Watch Out Haters! Cory Booker is now being Lauded by BLACKS, Whites, Democrats & Republicans for Speaking Up On last Sunday's "Meet The Press". I believe GOD will Vindicate Booker in the Long Run. He will NOT go Down!
Booker has spent the last three days kind-of, sort-of walking those comments back, insisting that he never meant to conflate Bain and Wright while holding firm on his condemnation of the negative campaigning in both parties. (Booker called the tone of the campaign “nauseating”.)
Conventional wisdom dictates that Booker’s gaffe hurts him politically. Conventional wisdom could well be wrong.
“While he may take grief in the short run, it will only serve to benefit him in the long run,” argued one senior Democratic party operative granted anonymity to speak candidly about such a politically sensitive topic.
Here’s how Booker’s comments could work to his long-term benefit.
Remember that prior to this episode, Booker was really only known by political/media types who cover this sort of stuff for a living and by those in the Twittersphere where the mayor has long been a major presence. (His rescue of a woman from a burning building made national news but was a blip on the overall radar.)
In the last 72 hours, Booker has been everywhere. You literally can’t turn on the television without hearing about — or from — him.
It’s hard to imagine how Booker could get that sort of publicity even if he was trying to — and, to be clear, we don’t think he was trying to. (He offered this introspective tweet on Tuesday: “In your most difficult times, hope is generated on the inside. This is the essence of inner strength.”)
And what has Booker been talking about during his time in the national spotlight? Mostly about how negative campaigning is a terrible thing that makes people cynical about American politics, which, of course, is an opinion held by the vast majority of voters.
But, wait, you say. Booker has also been publicly scolded by the White House — and many liberal Democrats — for his seeming defense of not only Romney but the benefits of private equity. (President Obama’s lead political strategist David Axelrod has said Booker is “wrong” in his defense of private equity.)
“Progressives are livid,” said one senior Democratic strategist who, like everyone we talked to for this story, requested anonymity to talk about the matter. “Cory already had the Wall Street crowd and already had a reputation as an independent thinker.
He just created a lot of questions amongst folks he would need in any future Democratic primary.”
And yet, there are plenty of people in the Democratic professional political class who see Booker’s actions over the last three days as less crazy and more crazy like a fox.
“Whatever race he chooses next will be an eight-figure campaign, and in the New York market, it’s political suicide to write off Wall Street money,” said one Democratic consultant. “He’s no stranger to Wall Street but he also has this transformative air about him that makes straddling this divide possible.”
Booker is widely rumored as a statewide candidate in New Jersey — either for governor in 2013 against Chris Christie or for Senate in 2014. (A recent spoof video Booker did with Christie threw some cold water on the idea that the two men were readying for a race against one another.)
There is also some genuine political value in Booker putting a bit of distance — rhetorically speaking — between himself and Obama. As a fast-rising African American politician, the comparison between Obama and Booker is inevitable.
But, Obama is not the most popular politician in the country these days so being seen as an Obama clone is not as politically beneficial as it once was. And, Booker undoubtedly wants to make his own way — whatever race he chooses next — rather than being seen as simply following Obama’s well-trod path.
All of the above is to simply say that to assume that Booker badly damaged himself over the past three days may be to misread how the politics of his comments ultimately will play out.
“Long term I think this is probably a net positive for [Booker],” said one Democratic consultant closely following the situation. “Realistically the base is always going to be fascinated by him/love him anyway.”
Mayor Booker does NOT want to be Excluded from Key Political Inner Circles.
Here is Cory Booker's Follow Up Video to his recent Appearance on NBC's "Meet The Press". He walked back his Constructive Criticism for Pres. Obama's Re-election campaign regarding Romney's Bain Capital Jobs record REAL QUICK!
See what I mean.
Booker does NOT want to be Excluded from Key Political Inner Circles.
Unfortunately for Cory he can NOT take back what he said.
Going forward it will be interesting to see how Pres. Obama's People treats Booker going forward.
The 21st Century NAACP is NOT about REAL Civil Rights. Its about Controlling the Collective BLACK Community! i.e, GROUP THINK! STAY IN LINE!
The NAACP is a BLACK Greek Letter Political Organization. Its True Mission: Controlling the American BLACK Community!
"Surrounding Yourself w/ people who consistently Agree with You on EVERY issue, means One of us isn't Necessary."
What is the Distinct Difference between BLACK Unity vs Group Think?
Group Think philosophy is what Drives Most BLACK Greek Fraternities & Sororities.
But it requires REAL Courage to be willing to Think outside the Box, Think apart from a Group & Stand by Your Principles and Opinions regarding Important Issues.
Is it a Crime for BLACK People to Think as Individuals & use the Good Minds God Blessed us with?
Should BLACK People be allowed to offer Pres. Obama Constructive Political Criticism without being Banned, Blacklisted or Ostracized by Other BLACK People?
Absolutely!
To Disagree is NOT a demonstration of Hatred or Mental Illness. Its Just Life!
Isn't that Why GOD gave us a Brain & Mind to THINK Individually with?
In fact ALL Human Beings regardless of Ethnicity or Social Status, should all be able to Disagree Agreeably without Fear of being labeled a "Troublemaker" or Fear of Exclusion. i.e, Blacklisted!
This includes Pres. Obama who does NOT Need to consistently surround himself with "YES" folks. Its Important for him to also hear Constructive Criticism.
This Morning on NBC's "Meet The Press" Newark, NJ Mayor Cory Booker offered some Constructive Criticism for Pres. Obama's Mostly WHITE Re-election Campaign Staff regarding their decision to Attack Mitt Romney's JOB Creation at Bain Capital.
While its True that All is Fair in Love, War & Politics,
I don't think its Wise for Pres. Obama's Re-election Campaign to Focus on Romney's Job Creation record at Bain when the U.S. Unemployment Rate has remained High for 3 Consecutive Years Straight.
Especially Unemployment within the BLACK Community!
Pres. Obama is a BLACK President and yet the BLACK Community's Unemployment Rate has lingered at 16 to 55% for 3 Years depending upon local Demographics.
Thus I agree with Cory Booker's analysis regarding attacking Romney on Creating Jobs.
And even though Romney's Massachusetts Job Creation record was No. 47 in the Nation, it doesn't really matter.
Why?
Because Massachusetts was NOT No. 47 for three consecutive Years in a row!
On the other hand America's Unemployment Rate HAS been High for three Consecutive Years in a row.
And Super High for the BLACK Community three years in a row.
I know that Pres. Obama DID in fact Inherit George W. Bush's Mess, nevertheless America's Unemployment Rate has been Extremely High for three Consecutive Years in a row.
That's NOT Good News for an Incumbent President seeking Re-election.
Mitt Romney is a Businessman who understands Business, that's his area of Expertise.
