And what could be a more topical book in light of recent unemployment figures than Bringing the Jobs Home: How the Left Created the Outsourcing Crisis – and How We Can Fix It by Todd G. Buchholz? Buchholz highlights six key areas where policy is harming American economic growth and job creation: litigation costs, education, taxation, regulation, immigration and entertainment. He then spends the next several chapters further examining each aspect and how it’s harming American economic growth – policies that are still stalling the economy even now.
Buchholz begins by tackling immigration and how our current policies cost the U.S. billions every year. For example,the 1965 Immigration and Nationality Acts Amendments sponsored by Robert Kennedy, Ted Kennedy and President Johnson. RFK told the New York Times that the old system would be “replaced by the merit system” but today about 75% of our immigrants come through “family reunification” practices. But educated immigrants contribute more to economic growth – a point our neighbors to the north are using to their advantage. During the 1990s, new immigrants to Canada accounted for 30% of the job growth in computer technology fields. While Canada’s system awards points for education, the U.S. abides by family reunification and luck. While Canada welcomes skilled immigrants, America puts up roadblocks.
When it comes to education, raising test scores even one point would increase annual GDP growth by 1%. That’s enough to create nearly a million new jobs per year and raise incomes by 65% in 50 years. Buchholz notes the reduced quality of teachers through two factors. The first is the loss of women in the teaching workforce to new opportunities for women in other fields that were previously closed to them. The other is the teacher’s unions. His recommendations include voucher programs (like the ones in Vermont and Maine that have been operating since the late 1800s) as well as reforms on teacher licensing. On this latter point, Buchholz asks, “would you rather your son taught physics by a Ph.D. from NASA who took an intensive eight-week course on teaching methods or a graduate of a four-year teaching college who tried to avoid the hard sciences?”
There is, of course, much to be said about the American tax code, and Buchholz tackles a number of points including mentioning some of the hard demographic trends facing the nation as discussed in the book The Coming Generational Storm, which he specifically names. But among the myriad of issues with the tax code he discusses, the disparity between the US corporate rate and that of other countries is notable. Corporate taxes are at 35% while state and local taxes can add another 5%. That’s 1/3 higher than the Organization of Economic Cooperation and Development average. Even liberal Charles Rangel has said, “it is no longer a question of whether the U.S. tax code encourages the export of American jobs. We now know it does.”
Buchholz notes that regulatory problems occur when government intrudes and help existing businesses block new competition. Among his many examples is one from 1898 when the New York medical society tried to stop free vaccinations and diptheria antitoxia by claiming it was “inimic to the best welfare of young medical men.” While government licensing covers 1/5 of the workforce, studies show these regulations do little to nothing to enhance quality or safety. These practices prevent a fluid movement in the workforce by preventing workers from easily moving from one community or state to another.
In 2002 the United States spent more than $233 billion in tort costs, or about 2.23% of GDP. It’s gotten so bad in the state of Mississippi that in May of 2002 the American College of Obstetricians and Gynecologists denounced the state for driving their practitioners out. After the IUD lawsuits, the American Medical Association reported the number of U.S. pharmaceutical companies pursuing research in contraception went from 13 to 1. But it’s not just women’s health that suffers – the American Bar Association Journal found that an extra 20% is added to the cost of ladders due to regular litigation.
The book is a quick read yet filled with far more information and examples than I cite here, giving a clear explanation as to how current policies harm our economic growth. While the economy continues to struggle and as Americans prepare for another Presidential election, understanding the roadblocks to job creation and economic growth will be more important than ever. I believe some candidates (possibly even incumbents) will show they lack this understanding while other candidates will show they have what it takes to overcome economic hurdles and generate prosperity. This book is one I’d certainly recommend to anyone seeking office or anyone planning to vote.
Buckley gives it one trunk up.