Posted 12/30/2011

JOBS, JOBS AND MORE JOBS FOR 2012!

There is a way to create millions of new jobs.

But it is not the way of the Democrats, who want government to do the creating.  (Remember the Soviet Union's revealing joke: "If you pretend to pay me, I will pretend to work for you.")

Nor is it the way of the Republicans, who think private industry can do it "if the government would just get out of the way."  (Remember the 1890-1910 period when government did get out of the way, resulting in the growth of monopolies, widespread unemployment, and business cruelty which caused the creation of unions.)

The old "American way" to low unemployment is completely out-of-date. 

What's up-to-date in job creation is the "Singapore way."  Or the "South Korean way."  Or the "Taiwan way."

The only way to create jobs is an effective partnership between government and business.

The fast growing Asian countries have shown us that government's top priority should be to create jobs.  Not "a top priority," as U.S. politicians like to say – but one, single, top priority.

That's the top priority of the fast growing Asian nations.  Their government/ business partnerships are built to achieve that one single objective – jobs.

Government decides which business sectors should be chosen for government support.  (China has chosen the auto sector for development, but ignores the restaurant sector, which makes it tough on General Motors, but easy for McDonald's.)

Government develops a five-year plan encompassing all the businesses it intends to attract, support and protect.  (In 1985, Singapore decided it wanted to be an important factor in the oil business.  Within a year, the small island nation had induced a prized American exploration company to pull up stakes in Westport, Connecticut and move to Singapore.  Today, the world's largest oil refinery is being constructed on the island.)

Government then legislates programs to support the job-producing businesses it is interested in.  It must be prepared to offer inducements to foreign businesses to move to the USA.  Government must be prepared to drop support for non-strategic industries – those not capable of or inclined to produce jobs.

Private industry must operate aggressively to meet the objectives of the government's plan.  Non-strategic businesses will be left to fend for themselves.  Great amounts of money will be saved by the plan's eliminating the need for costly, wasteful lobbying.  (Free congressional junkets won't get you any tax breaks under this system.)

CEOs who fail to meet job production goals will no longer be protected by weak-kneed boards of directors, since both the government and labor will have board representation.

There would be changes which could become uncomfortable to corporate America:

• Exxon, which produces more money than jobs, would lose its tax breaks.
• Caterpillar, which produces jobs, would be considered a strategic industry.
• Agricultural subsidies would dry up, since agriculture is capital-intensive and produces few jobs.
• We would protect the intellectual property rights of our tech sector and vigorously punish foreign offenders.

If all this seems harsh to you, consider the job-losing current alternative.

Two examples:

1. Five years ago an American high-tech company developed and patented a device which sped up communication.  Before production was a year old, a South Korean company had stolen the patent and proceeded to build a factory to manufacture the device.  The American company appealed to the Commerce Department, the State Department and Congress.  It got nowhere. The South Korean government stated that it needed the patent "to increase employment."  They were in effect stealing American manufacturing jobs which should have been produced by exports.
   
   The American company was left with little choice but to let the South Korean government get away with supporting grand theft.  But a startling call from Singapore came in to the American CEO's office.  The caller was offering major inducements for the American company to move to Singapore.  The American CEO discussed the South Korean theft.  He was startled by the reply: "Don't worry about South Korea.  We know how to handle them."  The world's mightiest nation could not protect the small tech company, but a tiny nation of seven million people could.
   
2. It appears that the South Korean-business partnership known as Samsung has stolen Apple iPhone patents and produced its own allegedly illegal imitation.  When Samsung tried to export its allegedly illegal product into Europe, it was blocked because the European authorities believed the Samsung product to be an illegal theft of Apple's intellectual property rights.  When Samsung exported the product to the United States, there was no one protecting the American company.

Consider how job-debilitating it is that Europe would protect Apple's job-creating patents but America would not.

It's high time to abandon both the Democrats' and Republicans' approach to job creation and it's long overdue for the U.S. to learn how to create jobs from places like Singapore, South Korea and Taiwan.

By the way, Singapore is a high wage rate country.  South Korea and Taiwan are not far behind.  Their wage rates are going up while ours are going down.

There is a global economic lesson to be learned in Asia:

A nation with a government-business partnership will create far more jobs than one which operates on an either business or government basis.

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