Romney is NOT a Politician!
He's a Businessman who knows how to make Money & knows how to Reform Businesses.
Just as it is in the Political world, sometimes Reform HURTS.
So Mayor Booker was simply looking out for Pres. Obama when he suggested that Obama's Mostly WHITE Re-election campaign staff think twice before attacking Romney's Job Creation while he was employed at Bain Capital.
Mayor Cory Booker says he is "Uneasy" regarding Democrats attacking Romney's JOBS Record at Bain. He's Right!
It Won't Work!
Romney is campaigning as a Successful Businessman NOT a Politician.
Romney's Mission at Bain Capital was to make MONEY for the company's Investor.
That's It!
Romney did that Very Well!
However immediately after Cory Booker Offered the Obama Campaign some Constructive Criticism then quickly walked it back.
Why?
He doesn't want to be Excluded from the Inner Circles.
i.e., Cory doesn't want to be Blacklisted. I understand. Its part of the Game.
Should BLACK People be allowed to offer Pres. Obama Constructive Political Criticism without being Banned, Blacklisted or Ostracized?
YES!
Isn't that Why GOD gave us a Brain & Mind to THINK Individually with?
Unfortunately the Mainstream Media does NOT want BLACK People to THINK for themselves.
They Prefer that BLACK Community All THINK Alike & Agree Alike on Every Issue. i.e., Group Think!
Group Think makes the BLACK Community easier to Control.
Now you know why the Feds always Send in the NAACP to Calm us Down or Tells us what to Think about Every Situation.
And notice whenever a BLACK Human Being chooses NOT to "Fall In Line", He Or She is Banned, Blacklisted or Ostracized by the rest of the BLACK Community.
So I understand why Cory Booker felt he had to walk back his Constructive Political Criticism for Pres. Obama's Mostly WHITE Re-election Campaign Staff.
Yes I understand.
Group Think philosophy is what Drives Most BLACK Greek Fraternities & Sororities.
In many cases BLACK Greek Fraternities & Sororities Promotes Group Think Mentality within the BLACK Community.
What is the Distinct Difference between BLACK Unity vs Group Think?
Is the Gay Lifestyle promoted within some BLACK Greek Letter Organizations?
"Crossing Over" concludes the BLACK Greek Letter Organization Pledging Process. Where do they "Cross Over" to? What's the FINAL Destination?
Is it Possible to EVER really Leave or Denounce membership to a BLACK Greek Letter Organization?
Once again I ask does BLACK Greek Letter Organizations promote Group Think Mentality within the American BLACK Community?
Dying to Belong: Pledging to become an AKA Soror. IDOLATRY & HUMAN WORSHIP!
Are BLACK Greek Letter Organizations still Necessary for Survival as a BLACK Citizen living in the 21st Century or do they Discourage True Diversity & Unity with other Ethnic Groups?
What is the TRUE Agenda of BLACK Greek Letter Organizations? To Promote Group Think without Questioning Authority! i.e., SLAVERY!
On Morning Joe, Newark Mayor Cory Booker’s subsequent video explaining that he has no real quarrel with the tactics and methods of the Obama campaign is compared to a “hostage tape.”
On Twitter this morning, I’ve been… extending the metaphor.
“One image says it all: The flag of the seal of Newark, being burned by angry crowd of Obama staffers outside Booker’s embassy gates…
Ever since Shah Daley left the Obama camp, there has been fear that the radical young students had taken over the movement… Analysts note that in his hostage tape, Booker blinks in Morse code, ‘MY CITY STILL NEEDS A THRIVING FINANCIAL SECTOR.’ …
A figure with ties to both the Obama camp and high finance, like Jon Corzine, may be permitted to visit Booker’s conscience in captivity….
The angry mob of Obama staffers is now chanting, “DOWN WITH THE GREAT LIEBERMAN,” an ancient figure associated with betrayal in their faith…
In an ominous development for the fate of Booker’s conscience, Ayatollah Axelrod has declared it guilty of “apostasy against our deity.” When Booker’s conscience called the Bain attacks “crap” and “nauseating”, he committed blasphemy under the strict orthodoxy of Obamism…
All across the country, candlelight vigils are beginning, with millions praying for the safe release of Cory Booker’s conscience.”
Newark Mayor Cory Booker, widely considered a rising star in Democratic politics, raised quite a few eyebrows yesterday when he denounced criticism of Mitt Romney's work at Bain Capital.
On NBC's "Meet the Press," Booker said, "[F]rom a very personal level, I'm not about to sit here and indict private equity," adding he's "very uncomfortable with" the recent talk about Bain. Drawing a parallel between attacks on Jeremiah Wright and criticism of Romney's private-sector work, the mayor said, "[T]his kind of stuff is nauseating to me on both sides."
It was an unexpected, and rather confusing, argument. For one thing, I've seen no evidence of Democrats attacking private equity in general, but rather, criticizing Romney's specific tactics: orchestrating leveraged buyouts, loading up companies with large debts, flipping them quickly for large profits, and treating thousands of laid off workers as collateral damage. For another, Obama isn't running around saying, "Vote for me because I was a member of Wright's church," so comparing Bain criticism to The Ricketts Plan is misplaced.
As reports of Booker's comments spread -- Republicans were promoting them heavily -- the mayor felt the need to clarify matters in a YouTube clip.
It's hard to see this as anything but a reversal. Whereas on "Meet the Press," Booker said in no uncertain terms, "Stop attacking private equity," the mayor said in his clip, "Let me be clear: Mitt Romney has made his business record a centerpiece of his campaign. He's talked about himself as a job creator. And therefore it is reasonable -- and in fact I encourage it -- for the Obama campaign to examine that record and discuss it. I have no problem with that."
Apparently, upon further reflection, the scrutiny of Bain is less "nauseating" after all.
Booker added, "In fact, I believe that Mitt Romney, in many ways, is not being completely honest with his role and his record even while a businessperson, and is shaping it to serve his political interest -- and not necessary include all the facts of his time there."
The walk-back was no doubt welcome news at President Obama's campaign headquarters, but it may be a while before Booker lives this one down. The Newark mayor has been a popular Obama surrogate, but I suspect his role won't be as high profile going forward.
To be sure, plenty of Booker's constituents work in private equity, so it stands to reason he's going to defend the industry -- though the industry is not itself under attack -- but when the Republican National Committee can exploit the on-air comments of a rising Democratic star, after he undermined one of his own party's key election-year messages, it's easy to imagine Booker riding the bench for a while.
Incidentally, CNBC's Jim Cramer, who's generally not considered an Obama ally, also appeared on "Meet the Press" yesterday and said, "Romney's known as a job destroyer, not a creator.... I think Bain sticks. I think the idea that you bring in Bain, which is what happened in the '80s. They fire a lot of people and that's how they get prosperity for the rich."
