Two misconceptions need to be challenged

“Innovation is portable,” said David Smick, an economic advisor to Congressman Jack Kemp and Presidents Ronald Reagan and Bill Clinton, in his book “The World is Curved.” In essence, innovation will occur where it is welcome and the initial jobs will be created around it. We should not lose sight of this observation as we discuss our economic future.

Smick surprised many when he noted in his book the similarities in Bill Clinton and Ronald Reagan, who were the number one and three best job creating Presidents, in that order. They both loved global trade and hated deficits. And, they were known for their collaboration with Congress, even with an opposite majority in power. Collaboration is essential to getting buy-in and understanding of the problem and possible solutions.

With this context, we need to challenge some notions that do not tell the whole story and, as a result, could lead us down the wrong path. We need to look at holistic causes to problems, so that we can address them effectively. Our problems are not solvable by bumper sticker solutions, no matter how loudly and forcefully they are espoused.

Here are two of those simplistic notions and challenges to think about:

Immigration is taking jobs away. This is far too simple a statement. Our history has been built on immigration, who have tended to be hard workers and spawned a higher relative percentage of entrepreneurs. As noted in the famous play “Hamilton,” by Lin-Manuel Miranda based on the book by Ron Chernow, immigrants tend to work hard to make it in our country, as they did not have such opportunity from whence they came. Our economy actually flourishes more with immigration. But, as we look to better govern immigration, we should look at the whole picture. And, on the subject of illegal immigration, a concerted study of the impact of curtailing such on certain industries – housing construction, landscaping, agriculture harvesting, etc. – is critical as we move forward with better governance.

Global Trade is bad for domestic jobs. Global trade is actual good for a domestic economy creating more jobs around the world and here. The downside is companies tend to chase cheaper labor and always have, but an even greater threat to jobs is technology advances. A CFO said in the book “The Rich and the Rest of Us,” an employer will hire no one if he could make it work. Yet, what creates jobs more than anything else is “customers,” per Nick Hanauer, a venture capitalist. And, more trade means more customers. When we look to better govern trade, we need to look holistically at the jobs created domestically versus the ones lost. The ill-fated Brexit decision failed to consider all of the foreign companies who have European Headquarters, distribution and manufacturing sites in the UK. These companies are now reconsidering locations should Brexit move forward.

Of course, we need to better govern immigration and global trade, but we must guard against throwing the babies out with the bath water. Let me close with three thoughts.

First, we cannot shrink to greatness. Retrenching from your global market share makes little sense.  Second, think of all of the foreign companies who employ people in the US like Michelin, BMW, Mercedes, Husqvarna, Doosan, Volvo, Nissan, etc. who do so to keep manufacturing near distribution of its goods to their customers. Third, as an example, Steve Jobs is the biological son of Syrian immigrants. Had he not been in America, would Apple exist today at all or as an American company?

We cannot govern off bumper stickers. Our issues are complex. People who tout such ideas are doing a disservice to the problem and citizens through false promises.

 

 

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16 thoughts on “Two misconceptions need to be challenged

    • Thanks Linda. Too many believe these pat answers, so politicians need to shoot straight. I was very impressed with Bernie Sanders when he stood up on front of coal miners and said your jobs are not coming back. Then, he explained his plan to retrain and offer transitional compensation.

      • His direct honesty is what earned him such high regard. That, at least, is a hopeful sign that the entire electorate has not abandoned logic.

      • Linda, should Clinton win and help cause the Senate majority to flip, both Bernie Sanders and Elizabeth Warren will play major roles in helping address economic and social injustice. That will be a huge thing. Keith

    • Hugh, we look for those elusive panaceas that do not exist. Alabama came down hard on illegal immigrants and crops rotted in the field as harvesting jobs is hard work and very few wanted the jobs. Keith

  1. Dear Keith,

    You make excellent points. The bumper sticker solutions are cons. We need immigration. The question is facing up to this and managing it. For example, we know certain industries need immigrants, so there should be work visas or some alternate idea to do this legally.

    We need trade. There should be ways to enhance any agreements that are negotiated to help the worker transition or to promote the creation of small businesses so that anyone can participate in the benefits of trade..

    Then there has to be ways to reward businesses who are good community members. For example I have been troubled by companies earning record profits, top executives earning mega monies without raising the wages of their employees over many years. I am convinced that this greed is part of the causation of the Trump coalition.

    What is needed are good ideas, holistic creative solutions, with competence and not bumper sticker, short sighted solutions like “no more taxes.”

    • Gronda, you said it extremely well. Work Visas would be a great way to involve foreign workers, glean taxees and track people. It is all about assessing the problems and coming up with well-thought solutions. Thanks for your thoughtful comments, Keith

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