This week I travel to Chicago to cover CGI America, a special session of the Clinton Global Initiative (CGI). CGI America will bring together “business, government, and civic leaders to focus on economic recovery and job growth.” I have covered several Clinton Global Initiative meetings over the last few years, watching how it evolve. It will be interesting to see if this special session is able to offer serious solutions that can make a difference.
The CGI Process
You have to understand the CGI process before you decide what to expect from this conference. CGI is about outlining big problems and asking the participants to step up and offer projects that address the problems but also to commit themselves to making the project happen. It is not about coming up with theoretical or overarching approaches, it is about coming up with practical things that the people who participate can do. This does not necessarily mean the solutions are small-scale, many projects can be scaled up to national and international levels.
And some of the commitments themselves are anything but small-scale. I was at one CGI where Richard Branson stepped up and announced that his transportation companies would dedicate all future proceeds to bio-fuel initiatives aimed at reducing the use of fossil fuels and fighting global warming. See my post on this, CGI – Richard Branson and Virgin Transportation Group To Dedicate ALL Future Proceeds Toward Global Warming.
I have had my frustrations with CGI, but still respect what Clinton is trying to accomplish. It’s about do and do instead of talk and talk. When I first attended CGI it was after years of Bush’s do-nothing and destroy government approach, and it was such a relief to me to see people gathering and trying to confront global warming, international conflict, and in general taking a proactive approach to try to solve the world’s problems instead of making them worse. But as the financial crisis unfolded it was difficult to be at CGI with people who were holding so tightly to the old economic paradigm that got us into the mess in the first place.
Bill Clinton wrote a set-up piece for Newsweek, titled, It’s Still the Economy, Stupid in which he laid out several things that can be done now to help bring jobs to America. While his piece has been criticized, most of his 14 ideas are solid, if modest, beginnings. First, to the criticisms.
In Bill Clinton’s Legacy of Denial, Rober Scheer begins,
Does Bill Clinton still not grasp that the current economic crisis is in large measure his legacy? Obviously that’s the case, or he wouldn’t have had the temerity to write a 14-point memo for Newsweek on how to fix the economy that never once refers to the home mortgage collapse and other manifestations of Wall Street greed that he enabled as president.
Dean Baker also takes Clinton to the woodshed in President Clinton, The Economy Started Losing Manufacturing Jobs While You Were in Office.
Clinton’s 14 Ideas
In Clinton’s Newsweek piece, It’s Still the Economy, Stupid, he outlines 14 proposals. They are things that people can do right now, which fits with the CGI process. He might or might not have larger structural solutions that he would propose, but in the context of CGI, most of these make some sense. (But tax cuts for corporations?)
1. SPEED THE APPROVALS – keep the full review process when there are real environmental concerns, but when there aren’t, the federal government should be able to give a waiver to the states to speed up start times on construction projects.
2. CASH FOR STARTUPS – provide cash incentives to get startups going, especially green-energy startups.
3. JOBS GALORE IN ENERGY – Meeting the Kyoto standards incentivises green jobs.
4. COPY THE EMPIRE STATE BUILDING – they did a green retrofit project on the Empire State Building that pays for itself in 5 years from the energy-bill savings. “We could put a million people to work retrofitting buildings all over America.”
5. GET THE UTILITIES IN ON THE ACTION – making homes energy-efficient will create millions of jobs and save 20% on energy costs. The utilities should be required to finance this.
6. STATE-BY-STATE SOLUTIONS – Nevada was an example of providing jobs by giving tax credits to companies to come there and make LED lightbulbs and turbines for the big wind farms down in Texas.
So in #2 Clinton says tax cuts don’t help create jobs, then #12 says we need a corporate tax-rate cut. Maybe this is one more example of expecting people to have short memories?
7. GUARANTEE LOANS – The federal government should set aside $15 billion of the TARP money to create a loan-guarantee program because banks are still not lending.
8. PAINT ’EM WHITE – painting rooftops white in cities lowers energy costs and provides jobs. “Every black roof in New York should be white; every roof in Chicago should be white; every roof in Little Rock should be white. “
9. DEALS TO MAKE THINGS – The stimulus “was an $800 billion stimulus trying to fix a $3 trillion hole.” So see if we can get corporations to stop hoarding and invest because Republicans in Congress are blocking government investment.
10. TRAIN ON THE JOB – “After job vacancies go unfilled for a certain period of time, the state offers businesses the money to train potential employees themselves. During the training period, the companies don’t become employers, so they don’t have to start paying Social Security taxes or employer benefits.”
11. TEACH SKILLS WE NEED – he proposes this as a discussion topic for CGI, not offering solutions.
12. CUT CORPORATE TAXES — hey, it’s still Bill Clinton, “New Democrat.” He words it so it sort-of makes sense, “It’s true that our corporate rates are the second-highest in the world. But it’s also true that what our corporations actually pay is nowhere near the second-highest percentage of their real income in the world. So I’d be perfectly fine with lowering the corporate tax rates, simplifying the tax code, and saving some money on accountants, but broadening the tax base so that all of them pay a reasonable amount of tax on their profits. “
13. ENFORCE TRADE LAWS – “My administration negotiated 300 trade agreements, but we enforced them, too. Enforcement dropped so much in the last decade because we borrowed more and more money from the countries that had big trade surpluses with us, especially China and Japan, to pay for government spending. Since they are now our bankers, it’s hard to be tough on their unfair trading practices. “
14. ANALYZE THE OPPORTUNITIES – He hopes that solutions form CGI-America can influence D.C. in a bipartisan way. This assumes that Republicans are operating with good will to address problems. “I’m hosting this month’s CGI America meeting on the assumption that there will be no federal stimulus and no further tax incentives targeted directly toward creating new jobs. Going on these assumptions, we want to analyze America’s economy: What are our assets? What are our liabilities? What are our options? There must be opportunities to be tapped, given all the cash in banks and corporate treasuries. If we have some success, we might be able to influence the debate in Washington in a nonpartisan way because we’ll have economic evidence to show them.”
Patches Not Structural Changes
This list is a series of suggestions that patch over the underlying structural problems with the economy, without really going after the structural problems themselves. But keep in mind that this is in line with the purpose of CGI. In #9 Clinton begins to get there, laying out a key problem in our economy,
The real thing that has killed us in the last 10 years is that too much of our dealmaking creativity has been devoted to expanding the financial sector in ways that don’t create new businesses and more jobs and to persuading people to take on excessive debt loads to make up for the fact that their incomes are stagnant. That’s one reason why we’ve been suffering from anemic employment for years. In the seven years and eight months that preceded the meltdown, our economy produced a meager 4 million new jobs, far too few to cope with millions coming into the workforce, and virtually all those jobs were created in housing, finance, and consumer spending.
I’ll be very interested to see how CGI-America addresses this problem, if at all.