South by Southwest, the tech-music-movie conference getting under way here Friday, isn't typically a place for big newsy announcements.
The indie ethos of SXSW is more about discovering the hot emerging thing -- a new mobile app, a bold filmmaker, a brilliant set by an undiscovered band.
It's hard to predict what everyone here will be talking about by the time SXSW wraps on March 18. The festival is too huge and fractured for that, and tastemakers often disagree.
But based on early chatter, here are some guesses about what will make headlines at SXSW 2012:
Start-ups
Each year, the tech press at SXSW anoints an emerging digital-communications trend as the Next Big Thing. In 2010 it was location-based social networking, led by Foursquare and Gowalla. Last year it was group-messaging services such as GroupMe or Beluga.
This year everyone is buzzing about something called "ambient location" and "social discovery," terms for mobile, GPS-based apps that run in the background on your phone and scour Facebook or other networks to alert you when friends, or even strangers with similar interests, are nearby. Among them: Sonar, Banjo, Highlight, Gauss and Glancee.
The early favorite in this space appears to be Highlight, which will detect other Highlight users near you and show you what you have in common, such as favorite movies, TV shows, bands or mutual friends. (Hey, you like "Dexter" and Bon Iver -- me too! Let's hang out!)
Despite some obvious privacy concerns, expect to hear a lot more about these apps in the coming weeks.
Ideas
At its best, SXSW Interactive (the tech part of the conference) is about lofty ideas: how the Internet has changed us; how game mechanics can make our lives better; can social networking bring meaningful social change? And so on.
The conference hosts hundreds of talks and panels on almost every conceivable digital subject. Among this year's meatier topics: the failure of news sites' commenting systems, why happiness is the new online currency and whether photo-sharing apps such as Instagram are creating magic or filter-laden mediocrity.
We'll also hear from Sohaib Athar, the Pakistani man who unwittingly live-tweeted about the raid last spring that killed Osama bin Laden, in a talk that should shed new light on the expanding role of citizen journalism.
And then there's former Vice President Al Gore interviewing former Facebook President Sean Parker on Monday. It's not clear yet what they'll be talking about, but we're not going to miss it.
Movies
Last year's SXSW saw the launch of the Jake Gyllenhaal thriller "Source Code" and Jodie Foster's drama "The Beaver," which marked Mel Gibson's uneasy return to movies.
This week's slate of premieres looks more promising. "Buffy" creator Joss Whedon is here with a new horror film, "The Cabin in the Woods," that's gotten early buzz.
Austin native Richard Linklater is back with "Bernie," a dark comedy about a small-town Texas mortician starring Jack Black and Matthew McConaughey.
And several of Bob Marley's children are in Austin to promote "Marley," a documentary by Kevin Macdonald ("The Last King of Scotland") about their late, legendary father.
Music
Every club, concert hall and courtyard in town will be booked wall-to-wall next week with gigs by hundreds, if not thousands, of artists in every musical genre.
Which ones will break out is anyone's guess, although pre-festival buzz is building around indie popsters Dale Earnhardt Jr. Jr., Montreal singer-songwriter Grimes, disco-punk outfit Eyes Lips Eyes and College, the French composer behind the music in the film "Drive." Just to name a few.
Plenty of bigger names will be on hand, too: Fiona Apple, singing songs from her long-delayed album; indie darlings the Shins, whose new record hits stores this month; electro-dance artist Skrillex; Brooklyn trash-pop duo Sleigh Bells; and of course, rock grandaddy Bruce Springsteen.
Springsteen will give a talk Thursday afternoon and then play a gig that night at an as-yet-undisclosed Austin club. Admission is by lottery only and may become SXSW's toughest ticket.
Comedy
SXSW is getting serious about being funny. The SXSW Interactive keynote is being given by comedian Baratunde Thurston, Web editor of The Onion.
The creators of Comedy Central's "The Daily Show" talk about making political jokes on the Internet, while "Family Guy" creator Seth MacFarlane will explain his upcoming movie about a man whose teddy bear comes to life.
And "The Office's" Rainn Wilson has been given a slot on the conference schedule for an event titled "The View From Inside Rainn Wilson's Brainstem." There he will riff for an hour on, well, whatever he wants.
For first-timers, South by Southwest Interactive can be a little intimidating. The Austin technology festival, which kicks off Friday, swelled to nearly 20,000 participants last year. This year, there'll be more than 1,000 panels and presentations spread across 15 campuses in an increasingly crowded downtown.
Surviving is one thing, but really experiencing and enjoying the fest often depends on what you bring, and just as importantly, don't bring. Here's some advice on what to equip yourself with and what to ditch before you hit SXSW.
Bring: A game plan. The Interactive schedule is daunting, and that's not even counting nighttime parties and unofficial gatherings. It pays to go through the schedule on the official site and also to skim it on sites such as lynrd.com and sched.org, or sxshhh.com, a new paid site that for $5 rounds up RSVP info for SXSW-adjacent parties.
Make a tentative plan for what you want to see and have it handy in a phone or online calendar you can access at any time during the fest. The official app of the fest, "SXSW Go," is available for iOS, Android and soon Windows and BlackBerry phones.
I find the iPad version is the easiest to browse through, more so even than the SXSW website itself. It doesn't hurt to double- or triple-book your calendar for panel slots or parties in case a room fills up or if a line is too long. Always leave yourself some extra options.
Don't bring: Inflexibility. Once you have a set plan, be prepared to abandon whole chunks of it. You'll meet new people, perhaps find old friends, hear about a great party that's happening or discover that the panel you were dying to attend has been canceled or has reached capacity.
Be flexible, go with the flow and have no regrets about missing something; there's plenty to see and do. You'll wear yourself out and miss potentially serendipitous moments if you hold too firmly to your schedule.
Bring: Extra battery packs and your own Internet. A good day at SXSW Interactive is at least 12 hours long, and you might be using your smartphone, tablet or laptop a lot to look up information or try new apps. Your batteries will get depleted, and it's not always easy to find a free power outlet in packed panel rooms.
Bring charging cables and power supplies for your gear. You can also find cheap, portable backup battery chargers for most smartphones on Amazon for as little as $6 to $10. Buy at least one, maybe two. A portable power strip wouldn't hurt either if you want to share power outlets with your fellow attendees.
Some years, wireless phone networks haven't held up under the strain of all the tech-centric attendees. Outside the Convention Center in the downtown wilds, there aren't as many free Wi-Fi locations as you'd hope. If what you're doing at the fest requires a constant Internet connection, consider bringing your own Wi-Fi hotspot device.
