I just read Bill Clinton’s new book titled, Back to Work. It is a good read, with historical reflections on the past 40 years, and offers pragmatic advice for our current President and Congress to address the continuing economic crisis.
Mr. Clinton also has some observations that offer a slightly different twist on the debate between those who think that government is the problem and those who think that it is the answer. In between those two sides is his recommendation for a smart government that is lean and aggressively manages its budgets while still focusing its resources for the greatest economic growth.
Mr. Clinton starts with three-part strategy to put a lot of people back to work now. First, he wants the banks and corporate entities holding nearly $4 trillion in reserves to get that money back into the economy quickly. Second, he wants to concentrate on areas most likely to produce good jobs that have a positive ripple effect…jobs in modern infrastructure building, high-end manufacturing, green technologies and exported goods and services. And third, he recommends numerous other ideas that will, collectively, make a substantial impact now and increase long-term economic growth.
He admits that getting the money flowing again is much tougher following a financial crash. Reluctance on the part of banks, businesses, corporations, and consumers creates a negative atmosphere and a pessimistic business climate. Nevertheless, banks are sitting on over $2 trillion in excess reserves. Having the leverage to lend $10 for every dollar banks hold in reserves, they have the capacity to stimulate a sizeable recovery. Unfortunately, loan demand is weak and banks are extremely cautious.
So, how do we unlock the money? Here are just 20 of his 46 proposals.
1. End the mortgage mess as quickly as possible.
2. Let people with government-guaranteed mortgages who are not delinquent refinance their mortgages at the current low interest rate.
3. The Federal Reserve should give the banks an incentive to lend.
4. Give corporations incentives to bring more money back to the United States.
5. Let companies repatriate their cash now with no tax liability if the money is reinvested to create new jobs.
6. Pass the payroll tax cuts.
7. Build a 21st century infrastructure.
8. Speed up the process of approving and completing infrastructure projects.
9. Launch an aggressive 50-state building retrofit initiative.
10. Get the pension funds involved.
11. Paint all roofs white.
12. Reinstate the full tax credit for new green technology jobs.
13. Finish the smart grid, with adequate transmission lines.
14. Turn more landfills into power generators.
15. Develop our natural gas resources.
16. Get the military involved to speed our energy transformation.
17. Concentrate on high-end manufacturing and getting smaller companies into exports.
18. Negotiate long-term contracts to sell food to China, Saudi Arabia, and other nations facing food shortages.
19. Increase the role of the Small Business Administration.
20. Promote crowd-funding to help small businesses raise capital.
Mr. Clinton offers another two dozen ideas on top of what I have listed for you. His is the most extensive list of ideas that has been constructed in recent years.
The New Year will surely be consumed with our presidential and congressional elections. Wouldn’t it be nice if we could get the candidates focused on new ideas for job creation rather than simply passing blame back and forth between democrats and republicans or between the White House and Congress?
We must make our future more productive and less focused on pointing fingers. We need to be creating businesses for our future instead of wishing for the past. We cannot afford to be stagnant or to go backwards. Our challenges grow tougher the longer we put them off.
Bravo to Bill Clinton for bringing original thinking to the fore! Let’s bring new resolve to have more of the same in the New Year!