By Peter Galuszka
The immediate and critical question looming before the U.S. at the moment is how to create more jobs. It is Job One (pun intended).
Without jobs, tax revenues will continue to languish. GDP will drop. The need to cut more government services will become more pressing, although cutting is something that should be a secondary priority to creating jobs. If you have a car wreck patient in an emergency room, you give him blood first and stabilize him. Only then do you look at his longer-term problems.
President Barack Obama has been under the gun from the moment he was inaugurated from conservatives who are thumping the same old dogma that somehow Obama is anti-business. No matter what he does, he is wrong. Even when he tries business-friendly policies, such as proposing to end the payroll tax on Dec. 31, he is shot down.
The truth about being anti-business is somewhat dodgy, however. Large corporations complain that the climate is bad. So they continue to horde more than $1 trillion in cash that could be used to hire American workers. They whine about high taxes while some enormous conglomerates such as General Electric pay no federal income taxes.
Now comes a story in today’s Washington Post that shows that large U.S. companies, some of which are angling for tax breaks, do not reveal how many of their employees are based overseas and how many are in the U.S.
This goes to the heart of the hiring problem. Despite the stock markets’ volatility and the debt gloom in the U.S. and Europe, there’s plenty of business buzzing along in places such as Asia and Brazil. U.S.-based companies maybe hiring, but just not in the U.S. It’s a dirty little secret they don’t want the U.S. public to know. Companies such as Apple and Pfizer are “pushing lawmakers to cut their tax bills in the name of job-creation in the U.S.,” the Post says. But they won’t say how many of their employees are in the U.S. Other tight-lipped firms include Hewlett-Packard and AT&T. Consumer products giant Procter & Gamble at first said it doesn’t reveal location of employees. When the Post pointed out that P&G CEO Bob McDonald revealed how many were overseas in a newspaper opinion piece (35,000 out of 127,000 total), they relented. To its credit GE does provide such information.
It’s the same old story with big corporations. What they say has to be verified and pinned down. Take Wells Fargo which snarfed up Wachovia in the 2008 bank crisis. They are finally renaming and rebranding themselves in Virginia at old Wachovia banks. They took ads that look like phony front pages of such newspapers at the Richmond Times-Dispatch and the Roanoke Times (ethical questions there) to announce themselves as our new best friends. Yet, Wells Fargo is also jamming it to its customers in test markets (not Virginia, at least yet) by charging them a new monthly fee for using their debit cards.
Wachovia, of course, is another story of a large, regional corporation gone bad. The bank had been founded by dour Moravians in Piedmont North Carolina. It had a reputation for reliable service (I have been a customer since 1970). Then First Union, a wild and wooly Southern bank with a lousy reputation, bought Wachovia and its name. Soon Wachovia was getting fined for laundering money from Mexican drug traffickers and was tanking by buying a firm known for dicey subprime mortgages. Goodbye, Wachovia.
What the jobs data suggests is how the U.S. has not kept with the pace of the globalizing economy. As once-U.S. firms broaden their overseas markets, they become less “American.” There’s nothing wrong with that, as long as the U.S. voters and government understand and respond in kind. As such corporations want things in a one-sided way to take advantage of overseas jobs and profits, the rest of us should be grown-up enough to respond in kind.
That means stopping this Easter Bunny belief that they are out for the good ole’ U.S.A. If they are hiring foreign workers over American ones, tax and regulate accordingly. If they are not contributing to the economic recovery by hiring here, keep that in mind.
We’ve been hearing plenty of fairy stories about the benefits of globalization for 20 or 30 years now. They date back to the go-go years of Ronald Reagan and Margaret Thatcher and the end of the Evil Empire. Results include the Euro and a quasi-united Europe. Look at those messes today. And don’t let the big companies get away with tax breaks while they deny Americans jobs.