Don't bring: Expensive tech gear or cameras that haven't been backed up. Every year, I hear about someone who had a laptop stolen or lost a camera containing a memory card full of precious photos that were never transferred to a computer. Keep your stuff safe and don't bring anything irreplaceable.
Bring: A giant smile. Texans are very friendly. We want nothing more than for you to go home after your trip and rave about how delicious our barbecue tastes and how we're all as soulful and attractive as the characters on "Friday Night Lights." But it only works if you're humble and attitude-free.
Which brings us to ...
Don't bring:
Attitude. In recent years, the influx of social media gurus and marketing mavens has changed the vibe at some parts of SXSW Interactive from a spring break for nerds to a focus group for startups aimed at Twitterholics.
Leave behind the smarmy business networking and condescending attitude toward those who aren't online rock stars. Don't be That Guy (or Gal).
Bring:
Comfy shoes, light clothes and an umbrella. March and October are our best weather months in Austin, but it can turn on a dime. Dress lightly, but bring a jacket for the colder evenings and have an umbrella handy in case a thunderstorm rolls through. And wear comfortable, broken-in shoes -- you'll be on your feet a lot.
Don't bring: Ostentatious cowboy boots and a 10-gallon hat you only wear when you're visiting Texas. We Texans see right through that crap.
Despite Lies From GOP & Tea Party Leaders About How Dismal The American Economy Is, Many Economists Agree There's No Better Time To Start A Small Business Than Right Now! Especially In The Service & Technology Areas. And...Where Are The BLACK Bill Gates & Steve Jobs? Why Only ONE Black Techie? (Omar Wasow) It's High Time More Of Us Get Our Piece Of Silicon Valley's Pie Too!
"It's hard to find black geeks. We're out to start a movement that affirms the geek in you. A movement that says black geek is ok. We're out to support each other and grow an interest in tech in the people around us. We're out to solve hard problems and engage others. We're about being inclusive of all people, yet we have a special dream for our communities to become more engaged in tech. Here, the rubber meets the road. Welcome!" - Blacks In Tech Meet Up: http://www.meetup.com/NY-Blacks-in-Tech/
Hank Williams has performed dozen of times to audiences like the one here on Thursday at the Kapor Capital investment firm.
This time, however, the 46-year-old software veteran wasn't the only black person in the room, as is often the case at fundraising meetings in Silicon Valley.
Williams is a member of the NewMe Accelerator's inaugural class. The tech incubator was formed to help minorities get advice from successful executives and put their new Internet ventures in front of investors.
For two months, eight black entrepreneurs worked (and some lived) together in a rented house in Mountain View, California, which is the same city Google, a NewMe sponsor, calls home.
Having removed himself from the Silicon Valley technology scene for a decade, Williams re-emerged on Thursday to demonstrate the project he's been working on for four years with two colleagues in New York.
When Spaces begins testing in the next few weeks, people will be able to sign up for an online storage locker, which allows them to organize, search and transmit various types of data. It can handle files, e-mails, calendars, Twitter messages and other digital information that competitors generally don't facilitate.
The concept is unique, yet familiar to investors salivating over the unexpected success of another new Web-storage service, Dropbox. Williams' Kloud.co has been self-funded so far, but he is about ready to exchange equity in his company for cash.
Before the dotcom bubble burst a decade ago, Williams had raised $40 million for an Internet music service called Clickradio. But he is an anomaly of sorts in the Silicon Valley institution, where black people don't typically start Internet businesses and, for that or whatever other reason, rarely receive venture capital.
Despite his legacy and deep connections in Silicon Valley, Williams was nervous on demo day.
"I will never go up there in front of a roomful of people and not be nervous," he said in an interview afterward. "The tech industry is pretty clubby," he said earlier, and it often shuns prospects who "didn't go to Stanford or work at Google."
Among the presenters, Williams stood out not because he's a person of color but because he's the grayest of those who presented on stage, with salt-and-pepper hair on his head and face.
The rest of the class is fairly green when it comes to raising capital. Associating with this minority-focused Web startup group, an innovative idea in Silicon Valley, has helped them to secure meetings that they otherwise wouldn't have gotten, said several of the entrepreneurs.
"People like to think of us in terms of what they already know," said Crisson Jno-Charles, one of the NewMe Accelerator participants. "The way Silicon Valley works is word of mouth."
Last year in Boston, Jno-Charles, a black computer programmer, began building Fetchmob, along with Alisa Boguslavskaya, who is not an ethnic minority but as a woman, is likewise a minority in the tech industry. Fetchmob is targeting colleges with an online marketplace for ordering groceries that other students can volunteer to deliver.
Another male-female duo started BeCouply, which makes an application for scheduling and chronicling dates. Statistically, blacks and women get little venture funding -- less than a tenth combined, according to some studies. BeCouply founders Pius Uzamere and Becky Cruze have another factor stacked against them: investors tend to shy away from entrepreneurs who are romantically involved, they learned.
"He's black; I'm a woman; we're a couple," Cruze said in an interview. "So we're screwed, right?"
Angela Benton, the NewMe event and group organizer who also pitched an app called Cued that offers restaurant recommendations based on a person's interests, said she would consider the incubator a success if three of the companies received funding.
Some investors here were more optimistic.
"The expectations aren't set, and we need to do something about that," said Mitch Kapor, a software pioneer turned venture capitalist who lent his office and contacts to the NewMe Accelerator.
James Joaquin, who attends the top incubator events and pitch presentations, said of the NewMe crop: "These entrepreneurs, these startups are at the same caliber."
Matt Van Horn, an executive at the venture-backed social networking company called Path, spoke at an event for the NewMe class and he agreed. "I've just seen a lot of growth," he said.
Joaquin is the CEO of a popular service for synchronizing bookmarks between Web browsers. He also finances young companies, a practice called angel investing. He added, "I think the majority of these companies will get angel investments."
He named Pencil You In as one of the standout presentations. The service, led by Tiffani Bell, lets people schedule haircut appoints online.
Other presentations included:
Aislefinder is a digital grocery list that tags each item with the aisle number the store stocks it in, as long as the product is among the 80,000 at 1,300 stores in the database. Users have made 12,000 shopping lists so far.
Playd, an app geared toward video-game players, is expected to launch this month.
Central.ly has a drag-and-drop website geared toward small businesses and is already bringing in revenue.
Wayne Sutton, whose service called Vouch lets users endorse associates via social networks, offered what sounded like music to a tech financier's ears. "We're going to have an API integrated with mobile apps, and we're going to make some money," he said in rapid succession, to laughter.
In a business environment that values teamwork, at least one person in this crop of entrepreneurs possesses a skill uncommon among the typical pasty-faced programmer.
Hajj Flemings, who co-founded a personal website builder called Gokit, concluded his speech saying: "I'm a former college athlete, and I always play to win."
