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The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
NEW YORK (
TheStreet) -- President Obama is initiating an "Insourcing American Jobs" dialogue with top business leaders. The latter are always looking for tax breaks and special benefits, and this could quickly degenerate into pleas for special treatment, whereas creating the best overall environment for all private investment would best foster growth and jobs.
Huge losses in Washington's equity stake in
GM(GM) illustrate government-financed jobs are too expensive. Fiascos like
Solyndra and other ill-fated energy projects prove yet again businesses, not bureaucrats, have the fine grain information and financial acumen to make the right bets -- investments that create new products, advance established industries and multiply jobs, not merely pay politicians' debts to campaign supporters.
President Barack Obama
Globalization makes abundant U.S. technology, energy and capital, if correctly deployed, much more valuable. China and Germany -- so often cited for their effective manufacturing and technology strategies -- ensure their businesses compete in an advantaged environment. The policy-making challenge to Washington is defined by the necessity of leveling the playing field for U.S. businesses.
Washington must ensure U.S.-based innovation and production has the same market access in Asia and the eurozone foreign businesses now enjoy in U.S. markets, and American firms are not disadvantaged by undervalued yuan or euro. As things currently stand, the math for locating manufacturing -- be it textiles or turbines, auto parts or automation equipment -- tilts heavily in favor of Chinese and German locations.
Both the Bush and Obama administrations have relied too much on endless and unproductive diplomacy and commissions, and have failed to take the concrete actions advocated by the likely GOP nominee, Mitt Romney, this author and other economists. The president's "Insourcing American Jobs" forum and his new Trade Enforcement Task Force are just more talk and study without the muscle of the U.S. government action to rebalance a tilted playing field.
Federal support for R&D is generous and essential, but too often, government-assisted research results in patents worked abroad -- consider how little
Microsoft technology results in U.S.-based manufacturing. Federal policy should require that patents accomplished with federal support be worked in the U.S. to be honored by the courts. Otherwise competing firms should be permitted to manufacture those products here.