Third World America (21 page)

So what can we do to turn around this sorry state of affairs?

For starters, we have to start looking at things in daring and different ways. To paraphrase Einstein, you can’t solve a problem using the same type of thinking that created it. Unfortunately, in our current political climate, it’s nearly impossible to get people to stop protecting their little parcels of partisan turf and start thinking on a different level, allowing them to connect the dots and see the possibilities that might lie on the other side of the mountain.

And what I see on the other side of that mountain is a single-payer system of education.

Single payer never made it out of the gate when it came to health-care reform. But we should bring it into education reform.

In a single-payer health-care plan, the federal government provides coverage for all U.S. citizens and legal residents. Patients don’t go to a government doctor—they just have the government pay the bill. And that’s how it would work with education. In a single-payer education plan, the federal government, in conjunction with the states, would provide an education allotment for every parent of a K–12 child. Parents would then be free to enroll their child in the school of their choice.

In a single-payer health-care plan, all citizens would be free to select the physician and hospital of their choice. And, unlike in our education system, no one backing single-payer health care ever suggested that patients can see only a doctor
in their own district or can be operated on only at the hospital down the street. If we don’t hold our health hostage to the value of our property, why do we do this with our children’s education? The annual educational cost per child—equalized for urban and suburban school districts across each state—would come from current education funding sources.

When it comes to quality control, in health care the guidelines incorporated by Medicare are used to manage the quality of health-care services. In education, the government would be responsible for accrediting the schools from which parents could choose.

It’s simple, sensible, and, above all, just. And maybe instead of calling for an exorcist any time the words “competition,” “choice,” or “freedom” are used in connection with education, we can start singing hosannas for an idea that preserves what is truly public in public education—the government, that is, the public, paying for it—while allowing creativity, innovation, and parental empowerment to flourish.

In January 2010, during his State of the Union speech, President Obama declared, “Jobs must be our number one focus in 2010.”
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This was followed by a round of applause—but very little action. What else is new?

Everybody is in such total agreement we need “more jobs” that the words are in danger of becoming meaningless, of going from tangible policy to talking point. In Washington, saying you’re for jobs has become just another obligatory, perfunctory throat-clearing preamble.

But we need to move beyond the lofty rhetoric and the desultory statistics and focus on the fact that every lost job is a social calamity.
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Child abuse and neglect, divorce, crime, poor health, and drug addiction are often the devastating side effects of job loss. No country can be considered healthy when twenty-six million of its people are out of work or underemployed.

The current job crisis is simply too large and too stubborn—and the suffering too great—to do anything less than be as bold as possible.

The first thing we should do is have the federal government offer direct aid to local and state governments. Since August 2008, more than 150,000 state and local jobs have been eliminated, and the states’ combined budget gap for fiscal 2010 and 2011 is $380 billion.
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The Center on Budget and Policy Priorities estimates that state and local deficits could cost the country an entire point off the GDP, which would, in turn, lead to the loss of another 900,000 jobs next year.
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This is why the Economic Policy Institute (EPI) recommends the federal government spend $150 billion on aid to state and local governments over the next year and a half, an investment that would save up to 1.4 million jobs.
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Congress and the president should also push through a muscular plan to create public-service jobs. “The federal government could provide jobs by … providing jobs,” writes Paul Krugman.
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“It’s time for at least a small-scale version of the New Deal’s Works Progress Administration.… There would be accusations that the government was creating make-work jobs, but the W.P.A. left many solid achievements in its wake. And the key point is that direct public employment can create a lot of jobs at relatively low cost.”

In fact, the EPI estimates that one million jobs designed to “put unemployed Americans back to work serving their communities” could be created with an investment of $40 billion a year for three years.
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This approach is also favored by Princeton’s Alan Blinder.
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“Direct public-service employment is straightforward,” he says. “As long as the new government jobs do not compete with the private sector, the net job creation should be one-for-one. So hire people to repair parks, not shopping malls.”

We may have missed the chance to put rebuilding America’s infrastructure front and center in the big stimulus package Congress passed in 2009, but we absolutely must redouble our efforts to do so, in the process creating millions of high-paying jobs that can’t be outsourced.

One way to finance the massive rebuilding effort that is needed is through a national infrastructure bank.
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Modeled after the European Investment Bank, which has been successfully investing in European energy, telecommunications, and transportation infrastructure projects for more than fifty years, the U.S. version would use federal seed money to leverage private dollars for investment in high-priority rebuilding projects across the country.
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An investment of $25 billion in government funds could leverage more than $600 billion worth of projects.
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That won’t cover the $2.2 trillion needed to bring our infrastructure up to an adequate condition, but it’s a significant start—and would be a powerful engine for job creation.
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Washington needs to get its act together.
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The creation of a national infrastructure bank was first proposed in 2007. And even though President Obama threw his weight behind the legislation in early 2008, Congress was still holding hearings on
the matter in mid-2010. It’s time to up the intensity and move this idea from the drawing-board stage to the action stage, fixing roads, bridges, sewers, and electrical grids and laying high-speed rail tracks.

We also need to pass a comprehensive legislative package to plug the drain of jobs heading overseas. It must include tax credits for companies that keep and create jobs for American workers and close loopholes that encourage employers to ship jobs abroad.

It would also be smart to incentivize green jobs. Investing in renewables will both lessen the likelihood of another disaster, like the BP one in the Gulf, and tap into a multibillion-dollar world market, creating an explosion of well-paying high-tech jobs and nurturing the next generation of job-creating entrepreneurs.

