by Bill Clinton
30. Export more services. We can export high-quality services not usually traded now, like education, health-care, and consulting services. For example, we can use the Internet for things like telemedicine, or send teams of people to other countries to develop services there, as U.S. universities have done recently in establishing universities in Qatar and the United Arab Emirates, or as Laureate International Universities has done, establishing a worldwide network of fifty-five universities in twenty-eight countries. We might be able to sell insurance policies in countries with a rapidly growing middle class, where life, property, and casualty policies are virtually nonexistent. People who know a lot more about this than I do should be charged with submitting a plan to maximize our exports in services.
31. Get to emerging opportunities before others do. The government can do more to help entrepreneurs and small-business people understand both what we can sell today and what we’ll be able to sell soon.
Here’s a great example. All over America, paper mills have closed, as we use less paper to communicate and other countries open their own mills. When a shuttered paper mill in southeast Virginia was put up for bid, Terry McAuliffe leased the forest and will install modern machinery that compresses wood waste into pellets with the same energy potential as lumps of coal. Two hundred fifty people will be hired to produce, pack, and ship the product. He’ll be able to sell all he can produce to utilities in Europe that are required to reduce their carbon emissions and can’t afford to close their coal plants. Instead, they’ll burn 80 percent coal, 20 percent wood pellets. The market this year is eleven million tons, but in the next five years it will be ten times as large. And the utilities want a twenty-year supply. McAuliffe’s plant is competitive because there is a lot of available wood waste, plus the availability of sustainably harvested timber; the plant is close to a port near the Atlantic Ocean, which keeps transportation costs down; and the production tax credit helps to finance the up-front costs of the machinery that makes the pellets.
There are closed paper plants all over the country that could produce pellets for export, especially those close to the Atlantic or inland river ports. This is also something that should have great marketability in China, where, in spite of poor air quality in much of the country and aggressive expansion of solar and wind generation, they’re still building more coal-fired plants.
It’s also an option for coal-fired plants in the United States. I think the coal companies should consider getting into this business themselves. The coal companies in the eastern part of the country operate in states that also have closed paper mills. They could offer both products to utilities and put people to work who’ve lost jobs in mills or mines. The EPA could help by offering utilities the opportunity to reduce CO2 emissions to the required level by either closing plants, blending pellets with coal in more of them, or a combination of the two.
32. Sell, sell, sell. The president’s National Export Initiative is, as I said, well conceived and comprehensive. But we still have to make the deals. Hillary is working hard to promote “commercial diplomacy” personally and to get our ambassadors and embassy staffs involved in increasing exports. It’s vital to involve the Commerce Department and every other department and federal agency that can make a contribution to this effort, as well as governors, mayors, national business organizations, and American chambers of commerce in other countries. China’s Export-Import Bank has a loan portfolio $20 billion larger than ours. That’s more than 100,000 jobs’ worth of difference. If we’re going to shift our emphasis from more consumption to more production, we’ve got to be able to sell.
BEYOND THE IDEAS THAT FIT WITHIN the parameters of the president’s job-generating priorities—building a twenty-first-century infrastructure, leading the world in green technologies, restoring our manufacturing base, and doubling exports—there are a few others I think we should consider.
33. Increase the role of the Small Business Administration (SBA). Our country’s nearly thirty million small businesses have created most of America’s new jobs over the last fifteen years, generated more than half our nonfarm GDP, and paid the salaries of more than half our private-sector workers. If they were a single corporation, they would be “too big to fail.” As it is, they’re often too small for banks to lend to. In June 2011, Pepperdine University reported that more than half the small businesses surveyed said that their attempts to get more capital had been unsuccessful and that banks had denied 60 percent of small-business loan applications this year.
According to Gallup’s chief economist, Dennis Jacobe, 40 percent of small businesses are hiring fewer people than they need. That’s when the SBA is supposed to step in, offering loan guarantees of 50 to 85 percent for bank loans to small businesses, with 100 percent guarantees for disaster loans. Even when the SBA does offer guarantees, small businesses often find loans hard to come by. Despite benefiting from government bailouts and sitting on huge amounts of money, most banks have proved remarkably reluctant to make even guaranteed loans to small businesses.
A little history: The antigovernment Republicans have been hostile to the SBA since President Reagan tried to eliminate it and, failing that, to make sure it couldn’t do its job. Their ideology holds that any small business worth its salt can get a bank loan without any help from the government.
As the Pepperdine and Gallup findings show, the evidence doesn’t support the ideology. SBA–backed investments have helped new businesses to grow into economic giants, including FedEx, Apple, Intel, Callaway Golf, Staples, Ben & Jerry’s, Outback Steakhouse, Costco, Pandora, and Sun Microsystems.
President George H. W. Bush was a big supporter of small business and the SBA. He expanded its operations, including giving it the capacity to guarantee microloans to very small enterprises.
When I took office, I elevated the SBA to the cabinet and appointed two able administrators in Erskine Bowles and Aída Álvarez. During our eight years a simplified, expedited process doubled the overall number of SBA loans while more than tripling those to women and minorities.
