Obama should supercharge manufacturing in broken cities
President Obama’s speech on the economy on Wednesday will be closely watched. My own view is that the president has been consumed with military and surveillance efforts and has lost sight of his role as the nation’s economic leader. His efforts to recharge the economy thus far seem like a re-branding effort. But we need bigger ideas. I hope he has some, a clear schedule and lots of initiative. Charging up the world’s largest economy is no easy task. Reuters’ Mark Felsenthal and Roberta Rampton tell the story:
Obama has focused much of his energy in the first six months of his second term on an array of domestic and foreign issues. But on Monday, he told a gathering at a downtown Washington hotel that economic issues would now take priority over others, specifically mentioning gun violence and his plan to address climate change.
I’m already sensing a drift in mission. Reducing gun violence and addressing climate change are vital for our nation, but they are rarely thought of as economic issues. And then there is the reality of Congress’ schedule. Congress breaks in August, leaving four weeks of legislative activity before the government funding deadline, according to Reuters.
Reuters reported on Sunday on the upcoming speech:
Obama has pitched economic ideas in his second term, including the development of a new network of manufacturing hubs, an infrastructure jobs program, investments in education and a hike in the minimum wage.
He has urged Congress to lower the corporate tax rate, particularly for manufacturers, and raise taxes on the rich.
There are some kernels of good ideas in there. I have advocated that the federal government give very aggressive tax breaks and incentives to manufacturers willing to set up in distressed cities like Detroit. By aggressive tax breaks, I mean zero federal corporate and income taxes (cap salaries that are tax-exempt at $75,000 or something), and especially if matched by the local community and state tax breaks. This would be an expansion of an old and currently operating program in Housing and Urban Development called Empowerment Zones. Consider granting these tax breaks for 10 to 20 years. The goal is to bring manufacturing back from overseas.
How could President Obama jumpstart our economy? By leveling the playing field for manufacturers to produce goods and jobs in our distressed urban areas. I bet he could get Republican support for this approach.
Think big and bold, President Obama. Our powerful economic engines are barely idling.