The maroon couch was big enough to take up half the living room, but by the time the 10th woman arrived it could hold no more.
The room temperature was rising from all the body heat. Chairs were brought in from the kitchen. Even the floor was called into service.
“I’d like to start the collection,” Alethia Mendez announced after the last of the 15 women had arrived on a recent Saturday morning.
Therese Prentice counted out crisp bills, divided them, tucked them in envelopes and recorded the amount in a flimsy green book. The next woman repeated the exercise, until all 15 had made their payments for the week.
Then the money was handed to Ms. Mendez, the group’s 24-year-old banker.
“This is the way it was done in Bangladesh, so we do the same thing here,” Ms. Prentice said. “It’s our ritual.”
The women are clients of Grameen Bank, the international organization that pioneered “microloans” to third-world entrepreneurs and that, along with its founder, won the Nobel Peace Prize in 2006.
But the women were not in one of the abjectly poor villages in Bangladesh where Grameen usually does business; they were in a modest two-story brick house in St. Albans, Queens.
Since the beginning of January, 11 Grameen lending groups have sprung up throughout Queens in the bank’s first venture in the United States. They have lent more than $250,000, in amounts ranging from $500 to $3,000, to more than 100 women for income-generating activity like elder care, housecleaning and flower-arranging businesses.
“Of the entire U.S. population, 40 percent is underbanked, and as a result end up using payday lenders, check cashers and other, more expensive services,” said Vidar Jorgensen, president of Grameen America. “We’re here to meet this huge need.”
If the program works well, Grameen intends to expand nationwide. But while it has flourished elsewhere, it is not clear whether Grameen’s model — which relies on peer pressure rather than collateral to make sure women repay their debts — will work here, and whether such small loans can actually help lift its borrowers out of poverty.
“In parts of the United States it may very well work, but I have real doubts about it working in places like New York City,” said David R. Jones, president and chief executive officer of the Community Service Society of New York.
His group gives cash grants averaging $3,000 to city residents in financial distress — for instance, to people who have fallen behind on their rent or who cannot pay their medical bills. But Mr. Jones said that $3,000 is generally not enough to stabilize a New York resident.
Still, Grameen’s experiment here is being closely watched. Elaine L. Edgcomb of the Aspen Institute in Washington, who co-wrote a 2005 study of more than 100 microlending programs in the United States, said that borrowers do “move out of poverty, and the business can be an important contributor to that, but it’s not always the only contributor.”
“For many families, the increase in income is sufficient to take them above the poverty line,” she said.
Grameen’s distinguishing feature is its mandatory weekly meetings at which borrowers learn money management skills from their banker and from one another and must make their payments in front of everyone else in the group. If one person defaults on a loan, Grameen will not call a lawyer or a collection agency or confiscate any assets. Instead, no one in the group will be eligible for a new loan.
“You have 30 eyeballs who are looking at you and making you accountable,” said Myriam Pericles, a 41-year-old first-generation Haitian-American, who will use her $3,000 loan to expand her computer consulting business. She was a little skeptical about the process. “Maybe all this works in Bangladesh, but this is America, where people are different — our value system gets warped, our word is not our bond.”
Nicole Brown, 30, who immigrated from Jamaica as a child, is using her $2,000 loan to start a day care business. “I didn’t have it in my head to start my own business, but if you want to be great in life, you have to have your own stuff,” she said. She added that she was drawn to Grameen through her sister, Wendy Brown, who is using her $3,000 loan to expand her apartment-cleaning business, Meticulous Cleaning Service L.L.C.
As the other group members looked on, Wendy Brown, 36, made her first payment on the $3,000 loan: $60 toward principal, $6 for interest and $2 toward a savings account. If she makes all her payments, she will retire the debt within a year and be eligible for another loan. “It’s very simple, as opposed to getting it through a normal bank and going through the red tape and getting denied,” she said.
Grameen America’s managers, who are based in Jackson Heights, say that all the women in Queens are paying back their loans on time. But adapting its model to the United States has not been easy.
While Grameen officially requires a home visit to verify that borrowers are truly poor — they must fall below the United States Census Bureau’s poverty line, currently defined as $21,027 for a four-person household with two children — some borrowers at the St. Albans meeting still had not received a visit. Grameen organizers said last week that all borrowers would receive home visits in the next few weeks.
Finding potential borrowers has been another challenge.
“Here, the women are not working in the community where they are living,” said Shah Newaz, the general manager of the Jackson Heights office, who has worked with Grameen for 26 years all over the world. It is hard to meet with the women “because they are not in their houses in the daytime, and in the evening they are very tired and preparing meals, taking care of children and getting ready for the next day.”
Grameen aims its loans at women, saying it has found them more responsible than men and more comfortable with the group model. So far, the Queens operation has lent only to women.
But the organization says it will lend to men here, and is aware that it cannot discriminate on the basis of gender. “We want a female candidate, but in the U.S. you can’t say that in advertisements,” Mr. Newaz said. “That is a problem.”
The idea behind Grameen Bank began in Bangladesh in 1976, when Muhammad Yunus, an economics professor, lent a total of $27 to a group of 42 women in Jobra, a southern village. All of the women repaid their loans. Since 1983, when Mr. Yunus formally founded Grameen, it has lent $6.8 billion to 7.4 million Bangladeshis; 97 percent of its borrowers are women.
Mr. Yunus tried to start a microlending program in the United States in 1985, when he was invited to rural southern Arkansas by Bill Clinton, who was then the governor. But the program Mr. Yunus helped start, called the Good Faith Fund, failed. The group lending model never caught on. If given the choice, “any human being on earth would want to borrow as an individual rather than as a group member. It didn’t work very well in this country,” explained Mary Houghton, founder of ShoreBank, who helped advise the Arkansas experiment.
Another microfinance organization, Acción USA, which has lent money to more than 20,000 people since 1991, also attempted the group lending model in its early days. “We found that the group methodology did not work well because there was a general lack of trust among potential borrowers and an unwillingness to guarantee another person’s loan,” said Bill Burrus, president and chief executive of Acción USA. The organization has since adopted a more traditional individual lending model in almost all cases, and its default rate has ranged from 4 to 7 percent in recent years. Grameen says its default rate in Bangladesh was less than 1 percent, though higher in times of flooding.
Grameen America is aiming to reach 21,000 borrowers within five years, the number that its organizers say would allow it to break even. To improve its chances of success, it relies upon dense social networks, the kind often found in immigrant communities, to help form its groups of borrowers. The center in St. Albans consists predominantly of Caribbean and African-American women.
Not long ago, they would wait out winter afternoons between cleaning jobs on subway platforms, unable to afford lunch or dinner.
“We’d starve until we got home,” Nicole Brown said. The sisters, who had moved back in with their mother, did not want to ask for more help from her, so they turned to Grameen.
