Executive policies key to successful job growth
Some economists say Bush's tax legislation is not enough
to curb what is expected to be a 'mediocre'job market
BY LEIGH STROPE
THE ASSOCIATED PRESS
WASHINGTON, D.C. — Hiring is
picking up and President Bush is on
track to preside over job growth in
his second term, shedding the Her
bert Hoover label of being the first
president since the Great Depression
to lose jobs under his watch.
Bush’s prescription for job growth
includes extending the tax cuts
passed in his first term, overhauling
tax laws, limiting jury awards in law
suits and increasing domestic energy
exploration and production.
Economists say the bigger imped
iments to job creation are soaring
health care and energy costs and the
swelling trade deficit, especially
with China.
Businesses, not presidents, create
jobs. But presidential policies help
create economic conditions that af
fect companies and hiring.
Economists estimate that an aver
age of about 1.4 million jobs in the
United States will be created each
year over the next decade as busi
nesses strive ever more to compete
globally. That compares with an
average of about 2.8 million added
annually during President Clinton’s
eight years in office.
“We can expect to see a mediocre
job market for the next year from the
perspective of workers,” said Peter
Morici, an economist and international
business professor at the University of
Maryland. “And we can expect to see
moderate growth in the economy and
employment, but not enough to turn
what is essentially a buyers’ market
into a sellers’ market.”
Analysts say Bush’s tax cuts
helped the economy through reces
sion and that while job creation
lagged, extending them would en
courage new hiring.
Employers added 1.8 million new
workers to their payrolls so far this
year, with the hiring outlook bright
ening greatly in October. But there
are 371,000 fewer jobs than when
Bush took office in 2001.
“There’s no question that when you
lower taxes, whether you do it for up
per-income, middle- or lower-income,
you create jobs,” said Anthony Chan,
senior economist with JPMorgan
Fleming Asset Management.
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Job growth hinges on incentives
President Bush’s plan for job growth includes extending his five
rounds of tax cuts, overhauling the tax code, limiting jury awards
in lawsuits and increasing domestic energy production.
Chan said the tax breaks failed to
create the millions of jobs promised.
But, he said, “The recession proba
bly was a lot milder than it other
wise could have been because of
the stimulus.”
The cost of making the cuts per
manent is more than $1 trillion, a
daunting figure in an age of record
budget deficits. But Bush is likely to
get much of what he wants with larg
er Republican majorities in both the
House and the Senate.
The ballooning budget deficit
hit a record $413 billion in 2004.
It could lead to rising interest rates
that limit business investment
and slow production. But many econ
omists say the deficit is not an imme
diate threat to job creation.
“In long run, yes, but in the next
couple of years, probably not,” said
David Wyss, chief economist at Stan
dard & Poor’s in New York. “The
biggest problem with deficits is you
have to pay them back. ”
The trade deficit is of greater con
cern to some economists. U.S. man
ufacturers say China’s practice of ty
ing its currency, the yuan, to the
dollar has undervalued China’s cur
rency by as much as 40 percent, giv
ing companies there a huge advan
tage over U.S. competitors.
About 2.7 million manufacturing
jobs have been lost since Bush took
office and the shift of U.S. jobs
to other countries was a major issue
in the election, especially in Rust Belt
states.
Morici predicted that the manufac
turing sector “will continue to
deteriorate to the point of peril. We
are now losing our capacity to resur
rect it if something is not done soon”
to deal with China.
The trade deficit was running at an
annual rate of $592 billion through
September. That compares with last
year’s $496 billion. The administration
has pressed China unsuccessfully to
change its currency practices and has
promised “to level the playing field. ”
Other economists say red tape is
hurting U.S. companies’ ability to
compete globally and they praise
Bush’s goal of continuing to loosen
government regulations.
The jobs market also has been
shaky because of rising costs for
health care and other benefits. Em
ployers responded by working their
existing employees harder to avoid
increased expenses of new workers.
To control health costs, Bush
wants to limit jury awards in
medical malpractice lawsuits and
to expand tax-free health savings ac
counts that can be used to pay med
ical bills. Economists doubt the
measures would have much effect.
“I really do see what the president
wants to do on health care ... as a fig
leaf,” Morici said.
Economists do not see much relief
in the future from oil prices. Bush’s
energy plan, emphasizing drilling,
exploration and production, would
add some jobs. Bolstered by a larger
majority, Republicans plan to make
another push to open an Alaskan
wildlife refuge to oil drilling. But
Bush’s energy plan falls short in con
servation and alternative energy
sources, which are longer-term prob
lems, economists said.
Uniforms: EPD says ordinance is proactive
Continued from page 1
monetary consequences for Eugene
police because it would require other
agencies to change their attire, Brown
said. But he didn’t believe DPS had
reason for concern over potential costs.
“They could be phased in,” he said.
“It doesn’t have to be done immedi
ately. Those uniforms don’t last forev
er. For the interim you could put a yel
low stripe or something on your hat
— do something to distinguish it.”
But the recommendation might
not affect DPS at all, Police Commis
sioner Floyd Prozanski said.
The Department of Public Safety,
as part of the University, is a state
agency, and therefore could block the
city from implementing a rule against
it, Prozanski said.
As an alternative, the city could
push for an exemption from the state
rule protecting DPS, or the city and the
University could work out a voluntary
agreement on uniforms, he said.
W7////////////Z///////ZOT?
University Vice President for Admin
istration Dan Williams said :n an e
mail that Eugene’s chiet of police told
him earlier in the week that “the com
mission’s interest was focused primari
ly on local security service personnel,
and not the University DPS staff.”
Williams didn’t want “to speculate
about what, if anything, (they) might
do to accommodate the ordinance,”
unless the University receives a spe
cific request from the city, he said.
The uniform issue has been in
discussion since last year. In a past
interview with the Emerald, DPS In
terim Director Tom Hicks said he
was concerned about the recom
mendation and its potential costs.
He estimated replacing the depart
ment’s roughly 18 uniforms and in
forming the public about them
would cost $8,000 to $10,000.
The department’s uniforms have
shoulder patches and badges that
identify their wearers as University
public safety officers and patrol jack
ets that, with a combination of light
and dark blues, also differentiate
them from EPD attire. DPS uniforms
have the “LAPD blue” color, and are
“virtually identical” to other Oregon
University System public safety de
partment uniforms, Hicks said.
No existing security agencies other
than DPS have uniforms that could
be seen as similar to the EPD’s,
Brown said. The ordinance would be
proactive in multiple ways, including
helping restrict uniforms purchased
by new security agencies, an increas
ing presence in the growing city of
Eugene, he said.
“At least it’s a good faith effort on
the part of the city that they recognize
the problem and are trying to make a
distinction so there’s no confusion in
the community,” Brown said. “DPS
has the option of going along with it.”
karahansen@ daily emerald, com
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