As Standard & Poor’s lowered the U.S. credit rating from AAA to AA+ in an historic move last Friday, the president called jobs his “singular focus.” In December 2010, he announced a “pivot and focus” on jobs. The previous year he called it "a sustained and relentless focus.” Financial markets have voted with their feet, as investors have reduced equity values by more than 11 percent in the past week.
And yet every time there’s talk about rebuilding the nation’s jobs-machine, elected officials get pulled off course by distractions like partisan showdowns over the budget and debt ceiling; overhauling the health-insurance system; wars in Iraq, Afghanistan and Libya; the Gulf oil spill; and the Japanese earthquake and nuclear disaster. Given the country's deep fiscal troubles, our government leaders’ inability to maintain focus on such a fundamentally important issue as job creation is particularly worrying. If concerted actions aren't taken immediately, America may lapse into Japanese-style malaise.
Right now, the United States has its lowest percentage of citizens in modern times – less than 55 percent – working in full-time jobs. The 25 million workers (16.2 percent) unable to find full-time work and the hundreds of thousands dropping out of the workforce every month must wonder if the president and congressional leaders are serious about the real issues the country faces: no growth and no jobs.
Want to know how to rebuild the U.S. economy and generate jobs? Ask the CEOs who create them. In recent weeks I have had conversations about this subject with dozens of business leaders. They believe the debates in Washington that virtually shut down the government in April and again this summer are largely irrelevant to what’s required for America to regain its economic might. As politicians debate how to divvy up a shrinking pie (Democrats want the wealthy to support the economically less fortunate, and Republicans want people to keep the money they have earned), CEOs want to focus on how to expand the pie for all stakeholders: their customers, employees, shareholders and society-at-large.
If growth opportunities and the U.S. business climate are attractive, they prefer to invest here, but today that’s hardly the case. With domestic growth approaching zero and the regulatory, tax and political climate getting worse, CEOs are investing in rapidly growing emerging markets in Asia, Latin America and Middle East – and jobs follow markets. That’s not a philosophical view. It’s purely pragmatic.
So what would business leaders advise government leaders do to restore America’s growth and improve its economic competitiveness?
1. Restore fiscal stability by bringing revenues and expenditures in line. With the debt downgrade, the U.S. government has no fiscal capacity to subsidize more government jobs, especially short-term ones like the 2009 stimulus package did.
2. Create a positive climate for business investment, like we had in the 1980s and 1990s under Republican Presidents Ronald Reagan and George H. W. Bush and Democrat Bill Clinton.
3. Restructure the corporate tax code by eliminating complex deductions and credits in exchange for a globally competitive corporate rate of 20 percent.
4. Expand the portfolio of John Bryson, President Obama’s nominee for Commerce secretary, to focus on innovation and job creation. Charge him with working with business to expand exports and new company start-ups, along with leading job growth in large and small companies.
5. Ease the constraints of government regulation, legislation and litigation. For example, get Boeing's dispute with the National Labor Relations Board settled so the company can add 10,000 new jobs to build the 787 Dreamliner in South Carolina.
6. Declare a one-time repatriation tax holiday through 2012. This would enable companies willing to commit to firm investments in factories, research and job creation to bring back the $1 trillion in cash trapped off shore.
7. Pass the free-trade agreements with South Korea, Panama and Chile. President Obama must become the advocate for exports and get behind free trade globally.
8. Increase the number of H1-B visas, travel visas and green cards to make America once again an attractive place for immigrants to visit, work and start companies. With thousands of jobs going unfilled in Silicon Valley, we’re encouraging companies to move skilled worker jobs to India and China.
All of these steps are doable without increasing deficits. What they will take is courageous leadership from President Obama to ignore the extremists in both parties and commit fully to economic and jobs growth as his No. 1 priority, even if he has to expend some of his political capital.
President Clinton did so in 1995 in the face of strong Republican and Democratic opposition. He was re-elected, and the nation added 23 million jobs. Now President Obama needs to move from rhetoric to action to restore America's fiscal stability and put Americans back work.
Bill George is a professor at Harvard Business School, the former chairman and CEO of Medtronic, and author of four bestselling leadership books, including
From the roundtable:
Paul O’Neill: Only presidential leadership can restart America’s engine
Bill George:Enough talk about jobs—where’s the action?
Michael Useem: Revising investor capitalism’s mantra
Katherine Tyler Scott: A moral imperative on unemployment
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