In an interview with The Financial Times, American Express Co. (NYSE: AXP) Chief Executive Kenneth Chenault called for the formation of task force among business and political leaders to tackle the unemployment problem. This idea, though well-intentioned, is bad.
“I’d like to see an industry task force between the public and private sectors to determine what businesses need to create jobs,” he told the newspaper.
The Business Roundtable called the idea “very intriguing.” Such a panel, though, would be a haven for political showboating which would likely feature debates over controversies which have waged on for years. There is little chance they would be resolved in this forum.
Unlike the National Commission on Fiscal Responsibility and Reform, the unemployment panel is not dealing with theoretical bad news happening sometime in the future like the deficit. Unemployment is an immediate problem. Politicians understand that few voters understand the deficit. They know about jobs because most have them though many know someone without one. The latest figures show the joblessness rate was 9.8 percent in November, the highest its been since April.
Economists were caught off guard by the report, especially given the strong retail sales reported this holiday season. But what possible ideas could an unemployment panel come up with that have not already been discussed already? Probably not many.
There’s the payroll tax holiday, which has been discussed in the media for months and was part of the recent recommendations by the President’s debt commission. Removing “uncertainty” for business is another perennial favorite of fiscal conservatives. That means easing regulatory burdens and stopping abusive lawsuits.
Removing uncertainty for average people would help too. Someone whose home mortgage is underwater is going to be less apt to spend much on anything else. Ditto for people struggling to maintain their health care. Some Republicans also continue to complain about the rising cost of unemployment benefits, which are a lifeline to many.
Democrats and Republicans have been divided over some of these issues for years, sometimes decades, such as free trade. Business groups including the U.S. Chamber of Commerce argue that these deals, including the proposed agreement with South Korea, will create thousands of new jobs. Organized labor, of course, opposes these types of agreements. A few months ago, AFL-CIO head Richard Trumka argued that the deal with South Korea would “put at risk thousands of good U.S. jobs in the auto, steel and other industrial sectors.”
Let’s not forget about the minimum wage and immigration. Opponents of raising the minimum wage argue that it leads to a loss of entry-level workers, something that liberals deny. The hot-button issue of immigration will also divide the panel. Growing numbers of foreigners have entered the U.S. over the past decade even though there are fewer job. Should the U.S. crack down of migration or roll out the welcome mat for skilled workers?
The American people does not need another august body to pontificate on what ails the economy. The time for talk is over. Now is the time for action.
–Jonathan Berr
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