Maybe they’ll get around to it. But the three major presidential candidates still in the race have little of substance to say about the issue Americans say is their top concern – jobs.
Democrat Hillary Clinton said recently she’ll delegate the job of revitalizing the economy to her husband, former president Bill Clinton. That’s obviously meant to evoke the prosperity of the 1990s, under Clinton’s two terms in office. But it gives the impression that Clinton (Hillary, that is) views the economy as a minor matter that can shuffled off to an unelected official. “Strong as Bill Clinton’s record was, Hillary Clinton was ill-advised to pitch him as Econ czar,” Democratic operative David Axelrod tweeted. “Folks will be looking to HER for that!”
Republican Donald Trump focuses mostly on what’s wrong with everybody else’s policies than on fresh ones to boost the economy. The nucleus of his economic plan, if there is one, is imposing new tariffs on cheap imports from China and other low-cost manufacturing centers. That, in theory, would make imports costlier and give American producers an edge, but that’s a big leap away from more manufacturers opening here at home and creating more jobs. Some of that manufacturing might shift to even lower-cost countries such as Vietnam or Bangladesh. In the meanwhile, higher tariffs might cause a recession that would harm, not help, the typical worker. If higher tariffs would create any jobs, they’d probably materialize many years later.
Clinton’s Democratic rival, Bernie Sanders, wants to break up the big banks, make public colleges free to everyone, hike taxes on the wealthy and establish “Medicare for all.” But none of that necessarily entails creating new jobs, and some of Sanders’ proposals could kill jobs if, for instance, the government spent so much on new benefits that it had to impose layoffs or hiring freezes.
The economy creates good jobs when it’s growing, and the stronger the growth, the more good jobs. Growth of around 2% now has created an average of about 225,000 new jobs per month, which is a good pace – but many of those positions are low-paying ones insufficient for supporting a family or paying off student loans. The disappearance of good jobs and intensifying financial strains on the middle class are clearly one reason so many voters have flocked to the insurgent campaigns of Trump and Sanders.
Yet Trump is a protectionist and Sanders is a socialist, two persuasions economists associate with economic stagnation rather than prosperity. Clinton has more detailed economic proposals than Trump or Sanders, but they’re heavy on union protections, minimum wage hikes and other government mandates rather than capitalist incentives more likely to trigger job creation in the private sector, which has always been the pathway to prosperity.
The way to more jobs
So what should the candidates be saying about jobs? The starting point probably needs to be government incentives for private-sector companies to invest more, and do it here in the United States, which must include a simpler corporate tax code with fewer tax loopholes. Some Democrats think this is just the same old supply-side wishful thinking that has never really worked, but it’s not. The U.S. now has one of the most inefficient tax codes in the developed world, which is why American companies seek tax inversions and are presently stashing something like $2 trillion in cash overseas. Other nations have been streamlining their tax codes and cutting rates, leaving the United States with an outdated tax structure that negates other advantages of the U.S. economy. Fixing that is simply a matter of remaining competitive.
Enhanced infrastructure spending, something Democrats like more, should also be part of an aggressive jobs program, especially since low interest rates make it a bargain to finance road and bridge repair and other such projects. The government doesn’t even need to foot the whole bill, since new forms of public-private partnerships can reduce the cost to taxpayers while tapping private-sector management skills.
Economists broadly agree that free trade boosts growth while protectionism depresses it. So instead of threatening to hike tariffs or close trade routes – as all three candidates have, to some degree – the candidates should support free trade with an important new twist: generous programs to help those left behind, such as job retraining for displaced manufacturing workers, placement programs that guide people to real jobs with U.S. companies, relocation assistance when necessary, and perhaps other aid for those sidelined indefinitely.
It’s too hard to start a business in the United States, partly because a thicket of overlapping federal, state and local regulations forces some entrepreneurs to spend more time filling out forms than selling their product or service. It’s possible to have shrewd regulations that protect workers, consumers and the environment without strangling businesses, and the candidates should back efforts to prune red tape and get regulators out of the way wherever possible.
Finally, the candidates could address the $19 trillion national debt and mushrooming entitlement costs, which may already be hamstringing economic growth. That entails uncomfortably honest talk about tax hikes and benefit cuts – which are inevitable at some point – but there's an upside, too. “Explain the aspirational piece of this,” advises Maya MacGuiness of the Center for a Responsible Federal Budget. “If we fix this problem, our economy can truly be the strongest one there is in the world.” That sounds a lot better than bemoaning how great America used to be or how unsatisfying it is now.
Rick Newman’s latest book is Liberty for All: A Manifesto for Reclaiming Financial and Political Freedom. Follow him on Twitter: @rickjnewman.