As I listened to a couple of the talking heads on CNBC yesterday a couple of points they made stuck in my mind but with questions of my own that I am sure they did not think of. The topic they discussed was the need for companies to invest more in research and development. A couple of barely stated premises lay beneath the discussion: 1) that we, as a nation, no longer lead in the development of new products and processes which is hurting us economically and 2) that such development will lead to new jobs. I can agree with the first but disagree with the notion that simply increasing R&D budgets will revitalize the economy or translate to new jobs. There is no sure fire linear path from the increased spending to the desired economic or employment outcomes. Here is the scenario as I see it playing out. Company A increases its R&D budget, hires a few new technicians and researchers, and upgrades its facilities. That may result in a new product or process but, because Company A has all of its production facilities overseas, the real benefit in terms of economic boost and jobs goes elsewhere. It doesn't stay here. This whole argument reminds me of the notion that giving the banks the TARP funds would allow them to lend again. "Allow" does not mean "Will."
The result: take a look at Elizabeth Warren's article on HuffingtonPost this morning.
Matthew Jaffe and Karen Travers ask a good question in their ABC article this morning. Unfortunately they don't really answer it. The Obama Administration and the news media have been touting the 'Jobs Summit' all week. But I don't really expect anything new to come of it. I expect a mishmash of old ideas. Already business allied attendees are suggesting tax cuts or credits for businesses who hire workers. That is a temporary fix at best. Businesses may hire if the cuts or credits help their bottom line and for only so long as it takes to qualify. What we will get is a new kind of 'seasonal' work: tax season. A Republican idiot floated the notion of rolling back the Federal minimum wage. May he boil in Christmas pudding. What I don't see them offering is to roll back the salaries he and his compatriots in the Legislative Branch get. Like the wonderful adventures in Iraq and Afghanistan, it is no skin off their noses and no sacrifices will be demanded of them.
See you all tomorrow. Hopefully with pictures over the weekend of new quilt.