Today, the White House held a forum on “Insourcing American Jobs” to gauge how companies are choosing to “insource” jobs and invest in the United States. It’s a timely event: With more than 23 million Americans either unemployed, working part time, or who have given up looking for work, it’s vital that we ask how we can foster a business climate that will encourage companies to invest and hire here at home.

But international investment is a two-way street. We should applaud companies that show America is still very much the “land of opportunity.” We need to identify the policies that help draw job-creating investments to the United States. But we also need to recognize the broader benefits generated by international investment — including foreign investment in the United States as well as U.S. investment abroad.

In fact, foreign companies employ more than 5.3 million Americans and support an annual payroll of more than $400 billion, according to the U.S. Department of Commerce. These foreign-headquartered companies purchase more than $1.8 trillion in inputs from local suppliers and small businesses and account for more than one-fifth of all U.S. merchandise exports.

While one country’s inbound investment is another country’s outbound investment, this is more than a zero-sum game. In the view of the Chamber, job creation is supported on both sides of the investment equation.

U.S. firms’ investments abroad bring real benefits to Americans, including on the jobs front. Studies have found that U.S. companies that invest abroad tend to create more jobs in the United States and pay higher wages than companies focused solely on the domestic market. Indeed, the U.S. Department of Commerce reports that U.S. multinational corporations added 675,000 U.S. jobs during the five years ending in 2009 — a period in which the U.S. economy lost more than three million jobs.

U.S. multinationals have continued to concentrate their high-wage, high-skill jobs in the United States, according to the same report. The roughly $5 trillion in annual revenue U.S. multinationals earn through their foreign operations help fund their research and development activities, 84% of which continue to be performed in the United States, according to the U.S. Department of Commerce.

Polls show many Americans believe “offshoring” is a major driver of job loss, but the facts show the movement of jobs to foreign locations accounts for a tiny fraction of layoffs. For example, the Bureau of Labor Statistics reported the separation of 184,493 workers from their jobs in the third quarter of 2011 in so-called “mass layoffs,” but only 110 of these layoffs resulted from movement of work to an overseas location.

Some charge that international investment is really about substituting foreign production for domestic production and thus replacing U.S. workers with low-wage foreign labor. In fact, just 8.9% of the production of foreign affiliates of U.S. multinationals is sold in the U.S. market, according to data compiled by the U.S. Department of Commerce. In other words, more than 90% of their production is sold abroad.

Given America’s need to create jobs, rebuild our infrastructure, and remain the world’s pre-eminent innovation hub, we must do everything we can to make the United States the most attractive place to do business.  We must foster a business climate that will attract job-creating investments while guaranteeing U.S. firms the freedom to invest abroad when it makes sense.

To remain a leader in the global economy, the United States must lead on both sides of the investment equation. American companies must be a global player, which in turn requires them to invest abroad, just as leading foreign companies have recognized the need to invest in the United States. Only by recognizing that international investment is a two-way street can we seize its full benefits.

Hostess, the company behind the Twinkie, sadly, filed for bankruptcy, but The Atlantic's Derek Thompson encapsulates the bigger meaning of the sponge cake treat. It's a story of ingenuity and creativity in free enterprise to make life a little sweeter [pun intended]:

The food processing industry in the U.S. is responsible for some $400 billion of sales each year, but their benefit for hungry Americans goes beyond their manufactured tastiness. By turning food into a manufacturing industry, companies have been able to hold down the cost of our snacks even as food inflation lurches every quarter. The cheap and indestructible Twinkie is a miracle of science, coordination, and cost-control on the part of Hostess.

Starting as a wholesale bread maker in Kansas City, MO, Hostess became an iconic brand by selling items like Twinkies, Ho-Hos, and Wonder Bread. Hostess is one example of how the food industry, not only keeps us fed and employs millions but gives us treats like the Twinkie.

Image by Larry D. Moore, used under a Creative Commons ShareAlike License.

by Bobby Maldonado

• Just moments after polls closed at 8:00pm in New Hampshire, Mitt Romney was declared the winner.  Romney finished with 39% of the vote.  Paul finished second with 23% and Huntsman placed third with 17%.  The race moves to South Carolina, where, if Romney prevails on January 21, he will be all but unstoppable for the nomination.  Santorum and Gingrich both failed to break through with 9%.  Perry, who all but abandoned the state, finished with less than 1%.  Huntsman, who placed his hopes in New Hampshire, vowed to stay in the race.
   