President George W. Bush returned to the Reagan policy, cutting the budget by nearly 50 percent, cutting the staff by more than 25 percent, and freezing the microloan program.
President Obama is committed to reviving the SBA. He moved the budget back toward its all-time high in 2000 and added almost $1 billion more as part of his recovery initiatives, partly to fund two new programs: America’s Recovery Capital (ARC) to provide up to $35,000 to help very small businesses get out of debt, and the Small Business Lending Fund (SBLF) to put money into struggling community banks so that they could lend to community businesses likely to be turned down by big banks. Neither program has been fully implemented, in part because of the erosion of the SBA’s capacity to organize and administer such efforts over the last decade, in part because a lot of banks aren’t interested in participating.
Getting loans to well-run businesses that want to increase hiring would make a significant contribution to our economy. I hope the president will put the SBA back in the cabinet, to make sure small businesses’ concerns are fully aired in his ongoing effort to create jobs and to streamline government regulation (he’s already proposed savings of $10 billion). To do its job well, the SBA must rebuild and modernize to make good decisions faster, starting with getting the ARC and the SBLF going full bore. If banks continue to resist making SBA–guaranteed loans, the SBA also should explore other ways to meet the demand. For example, it could broaden the definition of disaster loans to include the current economic emergency, so that loans of $100,000 or less could be made directly. Or it could increase the investment activity of the Small Business Investment Company, a public-private partnership administered by the SBA that puts long-term capital into private firms that invest in promising small and midsized businesses.
A lot of great companies started with SBA loans. It’s time to get the loans going again.
34. Promote “crowdfunding” to help small businesses raise needed ca
pital. “Crowdfunding” is the term used for receiving small sums of money over the Internet. It allows start-ups or small businesses that are seeking to expand to raise money directly from individuals without going through a financial middleman. This has a real potential to fill the financing gap many small entrepreneurs face if they can’t get conventional venture capital or a bank loan. Under current U.S. securities laws, which date back to the 1930s, money can only be raised from wealthy, knowledgeable investors, unless the businesspeople seeking capital go through a regulatory process that would cost more than the sum of money they’re trying to raise.
President Obama has proposed an exemption from the securities laws for investments up to one million dollars. Representative Patrick McHenry, Republican of North Carolina, has a proposal to allow companies to raise up to five million dollars, with individual investments limited to ten thousand dollars or 10 percent of the investors’ income, whichever is smaller. In 2010, the Sustainable Economies Law Center petitioned the SEC to allow investors to raise up to one hundred thousand dollars in contributions of no more than one hundred dollars per person. Even that would make a real difference. This is a reform that should get bipartisan support. In the U.K., just one business loan site is already raising more than two million dollars a month in crowdfunding.
35. Fill the three million jobs that are already open faster. Even though unemployment is high, posted job openings are being filled only half as fast as in previous postrecession economies. Part of the reason is that employers want particular skills applicants don’t have. To speed up hiring, Michael Thurmond, former labor commissioner of Georgia, offered employers the money to train workers on-site. Employers don’t pay payroll taxes or benefits during the training period, and they get the chance to fully evaluate people before they’re hired. The Georgia Work$ system helps everyone. People get hired more quickly and spend less time on unemployment benefits. The federal government should ensure that every state offers this option. We can fill open jobs faster. President Obama embraced this idea in his American Jobs Act, and it should have bipartisan appeal.
36. Provide an extra incentive to hire people who’ve been out of work more than six months. More and more news reports indicate that employers, who can be very choosy in hiring in this environment, are reluctant to hire, sometimes even to interview, people who’ve been out of work more than six months. I think that’s understandable but still a mistake. Many of the longer-term unemployed are hardworking, reliable people who spent months trying to find jobs they know how to do or jobs paying close to what they used to make. To encourage employers to give them a chance, we should give them, in addition to whatever is available for all new hires, a longer payroll-tax holiday, one month for every month beyond six months a new hire was unemployed. President Obama’s plan has a different and probably better idea: $8 billion to fund a tax credit to businesses that hire the long-term unemployed.
37. Give employers an incentive not to lay off workers in the first place. One reason the German unemployment rate is 2 percent lower than ours is that in tough times, employers and employees can agree to reduce everyone’s hours and pay in a system called Kurzarbeit, “short work.” The government encourages this instead of layoffs by paying the employee 60 percent of his or her lost wages. It’s cheaper than full unemployment payments, keeps skilled workforces intact, and helps the economy recover. We should adopt a version of it. Earlier in this book, I told the story of Nucor steel and the benefits of its no-layoff policy. The president’s plan provides $49 billion in expanded unemployment benefits, with the provision that some of it can be used to test the idea in areas where it’s most likely to work. I’m convinced this kind of system would increase our long-term productivity and keep unemployment lower. We should have instituted it years ago.