“Last year, I had $3 in my pocket,” Wendy Brown said. “This loan could help be the turning point.”
Later this year, a marketing manager will sit down for his first day of work at HomeAway, a company that helps people rent their vacation homes online. In the firm's sleek Austin, Texas, headquarters, a glass-wrapped building decorated with travel souvenirs, the marketer will flip on his computer and do his job — a job no one has done before. This, you see, will be a brand-new job, one of the most coveted commodities of economic recovery.
How this job will come to exist is at the heart of the most pressing problem in the economy today. Since the start of the recession in December 2007, the U.S. has shed 8.4 million more jobs than it has gained. The unemployment rate hovers near 10%, and broader measures of labor-market woes that include underutilized workers are as high as 16.8%. Go down the nation's list of economic problems — from mortgage defaults to state-budget shortfalls — and joblessness lurks in the background.
Even as other economic signals have started to turn positive, the jobs situation has remained bleak. In February, the economy lost a net 36,000 jobs, which is leagues better than the 726,000 lost in February a year earlier but points in the wrong direction all the same. Were the economy to magically start generating jobs at a healthy clip — say, 200,000 a month — it would still take 3½ years to return to where we were, never mind the jobs we need for new entrants to the workforce.
This reality has triggered a nearly convulsive political response, given that elections are won and lost over the state of the economy and the mind-set of wage earners.
That's why President Barack Obama, in his State of the Union address, called jobs his "No. 1 focus" and proposed repurposing bank-bailout money to lend more to small businesses, which would then, presumably, generate jobs. On March 17, Congress passed a job-creation bill that includes, among other things, an estimated $13 billion worth of tax incentives to coax companies into adding to their payrolls.
The cold truth of the matter, though, is that there's not much Washington can do to gin up permanent jobs on such short notice. The federal government is a key player in engendering job growth in the long term — by establishing smart policy in areas such as trade, education, immigration, health care, energy, infrastructure and taxes — but over the course of months or even a few years, there's little it can effectively do besides hiring directly or stepping in as a buyer of goods and services.
The great American job-creation machine always has been and will continue to be private enterprise.
The problem is that companies are beat-up from the longest economic contraction since the Great Depression. Plenty of economists think the worst is now behind us, but firms are still plagued by uncertainty about how fast the economy will recover.
Nor can they plan responsibly without knowing the bottom-line costs of the massive new initiatives out of Washington on health care reform and carbon-emission regulation. Even companies that are financially fit often don't feel like taking the risk of ramping up operations and hiring more workers. There's been political pressure on banks to lend, but the problem for some bankers, like Frost Bank CEO Dick Evans, is that many businesses are debt-shy. "I'm aggressively trying to make loans, but right now they don't want to borrow," he says. "At this point," says Harvard Business School strategy expert Michael Porter, "the No. 1 thing that will create jobs is the perception and confidence that the economy will start growing again."
The good news is the perception as well as the reality is improving in some areas of the country. Just 12 out of 384 metropolitan areas ended 2009 with more jobs than they had at the beginning of the year, but more recently, the numbers have been looking better. Over the past six months (through January), 72 cities gained jobs, according to a Moody's Economy.com analysis of data from the U.S. Bureau of Labor Statistics. That may seem like a slow start, but it's a meaningful one to people being hired in places like Flagstaff, Ariz., Augusta, Ga., and Lansing, Mich.
Austin lands on that list too. The central Texas city of 760,000 has a few built-in advantages over other cities. The University of Texas and the state government — Austin is the capital — provide some economic stability. And as the Southwest's technology center, Austin is home to many high-growth (though high-risk) companies.
It is also a music mecca and the gateway to Texas hill country, attributes that help it attract desirable workers. For all these reasons, it hasn't been battered quite as hard as other cities by the recession; the unemployment rate was nearly 3 points below the national average at the end of last year.
Still, the metro area has seen big job losses from major employers, including the computer maker Dell and semiconductor manufacturers like Freescale and Advanced Micro Devices. It's not hard to find the desperate stories here that you find throughout the rest of the country: the woman laid off from book publishing two years ago who hasn't been able to find a permanent job since; the interior decorator who used to have a six-figure salary and now sells furniture for $30,000 a year.
Yet Austin also offers a model of hope. The city's surfeit of computer-programming talent allowed a video-game outfit to hire 50 developers and designers in the past two months. A manufacturer is building a new plant north of town to take advantage of the growing commercial-lighting industry even as its construction-related business falls off. A pharmaceuticals start-up is looking for new lab workers.
Some companies are expanding, and others — markers of the city's entrepreneurial spirit — are starting from scratch. Austin is emerging as one of the first pockets of the country where people are getting back to work, showing that even in this dreary economic environment, job creation can happen — and illustrating how it will eventually take root around the nation.
One Created Job
To start to understand the process, swing by HomeAway's downtown Austin headquarters. This is where, sometime in the next nine months, a marketing manager will show up for his first day of work at one of the economy's newest jobs.
The story of how this job will come to exist starts five years ago, with one man's frustration at how hard it was to find and rent a beach house for his family vacation. Brian Sharples, who was between jobs at the time, didn't understand why he couldn't go to a single website — as he would go to Expedia for airline tickets — to find a comprehensive list of houses for rent. So, with a business partner, he started such a site. Five years later, the company has $120 million a year in sales, employs 600 people in five countries and is ramping up its marketing push to grow even larger. That's why it needs a new marketing manager in Austin.
HomeAway is hiring for a very simple reason: people who own houses and want to rent them out are happy to pay $300 a year to have the company spread the word — which it did in a Super Bowl commercial. "Jobs get created by providing a product or service that's better than what's out there," says Sharples. "There was an existing market for vacation rentals, and we've created efficiencies in that market. Now that it's cheaper and more efficient, more people are doing it, and the market is expanding."
In other words, to create jobs, start by creating something people are willing to pay for.
That's not as self-evident as it may sound. There is no shortage of theories about why companies aren't adding jobs faster. Banks won't lend to enable them to expand. Extra workers are too expensive because of taxes and health care costs. But the real clog in the nation's job-creating machinery is much more basic: a lack of demand for goods and services.
Just ask small businesses. American Express did that in a January survey, asking, What would most spur companies to go out and hire? An increase in customer demand, according to 42% of the respondents. Tax credits and better access to loans trailed, at 11% and 5%, respectively.
To see that dynamic in action in Austin, cut diagonally across the street from HomeAway and pop into the headquarters of Whole Foods. For a decade, the upscale grocery chain saw sales grow at about 20% annually. Last year, sales barely budged up 1% — and the 30 stores that executives planned to open around the country were trimmed to 15. Those 15 stores added nearly 4,000 jobs — just half as many as would have been gained had people kept buying organic peppers and salted caramels at the same pace. "There's too much thinking about how to create jobs," says James Manyika, a director of the economics-research outfit McKinsey Global Institute, "and not enough about how to create demand."
