees that subject businesses to costly new regulations. Impose a moratorium on any new federal regulations. Lower the minimum wage.

* Allow multi-nationals to bring profits back into the country without incurring additional tax provided they pay that amount out in the form of shareholder dividends and/or bonuses to existing employees (and on a permanent basis, not just one time). This would generate some additional tax revenue, in the form of taxes on the dividends and bonuses, and the bump in the amount of money in circulation ought to translate into a boost in consumer spending.

* Pass legislation to increase domestic oil exploration and development. Nothing saps the economy like money for oil that flows out of the country. Granted, oil from these projects won't reach the pump for a number of years, but the fact that more oil is in the pipeline should have a deflationary effect on current gas prices. In addition, the tens of thousands of oil field workers that would be hired would take a nice dent off the unemployment rate.

* Change the rules to allow banks to more easily foreclose and resell homes where the current homeowner is two years in default on their payments. Yes, most people feel sorry for the poor homeowner that will lose their home, but we don't feel so bad that we're going to let them continue to serve as a damper on economic growth. Get the people who can't (or aren't) pay out of the houses and get people who can and will pay in. These new homeowners will not only take far better care of these houses, they (as is almost always the case with new homeowners) will go out and spend money and furniture and other stuff, all of which will provide an economic boost. And the sooner the banks can clear out their supply of non-performing home loans, the sooner we can get back to building new homes.

* Declare a net hiring freeze for all government departments (including the defense department). The government could only hire to replace workers who leave. This would send a strong message to the private sector that government will not continue to grow and suck up money that could be better used elsewhere.

Notice there is no tax cuts (except for the repatriating of income). This is because taxes are not the reason businesses aren't hiring. They're not hiring because they think it is a lousy time to do so. You could let them keep a larger percentage of their profits and it would still be a lousy time for hiring lots of people.

As I said, the GOP can't stand by and let Obama frame the debate. They need to have their own ideas on getting the economy growing again. There's little chance any of these will ever get enacted (especially with Obama in office), but it does nicely define the battle lines: Obama believes in big government, the GOP believes in not standing in the way of businesses who want to grow. That's a debate I am pretty sure we can win.

UPDATE: even though she's as vapid as vapid can be, DNC head Debbie Wasserman Schultz stumbles on something the GOP has to worry about. She bemoans the lack of a 'jobs bill' coming out of the GOP controlled House. Repeating myself, it is critical that the GOP not cede the high ground to the Democrats... which includes denying the Democrats the opportunity to complain about what the GOP isn't doing. It isn't sufficient to point out that the Democrats didn't do much when they controlled the House, the GOP has to show it can go on the attack, offering up concrete legislation which it can argue will get the country moving forward again. And when the Democrats refuse to get on board, the GOP can hit them with that.