38. “Insource” jobs we’ve been outsourcing. At the Clinton Global Initiative America meeting on the U.S. economy, in June 2011, one of the most impressive commitments to create jobs was made by Onshore Technology Services. Onshore was founded in 2006 to retrain underemployed and dislocated workers in information technology. The company offers business customers the chance to reduce their IT costs 25 to 35 percent without sending the work offshore. Onshore has committed to develop an operations center with a thousand employees in Joplin, Missouri, to help it recover from the tornado damage, and to create twelve thousand jobs throughout rural America. We need more of these efforts and should encourage them with support from the Department of Commerce, which could identify potential corporate customers for insourcing, and from the SBA, which could help with initial capital.
39. To support the insourcing movement, we should increase the number of empowerment zones and expand the reach of the New Markets Initiative. These two initiatives, which began during my administration, give businesses extra incentives to invest in areas of very high unemployment or low per capita incomes. Expanding them would have to include incentives over and above the broad-based ones of the American Jobs Act. For example, we could provide free training and the cash equivalent of a ten-year property-tax holiday for investments that create more than a certain number of jobs or reopen a closed factory.4 Those are investments that wouldn’t be made otherwise, and the new employers and their employees would pay income taxes. More important, they’ll have jobs.
40. Increase the preparation and recruitment of, and incentives for, more young Americans to get degrees and take jobs in STEM (science, technology, engineering, and mathematics) fields. For example, we should forgive student loans in return for a certain number of years’ work in these areas. Decades ago, we did the same thing to lure young doctors to medically underserved parts of the country, and it worked.
41. Keep pushing for comprehensive immigration reform, and in the meantime grant more H-1B visas to immigrants in STEM fields until we have enough qualified citizens to fill the openings. President Obama has improved border enforcement and increased deportation of illegal immigrants. It’s time to give those who are working, raising kids, and paying taxes a path to citizenship. If Congress can’t agree to that, at least immigrants who have jobs and pay taxes should be able to get work permits while we work on the larger problems, a proposal President Reagan supported in the 1980s. We should also encourage gifted young immigrants who’ve grown up here to get a college education and become productive citizens. Pulling students out of college and sending them home, or making it too expensive to go by denying them in-state tuition at colleges in that state where they grew up and their parents pay taxes is not going to help our economy. Remember, it’s an advantage for the United States to have a workforce younger than those of Japan and Europe.
Meanwhile, the immigrants who fill the STEM jobs will help to increase employment for citizens, increase exports, and bring back manufacturing, so we should issue as many H-1B visas as necessary to fill the STEM jobs that can’t be filled by Americans.
42. Bring more tourists to the United States. Spending on global travel is already at $1 trillion and is projected to double by 2020, with almost three hundred million people a year traveling outside their own countries. An increased effort in this area should have strong support. According to a study by the U.S. Travel Association, overseas visitors spend an average of $4,000 on U.S. services and products, and one new job is created for every thirty-five new visitors. Unlike most countries that derive a lot of income from tourism, the United States didn’t have a national effort to market itself abroad until early 2010, when Congress passed, with a large bipartisan majority, and the president signed the Travel Promotion Act. The act created the Corporation for Travel Promotion (CTP), a public-private partnership overseen by a board of directors appointed by the secretary of commerce and funded, not by U.S. taxpayers, but from $10 of the fees paid by visitors from visa waiver countries and private-sector contributions on a fifty-fifty basis.
Because of the widespread belief that it is more difficult to come to the United States after 9/11 and other negative stereotypes, we need to accur
ately brand the United States as a desirable travel destination and reach out to the millions of people who still feel a strong kinship to our country. The CTP’s first marketing efforts will begin later this year at an international travel event in London.
It’s important that the entire government, from the White House on down, support this effort. The State Department is already putting staff resources into it as part of its commercial-diplomacy push. And it’s critical that the travel industry in every state participate aggressively in trade shows, social media outreach, and through the website, through other marketing efforts, and with the production of unique multistate travel packages.
International travel already supports nearly two million jobs in America, according to CTP. If we do this well, the initiative could create hundreds of thousands more.
43. Promote affordable opportunities to “buy American.” Roger Simmermaker, an electronics technician from Orlando, Florida, is the author of How Americans Can Buy American. It contains more than sixteen thousand products and services made in the United States and includes a special list of a thousand union-made products. Simmermaker also offers Americans a free e-guide to more than twenty-five hundred products available in popular retail outlets like Dillard’s, Home Depot, and Costco.
Diane Sawyer, the anchor of ABC’s World News, has asked Americans to join her in pledging to buy more goods made in America, saying that if all Americans on just one occasion spent just $3.33 more on goods made here, it would create ten thousand jobs. I’m not trying to put the importers and all the people who work for them out of business. I have shoes and clothes that are both made in America and imported. But today only 25 percent of our money spent on shoes and clothes goes for U.S.–made products. If we just raised it to 30 or 35 percent, we could create a lot of jobs in manufacturing and throughout the supply chain. To help us make an American choice, on these and other issues, a Florida company, Made in USA Certified, verifies companies’ claims that their materials and manufacturing are domestic.