Why is that? Well, focusing on demand is a tricky thing to do. For decades, the economy's engine of demand has been American consumers — a population now overindebted, underemployed and endowed with a newfound sense of thrift. The explosion in credit-card and home-mortgage debt before the recession tells us the demand that was there was never sustainable. This is why the President now talks about doubling exports over the next five years and the importance of passing trade agreements with countries like South Korea, Panama and Colombia. If we can't sell to ourselves, there is at least partial salvation in selling to others.
It's also the reason the job-creation bill passed by Congress includes an accelerated tax break for companies buying equipment. Companies that sell equipment need people to build it, and companies that buy equipment need people to run and maintain it. Many firms outside of financial services have surprisingly solid balance sheets, Manyika points out, and might be wooed into investing sooner rather than later. That would drum up sales for the firms they'd be buying equipment from.
That prime-the-pump logic is also behind the use of the government to create demand — what we know as stimulus spending. Last year's $787 billion American Recovery and Reinvestment Act has received its fair share of criticism for funds being dispersed too slowly and for not doing enough to stem unemployment. But in Austin, Bruce Matous has a different point of view. "This saved my family business," says the president of Matous Construction.
Matous is referring to a $28 million contract to upgrade the Hornsby Bend Biosolids Management Plant, a city-owned facility that recycles sewage sludge and yard clippings into lawn fertilizer. The city desperately needed to upgrade its 1980s-built anaerobic digesters (you can see the foam insulation chipping off) and now has the money to do so, thanks to a 30-year interest-free loan from the federal stimulus package. To get the project funded, the city applied to the Texas Water Development Board, which had been handed stimulus money by the Environmental Protection Agency.
Driving around Hornsby Bend, Matous points to a group of half a dozen workmen and says, "We would have laid off all those guys." The construction industry has been brutalized in Austin, as it has been nationally, and by the end of last year, Matous was looking at just a few more months of work in the pipeline. Then he won the Hornsby Bend contract. Now the company is fielding job applications from people 200 miles away and is creating business for other firms, from the equipment maker Caterpillar to R&R Industries, a California outfit that makes yellow safety vests and just sold a couple hundred of them to Matous.
Injecting money into the system — whether through consumer spending, business investment or stimulus funds — is a short-term fix designed to get the gears moving again. That re-establishment of momentum is an important part of economic recovery. But getting things moving isn't the same as keeping them moving. In the long term, there is only one way to create enough jobs for the economy: innovation.
Start-up Nation
Twenty miles south of Austin, in a nondescript industrial park, sits a bland, corrugated-metal building with a roll-up door. Inside the building sits the future of the U.S. economy.
Or at least part of the future. Five and a half years ago, the lights went on at Xtreme Power with half a dozen employees and a vision to make wind power an easier sell. One of the big stumbling blocks in persuading utilities to buy wind is its unpredictability. The wind blows, and then it stops, while utilities' customers demand a constant flow of power. Xtreme's solution: a shipping-container-size power-management system that takes in energy from wind farms, stores it and then smoothly releases an uninterrupted supply of it out the other end.
That innovation carries real economic value. Wind-farm operators want to sell more power, and they'll pay for something that helps them do that. As a result, jobs are created. Xtreme, which employed 57 people at the beginning of 2009, installed its first major system in Hawaii over the summer and now has $100 million worth of orders in the pipeline. The firm currently employs 105 people and is again looking to grow. Its plan is to buy a factory in Wixom, Mich., that Ford shut down in 2007.
It's the dream scenario of the green-technology revolution: a plant that used to make Lincoln Continentals starts churning out the mechanical apparatus of wind-power storage. Michigan autoworkers, knocked off their feet by a collapsing industry, put their skills to use in the quintessential "industry of tomorrow." Once those high-value manufacturing jobs are in place and a group of workers has money to spend, other jobs follow — at doughnut shops, hair salons, real estate brokerages and law firms.
Green jobs are hardly the economic cure-all they are often made out to be. They currently account for only about 0.5% of the U.S. workforce, and plenty of the industry's job growth is likely to happen overseas. China is already the world's largest manufacturer of solar panels. But the model provided by green-energy players is the right one: create new products and new markets, and watch new jobs flow. Without the personal computer, we wouldn't have Google and its 20,000 employees. Without everyday low-cost pricing, we wouldn't have Walmart and its 2.1 million.
Austin provides a useful lesson in how to stay on top of the innovation game. Start with an educated population (43% of Austin residents have a bachelor's degree or higher), mix in a robust venture-capital scene (one of the best outside Silicon Valley), add a supportive community of peers (groups like Bootstrap Austin band together hundreds of entrepreneurs) and wrap all that up with a state government unafraid to throw money at companies that need a little help getting off the ground.
Over at the University of Texas, the nonprofit Austin Technology Incubator houses fledgling firms, plying them with business-plan advice, contact with financiers and lots of coffee over which to share ideas and solve problems. The incubator's 20-year record: more than 200 companies and thousands of jobs created. "Companies don't start unless they're resourced," says Rob Neville, who launched one company with the help of the incubator and is now scaling up another, Savara Pharmaceuticals, in anticipation of support from the Texas Emerging Technology Fund.
These new companies are key to job growth. People talk about small businesses being such great generators of jobs, but a more precise assessment is that young businesses are. John Haltiwanger, an economist at the University of Maryland, has been studying government data for 25 years and has determined that about a third of all new jobs created come from start-ups. Furthermore, young companies add jobs faster. From 1980 to 2005, the typical 15-year-old firm added jobs at a rate of 1% a year, the typical three-year-old firm at a rate of 5%. "These are the rocket ships of the economy," says Haltiwanger.
Of course, young firms are also more likely to flame out and vaporize their jobs — but job destruction is, perhaps surprisingly, par for the course no matter what the size of a company. Even in the recession, about 4 million people a month have been landing jobs. We just don't feel the impact of that because more people have been losing them, leaving us with fewer employed people overall. That constant churn can be jarring for individual workers, but it represents one of the key strengths of the American economy: flexibility. That's certainly true for established companies too.
To see why that matters, stop by Ringdale, a company in the northern Austin suburb of Georgetown. One of Ringdale's main business lines used to be security systems, but as the construction of new buildings has remained depressed, so have sales of things like the ID-card readers that go inside them. Ringdale's response: throw more resources, including employees, at its burgeoning line of light-emitting-diode products, for which it holds a number of patent applications, thereby answering increased demand for low-energy commercial lighting. "We've redeployed," says CEO Klaus Bollmann, whose firm will open one plant expansion in a few months (accounting for an additional 10 to 15 jobs) and a second, larger one next year (120 more jobs). As the economy shifts, reinvent.
