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Renewing America

Ideas and initiatives for rebuilding American economic strength.

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Morning Brief: Washington Responsible for U.S. Worker Competitiveness

by Jonathan Masters
January 25, 2012

Former Clinton Administration official and public policy expert Robert Reich contends that government, as protector of the public good (CSM), has a responsibility to help the American worker compete in the global economy. The private sector, he says, has an obligation to stockholders and cannot be expected to put people ahead of profit.

According to the National Association for Business Economics (BW), a smaller share of U.S. firms plan to boost payrolls in early 2012—some 27 percent, the lowest in several quarters. However, sixty-five percent of businesses expect the U.S. economy to grow more than 2 percent this year, up from only 16 percent in October 2011.

Debt and Deficits

Payroll Tax Debate Kicks Off

Discussions over the payroll tax cut extension returned to Capitol Hill (WashPost), with both parties confident a deal can be struck despite a heated debate over the issue late last year. Facing a February 29 deadline under the current extension, lawmakers will focus mainly on how to pay for the extension through 2012.

Debt and deficits. America’s debt is rising at an unprecedented rate and the response will require tackling some of the thorniest issues in U.S. politics –taxes and entitlement spending. Leading experts assess the challenges in reducing U.S. debt.

Education and Human Capital

Twelve Education Policy Predictions

The nonpartisan Education Commission of the States provides its 2012 predictions of the twelve policies with the largest potential to drive changes in education in the states, including providing an easier transition from Pre-K to the early grades, K-12 finance, blended learning, and teacher quality.

Education and human capital. An education system beset by falling student performance and a flawed immigration system threaten U.S. capacity to develop a competitive workforce. Experts spell out ways of improving education and immigration policies.

Corporate Regulation and Taxation

Banks Facing Perfect Storm

Banks are facing a “perfect storm,” according to the Financial Times, hit by new regulatory reforms, such as Dodd-Frank and Basel III, and a weak outlook for the global economy. In an update to its World Economic Outlook, the IMF expects the eurozone to sink into a mild recession in 2012 that will have global reverberations. Projected U.S economic growth for 2013 was marked down 0.3% to 2.2%.

Corporate regulation and taxation. Regulatory burdens, offshore employment, and tax-shelter abuses have fed debate over the scope of rules for U.S.-based businesses. Top economists and business experts offer solutions for addressing corporate taxes.

International Trade and Investment

Record U.S. Trade Deficit Expected with China

International Trade expert Gilbert B. Kaplan says the United States is preparing to announce its 2011 trade deficit with China (HuffPost), expected be the largest bi-lateral trade deficit in history. He cites three major factors contributing to this shortfall, including foreign subsidies, a lack of U.S. manufacturing policy/strategy, and China’s currency manipulation.

International trade and investment. Some policymakers say trade deals offer unfair advantages to foreign firms but others see free trade as a way to spur economic growth and job creation. Leading analysts examine the debate over next steps in U.S. trade policy.

Innovation

Managing Creative Destruction

In the Financial Times, John Kay applies the concept of “creative destruction” to the information economy, noting that, “innovation mostly comes from entrepreneurs outside established businesses.” However, the success of capitalism, he warns, threatens to provide entrenched interests the ability to resist innovation.

Innovation. In the face of robust challenges from emerging markets such as India, Brazil, and China, the U.S. capacity to innovate could play a chief role in economic growth. Specialists on research and economic competitiveness examine how to spur innovation.

Post a Comment 1 Comment

  • Posted by Curtis Valentine

    Great post, as a Term Member at the CFR and advocate for quality public schools for all, I am excited about Renewing America and its efforts that highlight that Education and Human Capital are at the foundation of America’s ability to remain globally competitive. At my organization, MarylandCAN: Maryland Campaign for Achievement Now, we say that “Great Schools Change Everything.” We must frame quality education for all and closing the growing achievement gap as a national security issues, a housing issue, a healthcare issue, and a jobs issues.

    Thanks again, I look forward to more posts like this!

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