To take just one example, as the rest of the economy was shedding jobs in 2009, the solar energy industry added nearly twenty thousand.
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The Solar Energy Industries Association estimates that the solar industry could add up to 200,000 jobs over the next two years if Congress renews various incentive programs that are expiring in 2010.
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Another way of promoting the green economy would be the creation of a national green bank, which, in the words of John Podesta and Karen Kornbluh of the Center for American Progress, would “open credit markets and motivate businesses to invest again,” and “enable clean-energy technologies—in such areas as wind, solar, geothermal, advanced biomass, and energy efficiency—to be deployed on a large scale and become commercially viable at current electricity costs.”
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Such a bank would help loosen the available credit for small businesses and establish a reliable source of funding for
entrepreneurs who wish to devote themselves to green technologies and start-ups.

Reed Hundt, the Federal Communications Commission chair under President Clinton, is the head of a group called the Coalition for Green Capital, whose goal is “to establish a government-run non-profit bank that would fill the void that exists in clean-energy legislation in America today.”
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According to Hundt, a green bank would create “about four million jobs.”
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Hundt’s proposal has been included in several House and Senate climate and energy bills. And he is in talks with state governments to help them set up their own green banks.

Small businesses have long been the biggest creators of American jobs. According to a May 2010 report by the Congressional Oversight Panel, “More than 99 percent of American businesses employ 500 or fewer employees … and create two out of every three new jobs.”
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And there are many ways we can help support them: Expand the Small Business Administration’s lending programs; enact a one-year payroll tax holiday (creating a moratorium on Social Security, Medicare, and FICA taxes that will encourage businesses to hire new workers); offer businesses a tax credit for every job created over the next twelve months; and use bailout funds left in the TARP program to bail out Main Street (via increased lending to small businesses and funding of public services being cut by states and cities).

Even more important than helping small businesses is helping new businesses.
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According to economist John Haltiwanger, a study of the past twenty-five years shows that roughly one out of every three new jobs is created by a start-up company. “These are the rocket ships of the economy,” he says. As reported by
Time
, from 1980 to 2005, “the typical fifteen-year-old
firm added jobs at a rate of 1 percent a year; the typical three-year-old firm at a rate of 5 percent.”

One innovative way of promoting job-creating start-ups is by tweaking our immigration policy. Great ideas arise from all over the world, and if America doesn’t welcome the people with those great ideas and make it easy for them to come here, they will go elsewhere. Indeed, they already are beginning to do so.

Right now, the United States has an immigration limit for skilled workers of sixty-five thousand, with an additional twenty thousand slots for those with advanced degrees from U.S. universities.
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This kind of rigid cap doesn’t make sense in today’s world. The “visa process has been plagued with backlogs resulting from this quota,” says Jonathan Ortmans, a senior fellow at the Kauffman Foundation, a leading center for entrepreneurship. “As a result, high-skilled immigrants are looking for opportunities elsewhere in an increasingly competitive global labor market, taking their innovative ideas with them.” If America is going to remain a First World country, it is going to have to step up the way it competes for first-class talent and ideas.

The people behind
StartupVisa.com
have a creative proposal for increasing America’s share in the global idea marketplace.
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They want to make it easier for foreign entrepreneurs to come to America and start job-creating businesses. Our current law allows foreign investors to get a visa if they start a business in the United States with $1 million in capital and can create at least ten jobs right off the bat.
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The venture capitalists behind
StartupVisa.com
want to shift the emphasis from investors to entrepreneurs, providing visas to entrepreneurs who can get funding from American investors. The idea
is to reward good
ideas
instead of just bringing in foreign money. The way the law stands now, by requiring those with good ideas to first get foreign funding, we make it more likely they’ll decide to start their companies elsewhere.

The proposal, the StartUp Visa Act of 2010, is already in the legislative pipeline.
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It is being cosponsored by Senators John Kerry and Richard Lugar. According to the
Washington Post
, their bill “would create a two-year visa for immigrant entrepreneurs who are able to raise a minimum of $250,000, with $100,000 coming from a qualified U.S. angel or venture investor. After two years, if the immigrant entrepreneur is able to create five or more jobs (not including their children or spouse), attract an additional $1 million in investment, or produce $1 million in revenues, he or she will become a legal resident.”

“At a time when many are wondering whether Democrats and Republicans can come together on anything, there is at least one area where we’re in strong agreement,” wrote Kerry and Lugar in an op-ed. “We believe that America is the best country in the world to do business. And now is the time to reach out to immigrant entrepreneurs—men and women who have come from overseas to study in our universities, and countless others coming up with great ideas abroad—to help drive innovation and job creation here at home.”

The senators see the proposal as a jobs initiative, not an immigration reform initiative. As Kerry put it, “This bill is a small down payment on a cure to global competitiveness.”
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Clearly, when it comes to jobs, there is no lack of ideas. Just a lack of political will.

Yes, many of these job-creating proposals are expensive, but, in the long run, not nearly as expensive as long-term unemployment and the disappearance of America’s middle class.

Any time the idea of funding jobs programs or rebuilding America’s moldering infrastructure is raised, our leaders immediately look at the price tag and go into sticker shock: We can’t afford that! But they never seem to have the same reaction when the defense budget races past $700 billion or when it’s time to sign the next check for funding the wars of choice in Iraq and Afghanistan (2010 price tag? $161 billion).
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