That good advice isn't just for companies.
Rewiring The Workforce
In northwest Austin, in cubicles packed with toys and rock-band posters, people in T-shirts and jeans are hard at work creating a video game that someday will be played online by thousands of people at a time. It takes years to produce such a complex game, representing a major investment for California-based Electronic Arts. Why is this happening in Austin? Simple. "The talent pool is here," says local BioWare studio co-head Gordon Walton.
In the national job-creation discourse, jobs often start to sound like things that companies one day decide to hand out. In reality, job creation is also a function of the labor supply. It's not just about firms wanting to hire but also about having people they can usefully employ. There are only four or five cities in the U.S. where Electronic Arts would be likely to develop such a complicated product. Austin is one of them partly because it has a tech-savvy population and a history of fielding such work — and also because it's an easy place for people to train for the profession, with local colleges offering courses in game design and programming.
In a down economy, plenty of people assume responsibility for reinvention. Lindsey Spratt lost her job as an assistant audio engineer and is now studying to be a chef at the Texas Culinary Academy. Rob Carruthers was laid off from a job as a project manager at a software company and is putting his dual engineering-business background to use as a consultant to tech start-ups and schools.
Austin also illustrates a systematic approach to making sure people have the right skills to match what companies need. For the past two years, Workforce Solutions, a government-funded not-for-profit, has been partnering with businesses and local schools like Austin Community College to develop a series of training courses to help people upgrade their skills and earn certifications. The modules are built to be accessible to people well into their careers — recognizing that a 40-year-old isn't likely to have two or four years to return to school full time — and focus on Austin's up-and-coming industries, like biotech, renewable energy and video-game development. "When these jobs come, we'll have the people with the skills to move into them," says Workforce executive director Alan Miller.
Employers are stepping up too. A few blocks east of the state capitol stands a hospital, one of 10 in the metro area owned and run by the not-for-profit Seton Family of Hospitals. An adjacent building that used to be a children's hospital now houses a clinical-education center. Wards and operating rooms are filled with patients — sophisticated, computer-controlled dummies that nurses-to-be can use to receive valuable training. One dummy even gives birth.
Health care as an industry is booming in most places, and Austin is no exception. Over the past three years, Seton has built three medical centers and hired 2,300 people. But getting people into those jobs — nearly 30% of which are for nurses — is a multipronged process. A few years ago, there was a waiting list to enter nursing school in Austin. Seton had to hire nurses trained in the Philippines. Now, with the clinical-education center's extra capacity and new partnerships with nursing programs at local colleges, Seton can hire locally.
That sort of coordination among workers, educators and companies is vital, considering that it can be difficult if not impossible for individuals to know which job to train for next. Even the head of Workforce Solutions admits that focusing on biotech, green energy and video games is really just an educated guess based on Austin's historical strengths and industries that seem poised to grow. One of the reassuring things about capitalism is that over time, workers and companies are pretty good at figuring out the most productive ways to get together. In the short term, though, that realignment can be a struggle.
Even so, there is a clear trend emerging: tomorrow's jobs will require people to add more value than ever before. Consider Samsung's only semiconductor-fabrication plant outside South Korea, which sits in northeast Austin. Since the fall, the factory, which makes flash memory for devices like smart phones and iPods, has been undergoing a $500 million upgrade. In advance of the plant's early-summer reopening, Samsung will hire about 200 engineers and technicians to run and service the new, more sophisticated equipment inside. But with the new factory and those new jobs, 500 other positions have been eliminated: robots, not people, will now transport silicon wafers.
That's actually not so awful, economically speaking. Innovation and increased efficiency are the lifeblood of any economy. But it does mean that as we tackle the topic of creating jobs, we must realize that the sustainable ones will be those that build from a human being's unique abilities, like problem solving and creativity. If we want to encourage high-quality-job creation, we need to find a way to enable economic evolution. We need to set the stage for companies to create tomorrow's goods and services, and we need to be prepared to support workers in their quest to adapt.
Washington Isn't The Answer
In Washington, the bulk of the response to job loss has been to drum up short-term demand. Last year's stimulus package kept the economy from spiraling further downward. Current proposals to extend unemployment benefits and send $100 billion to struggling local governments would have a similar effect — allowing consumers and cities to keep on spending.
Tax cuts for businesses that hire — and then retain — workers will likely wind up doing more of the same. No businessman in his right mind is going to add the long-term liability of a worker simply for the short-term benefit of a tax break. On the other hand, such incentives may accelerate some hiring that would have eventually happened anyway, and that would put more money into consumers' pockets faster. Of course, extra spending and tax cuts contribute to the $1.5 trillion federal deficit, and that drags on the economy.
Easing the flow of credit, especially to small businesses, has also been a major policy push — and a tricky one to size up. The efficient reallocation of capital is key to any economy but especially to one like the U.S.'s, which counts on dynamism as a competitive advantage. Lending to businesses is down; that much is true. But is that because banks are overly cautious and asset-impaired or because businesses are uncertain about the future — or just aren't creditworthy borrowers? A recent survey by the National Federation of Independent Business found that companies that couldn't borrow typically had declining sales or depressed real estate values. Simply opening the lending spigot doesn't seem to be the answer.
All these ideas are short-term. That's understandable. People who are out of work want immediate solutions. Politicians wouldn't be doing their jobs if they didn't try to give voters what they want.
The conundrum is that the most useful things government can do to encourage job growth aren't flashy initiatives with quickly visible results. "There's no magic wand we can wave over companies that will induce them to go out and hire people," says Matthew Slaughter, an economist at Dartmouth's Tuck School of Business. "We need to think long-term."
If Congress wants more and better jobs in the U.S., it should do things like create a permanent tax break for companies that invest in research and development, make it easier for foreigners who get science and engineering Ph.D.s at American universities to stick around after graduation, and spend serious time and money improving the nation's infrastructure, including the electric grid and broadband network. Such initiatives will not create many jobs that can be tallied on a spreadsheet. What they will do is more important: lay the groundwork for businesses to innovate and grow.
The same is true on the worker side of the equation. If the key characteristics of the American economy are flexibility and forward motion, then we would all be better off if people felt more support — both financial and social — to invest in their education, switch jobs and industries and venture out to start new firms.
Establishing job creation as a discrete goal is a misleading enterprise. Beyond cyclic swings in demand, what we're really talking about creating is not jobs but ideas and technologies and more efficient ways of producing and selling goods and services. If that sounds like a harder goal to set, let alone achieve, that's because it is.
Yet as Austin richly illustrates, in the wake of the worst economic downturn in generations, that sort of innovation is starting to happen. And from that, the jobs will follow.
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