• The National Retail Federation yesterday sent a letter to President Obama touting the benefits of the private sector when it comes to job creation and urged him to push Congress to move on its priorities.  The letter noted that the retail sector employs twice as many people as health care and four times as many as manufacturing.
   
• Reuters reports that Senators will likely make a decision whether to file a lawsuit to challenge President Obama’s use of recess appointments after they return to Washington on January 23.  Republicans face a difficult decision, because a lawsuit could give Obama more ammunition to paint Republicans as obstructionists and because it is unclear if they have enough of a personal stake to establish legal standing.  A more successful case could come from a business group with at least one member that is the target of a CFPB enforcement action or rulemaking.  Bruce Josten is quoted in Reuters saying, “We haven’t made any decisions about a challenge, but we won’t take options off the table.  Bruce did say that the validity of the appointments “will likely be challenged and settled by the courts.”
   
• European competition officials have recommended blocking the tie-up between Deutsche Börse and NYSE Euronext, the German and U.S. exchange operators, setting in motion what could be weeks of frantic lobbying to salvage the deal.  The exchanges do not plan to offer additional concessions.  The antitrust decision is a serious blow to the chances of being able to complete the deal.
   
• According to an unofficial estimate from the Federal Statistics Office in Germany, Germany’s GDP expanded by 3% last year.  It noted, however, that the growth came mostly in the first half of 2011, and estimated that the economy actually contracted by about 0.25% in the fourth quarter.  Some economists now predict another contraction for Germany in the first three months of 2012, which would meet the usual definition of a recession as two consecutive quarterly declines in output.

Las Vegas understands 95% of world's population lives outside the United States, so they're making it a goal to have 30% of their visitors come from outside the U.S. That's good business sense, because as the Las Vegas Review-Journal points out:

The average international traveler spends about $1,011 per stay and remains in the Las Vegas longer than four days each trip. Compare that with domestic tourists who spend $645 per visit on average and stay about three days.

To reach their mark Vegas has to broaden its sights beyond international guests currently arriving from the United Kingdom, Canada, and Mexico and target tourists from growing economies like China, India, and Brazil.

The story goes on to note that, policy-wise, what can be done to help Vegas is reduce the time and hassle it takes to get visitor visas to tourists as well as work with Brand USA, "the federally mandated organization charged with promoting U.S. travel."

The administration is aware of the visitor visa difficulties. Last month in an exclusive interview with Free Enterprise Magazine, Commerce Secretary John Bryson said 50 additional visa officers would be in China.

Along with that welcome start, the U.S. Travel Association's Ready for Takeoff report has a few recommendations to the government to be more proactive in reducing the visa logjam.

Getting these implemented will help Las Vegas, and other U.S. travel destinations, draw more international tourists.

We are just days into 2012 and already the demands of a frantic election season threaten to draw time, attention, and focus away from our nation’s most pressing priorities. Our country can’t afford 2012 to be a wasted year in Washington. With chronically high unemployment and a mounting deficit, a year of inaction by the administration and Congress would hold severe consequences for our sluggish economy.

The administration has signaled a slim legislative agenda for 2012 so that the president can focus on his reelection. Some members of Congress will quickly settle into campaign mode, often neglecting what they were elected to do. Lawmakers will likely avoid tough votes and put off the hard work of legislating for another year. In short, politicking will take precedence, and policymaking will take a backseat.    

For the sake of our economic recovery, we must reject the conventional wisdom that nothing gets done in an election year. And there’s plenty to do.

Where to start? How about picking up the can Congress kicked down the road with last year’s failed deficit reduction efforts. Though $1.5 trillion in automatic budget cuts will take effect in 2013, our nation’s deficit isn’t going to reduce itself. Unsustainable entitlements will continue to drive us deeper into the hole unless we reform and restructure them. Congress should also tackle comprehensive tax reform this year to lower rates for individuals and corporations and help stabilize the economy and spur growth. If the Bush-era tax cuts expire at the end of 2012, millions of small business owners will be hit with tax hikes.

We should seize the opportunity for energy security by developing our own natural resources and moving forward on key energy infrastructure projects like the stalled Keystone XL pipeline. Doing so would generate government revenue and high-paying jobs. And why not get to work rebuilding and maintaining our nation’s roads, bridges, harbors, and airports? Congress should pass long-term transportation funding bills to modernize our infrastructure and put Americans to work.

The challenges we face require serious and sustained action—not just campaign slogans and candidates’ sound bites.

Most important, it isn’t about the hundreds of lawmakers and candidates who will ask American voters to give them a job on Election Day. It’s about the 20 million Americans we need to put to work this decade. If our current lawmakers stay focused on that goal—and truly work to spur economic growth and job creation—voters might be a little more eager to rehire them. After all, good policy is good politics.

