Some suggestions for fixing the economy

With unemployment now over 10 percent and looking like it will get worse before it gets better, Obama’s answer is to call for a summit of small business executives and unions. One has to wonder what Obama’s definition of “small business” might be, but it is hopeful he would actually listen to the sector of our economy that has historically created the most jobs. However, with Obama’s propensity for big government solutions I am doubtful he will give real capitalists any serious consideration.

It is also doubtful that Obama’s summit will produce any really meaningful changes that will stimulate American jobs. And I am sure I will not be one of the “small business executives” he will call on for suggestions. So I am offering my suggestions here in hopes that maybe someone who has the President’s ear may get him to do something that is truly meaningful.

First, I would encourage him to not invite the unions to the table. Obama loves unions because they fit his socialist vision. The problem is that unions have never created a single job. Many would argue that they have preserved jobs that would have otherwise been lost to technology or evil, cost cutting capitalists. The fact is unions have resisted real progress in many industries ostensibly in the name of protecting worker’s jobs. It is also a fact that the industries that are in the deepest trouble in this country are the ones that are most heavily unionized. The real truth is that unions aren’t particularly interested in preserving or creating jobs. They are interested in amassing political power. Unions may once have served a noble purpose, but today they are driving American jobs across state lines or worse, overseas. Today unions represent only 7 percent of private sector employees but 99 percent of government employees. Unions destroy productivity, stifle innovation and increase costs. Is it any wonder that the costs of government programs are out of control or that our unionized private employers find it more difficult to compete in the global economy when unions control the workforce?

Second, it is time to recognize that the single biggest problem affecting our economy and our current way of life is our dependence on foreign oil. That is not to say we can do without oil. There is currently no real viable replacement option, but it is insane for us not to develop our own domestic resources. And despite what environmentalists want us to believe we have huge reserves of oil in this country. Forget the Arctic National Wildlife Reserve, the Bakken Formation in North Dakota alone is estimated to contain 200 to 400 billion barrels of recoverable oil. We can develop these resources and we can do it in an environmentally safe way. It has been estimated that developing our own reserves would add $18 Trillion (yes, with a T) to our domestic economy. That would create real wealth building American jobs and truly revitalize our economy. We need to make it a national priority to end our demonization of the oil industry and eliminate our imports of oil from the Middle East. It is ludicrous for us to send billions of dollars to Saudi Arabia to build palaces and fund terrorists while we sit on the very resources we need to improve our economy and our national security.

Finally, instead of putting government bailout money into saving companies that have clearly been mismanaged – like GM. Government needs to work with successful small businesses to help them get through this difficult time. Recently Obama announced the Small Business Administration would be making new loans available to help small businesses. That is promising but anyone who has actually applied for an SBA loan can tell you about the difficulties of actually getting the loan. The SBA does not really lend money to anyone. What they do is guarantee repayment of the loan to “participating” SBA lenders. In this tough economy many small businesses could be helped immensely with loans that would help them refinance existing debt at lower rates or with deferred payment options. From a strategic standpoint investing $700 billion in thousands of small businesses is more likely to produce winners than one big bet on a single company or industry that is already bankrupt.

The American people have always shown tremendous resiliency. I have no doubt that we can pull together to return this country to the economic powerhouse it has historically been. Encouraging ingenuity and supporting success will produce quicker results than supporting initiative killing legislation and industrial models that no longer work in a global economy.