SUNBURY — Today brings the Obama administration’s latest attempt at economic recovery with the White House Forum on Jobs and Economic Growth, aimed at reducing the nation’s now double-digit unemployment rate.
Economists and business executives from across the Valley were split on the effectiveness of such a forum and on what the nation’s economy really needs to get back on track.
“I think the only applicable term is farcical,” said David N. Taylor, executive director of the Pennsylvania Manufacturers Association. “It’s a dog-and-pony show.”
Unemployment figures released Wednesday by the state Department of Labor and Industry show job loss rose in Northumberland and Snyder counties, increasing from 10.4 percent in September to 10.6 percent in October in Northumberland County and from 9.5 percent to 10.8 percent in Snyder County during the same period.
Both counties now stand above the national unemployment rate of 10.2 percent and well above the state rate of 8.8 percent.
Unemployment in Union County held steady at 9.4 percent, while Montour County saw a slight decrease.
The White House jobs forum, to which the Obama administration has invited leading CEOs, small-business owners, labor leaders and nonprofit chiefs, is focused on six topics, among them green jobs and the benefits of investment in renewable technologies; paving the road for small-business job growth in local communities; and creating jobs through the rebuilding of the United States’ infrastructure.
All are issues, Bucknell University economist Gregory A. Krohn said, that are fundamental to the rebuilding of the American economy.
“The best remedies are aimed toward trying to stimulate demand,” Krohn said. “To me, the main economic problem facing the country is there’s too little demand for goods and services. To increase employment and productivity, we need to increase demand.”
He said he hopes the summit will lead to additional aid to state and local governments that would prevent the need for tax hikes that would hurt already financially strapped consumers, giving them a little extra money in their pockets that they may otherwise not have had.
Krohn also supports additional federal funding for infrastructure projects that would get Americans back to work. Finally, he would like to see increased accessibility to loans in order for small businesses to take advantage of future increased demand.
Longtime Danville businessman Thomas Beiter Sr., owner of Beiter’s Department Store, identified with the needs of small-business owners.
“We’ve been here 35 years, and I can remember the earlier years, when you needed it the most was when you could get it the least,” Beiter said of small-business loans. “It was always the story, ‘Don’t come to me for $25,000, but we’ll give you $250,000.’ The big bucks were always available.”
Krohn’s points are on track with those offered up by the U.S. Chamber of Commerce and liberal think tank the Economic Policy Institute, both of which wrote open letters to Obama requesting the same measures.
Though Taylor, of the Pennsylvania Manufacturers Association, supports some of the measures in theory, he would just as soon the government keeps its nose out of business altogether.
“The government does not create wealth. The government does not create jobs,” Taylor said. “The government’s role is to allow the energy and the initiative of the American people to emerge in the marketplace. That’s where wealth is created. That’s where jobs come from.”
He said the execution of Obama’s $787 billion economic stimulus bill and attempts at regulatory reform through cap-and-trade and card-check legislation will further burden the country’s manufacturing sector, already crippled by a trade deficit with China.
“Obama went to China and made absolutely no progress on the chronic trade deficit and the imbalance we have with China,” Taylor said. “We are not going to see robust growth until our trade situation has improved.”
But the United States has a deficit of its own to worry about — the ongoing federal budget deficit and the national debt, which now stands at about $12 trillion.
But deficit spending, Bucknell’s Krohn said, may be exactly what the country needs.
His is an argument taken from economics textbooks: A period of economic decline is no time to focus on reducing budget deficits.
“I think temporary increases in the federal budget deficit are called for now to stimulate the demand for goods and services, and I stress temporary,” Krohn said. “These can’t be long-term increases in spending or permanent tax cuts or other measures because we do have a long-term federal budget problem that is very serious.”
While local manufacturers and retail businesses struggle, Beiter said his business has never been better.
“Last year was the best year I’ve ever had in 33 years I’ve been here, and this year is a close second,” he said. “I believe bad times have people staying closer to home and sticking more to the basics, which is what we sell. I think we’re working hard, we’re spending more money, we’re doing more advertising and thank God it’s working.”
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Robert Inglis / The Daily Item
Discussion
Job summit splits economists and business executives
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