When the Beatles sang, "Can't Buy Me Love," who would have thought the chorus might some day apply to U.S. stimulus spending? Indeed, the $862 billion hasn't bought much in the way of love for new employees. And as it stands, longer-term economic growth hinges on love for human resources.
Consider an example that involves actual dollars. As part of the U.S. government's record stimulus package, it gave $1 billion to build a clean coal repowering program and carbon dioxide storage network in Illinois. The Department of Energy has projected that the spending created 1,900 jobs. In other words, private taxpayers funded a government project that yielded 1,900 jobs at a cost of more than $500,000 per new hire -- although this of course looks only at those hired for this job, not at the spending employees will do in the area or money spent on materials for the plant that will save jobs elsewhere. The department also notes the benefits of the plant's work, apart from how many are hired.
Even before taking office, President Barack Obama told NBC's "Meet the Press" that the stimulus plan was about more than jobs: "The key is making sure we jump-start the economy in a way that doesn't just deal with the short term, doesn't just create jobs immediately, but also puts us on a glide path for long-term sustainable economic growth," he said.
|A test plant in Fukushima Prefecture, Japan, is similar to a $1 billion project planned for Illinois.
Still, only 20% of investors believe stocks will go higher over the next six months, which could mean investors prefer to see corporations hiring, and that may not be as difficult as some suggest. Gather leaders of respective economic sectors in the Oval Office. Ask them what they need to spend their money on hiring, as opposed to acquisitions or share buybacks. To the extent they can meet certain yardsticks ... give them what they ask for. (Lather, Rinse, Repeat!)
Yes, if that means cutting the corporate tax rate, cut the corporate tax rate. If that means limiting legislation that hinders business cash flow, limit legislation. Again, as long as hiring yardsticks that business and the White House agree upon are met, everyone would win.