President Obama may have predicted gloom and doom when his "jobs bill," sequel to the trillion-dollar 2009 stimulus bill, failed to pass. But its defeat is actually good news for America's near- and long-term economic prospects.
Other good news came when Congress ratified three free-trade agreements that will create lasting jobs. They had been stalled for years because of the president's inaction. Let's hope the White House learns the right lesson from the jobs-bill episode, and that these welcome advancements toward free trade begin a trend.
The president's latest stimulus-jobs plan was a distressingly familiar hodge-podge. There was class warfare (tax increases), special-interest giveaways ("infrastructure bank"), unsustainable spending (propping up unionized state and local government payrolls) and political stunts (ludicrously inadequate hiring tax credit and protectionist "Buy America" provisions).
Announced in a hastily-called post-Labor Day televised joint session of Congress before the bill was even drafted, the president's plan was haunted from the get-go by the air of re-election campaign desperation, the track record of previous policy failure, and the half-trillion dollar price tag. That there was no sense of surprise or outrage when the plan was defeated a few weeks later is quite remarkable, in view of America's ongoing unemployment crisis. The official unemployment report counts 14 million Americans as out of work.
And even that horrific number understates the problem. Millions of Americans have lost hope, stopped looking and been out of the workforce for so long that they are no longer factored into the unemployment statistic.
And there is the problem of "underemployment." More than 9 million American workers are what the Bureau of Labor Statistics refers to as "involuntarily part-time" because their employer reduced their work hours or they have simply been unable to find a full-time job.
Even with 23 million Americans and their families suffering so personally from the lack of job creation, there still was not a critical mass of support for a presidential "jobs plan." That certainly attests to a widespread lack of faith in its content.
Hopefully, the White House is beginning to realize that there is no getting around the fact that its record on jobs is going to be measured in the coming year on private-sector job creation, rooted in an economic environment favorable (over the long term) to free enterprise. Most Americans, employed or unemployed no longer find debt-fueled, or tax-fueled, temporary government spending stimulus credible.
Yet even amid the fog of Washington rancor and rhetoric these past few months, some real bipartisan progress was made in an arena critical to America's near- and long-term economic prosperity. That was the belated ratification of the Korea, Panama and Columbia free-trade agreements. President Obama has long spoken eloquently on the virtues of free-trade agreements.
Before the London G-20 summit in 2009, the president declared: "We should embrace a collective commitment to encourage open trade and investment, while resisting the protectionism that would deepen this crisis."4 comments on this story
Yet his administration failed until now to advance trade agreements that could have been ratified in 2009 and been helping to create jobs since then. And his first stimulus bill in 2009 and the stimulus-jobs bill he championed this fall both contained protectionist measures.
Experts at the U.S. International Trade Commission anticipate that the trade agreement with South Korea alone could foster 280,000 jobs for Americans and boost U.S. exports by more than $12 billion. Columbia is the third largest economy in Central and South America and there will no longer be tariffs on 80 percent of the consumer and industrial goods that the U.S. exports there. Panama will eliminate 88 percent of that country's tariffs on U.S. consumer and industrial goods.
To help America's unemployed, in these trade agreements should be the seeds of a new administration approach to economic recovery. This administration has been unrelentingly hostile to America's private sector, and workers suffer for it. To promote American competitiveness and job creation, the administration should advance more trade agreements and start providing America's private sector immediate and significant relief from punitive and unpredictable taxation and excessive regulations.
Elaine L. Chao served as U. S. Secretary of Labor from 2001-2009 and is now a Distinguished Fellow at The Heritage Foundation.