Ben Wildavsky’s excellent column in the Chronicle of Higher Education last week examines China’s decision to cut back on degree programs that don’t bear a student good odds of landing a job through an American prism, wondering whether or not the practice is right for the United States. Ultimately, Wildavsky argues that what’s necessary is for a better flow of information to students, so they more fully understand the ramifications of selecting a major. 

It’s a rather timely suggestion, coinciding with an MSNBC article about a married couple—both public law librarians—who struggle to pay down $150,000 worth of student loan debt on their salary. More importantly, it coincides with the release of the new Georgetown Center on Education and the Workforce report, Hard Times, which concludes that the choice of a college major substantially affects employability and earnings, among many other things. It’s an excellent report and a must read for prospective students, their parents, and policy wonks alike.

Wildavsky is right, of course, that the problem is better solved through transparency. Congress recently passed a law forcing credit card companies to show you exactly what the long term ramifications are for paying down an existing balance using minimum payments. Some counties make restaurants put calorie counts next to their menu options. I see little reason why a similar device couldn’t be used for college students selecting their programs of study. It could include factors such as tuition, fees, and other “real” costs of attending school; the typical salary and lifetime earnings of a person earning a degree in that field of study; the likelihood of actually finding a job with that degree; an estimate of monthly student loan payments; and what your net income would look like after typical housing and other non-discretionary expenses at prevailing local rates. 

In fact, here’s rough view of how it might look. For the example, I used an actual private university in California and cobbled the information below from various websites:

It’s one thing for a student to say that they love psychology and don’t care about the money. It’s another thing altogether when you show them that they’ll be lucky to be eating ramen noodles for the foreseeable future. You could even make it a web-based tool, allowing students to adjust how much student loan debt they’re going to take on, or where they plan on living after college. If we really want a more market-driven approach to guiding students towards in-demand occupations, showing the stark reality of their choices in black-and-white would likely be a good way to do it. If they still want to take the plunge, mazel tov. The choice will still be theirs to make. But in many other situations, they might see the data and take another path. That’s a good result for everyone, and one that takes very little effort or resources to obtain.

Fortunately, correcting this problem doesn’t require draconian, Chinese measures. A lot of information and transparency to students, combined with a little common sense in public policy, should get the job done. Unfortunately, transparency and common sense are commodities in short supply these days.

The U.S Department of Commerce last week delivered to Congress a comprehensive report on The Competitiveness and Innovative Capacity of the United States. The report was mandated as part of the America COMPETES Reauthorization Act of 2010, which was signed into law by President Obama in January last year. The report addresses a diverse range of topics and policy options, including trade policy.

The report reads: “A vibrant and expanding export market is essential for economic growth and for creating new jobs. Ensuring that U.S. businesses have fair and open access to foreign markets is an important component of increasing U.S. exports. This is yet another area where there is a clear role for government to improve the competitiveness of the United States.”

Recent progress has been made on this front, note the approval of the trade pacts with Colombia, Panama, and South Korea last October.  But more needs to be done.

U.S. Chamber small business member Drew Greenblatt is the President of Marlin Steel Wire Products, LLC, in Baltimore. “From a business perspective, the foremost goal of U.S. trade policy should be to tear down those barriers so companies like mine can start exporting to new markets. We want more of that growth. As the president of the firm, I truly understand the importance of international trade and the impact it can have on small business. It’s simple: we want to ship to more countries, grow our client base, and create more jobs. The more we diversify our client base the more stable we will be," Greenblatt says.

One fourth of Marlin Steel Wire Products employees are employed as a direct result of the company’s export business. On Thursday, Marlin Steel will have a ribbon cutting ceremony to unveil its new USA-made Precision Laser. Small companies like Marlin Steel are putting Americans back to work by innovating and exporting products to countries all over the world. Now let’s keep the momentum on trade and global commerce moving forward.

• The U.S. economy gained 200,000 jobs in December, according to Friday’s Labor Department report.  In addition to the stronger jobs numbers, the unemployment rate fell more than expected, sliding to 8.5% in December.
• The Wall Street Journal had an editorial out on Saturday that said, “A year from now, if no policies change, Mr. Obama’s tax bombs will explode at once, with the expiration of the Bush tax rates, the expiration of his payroll tax holiday (assuming it is extended next month to a full year), and the rollout of ObamaCare’s levies.  As the year progresses, we need to see if businesses will expand or hire new workers into that trillion-dollar tax headwind.  If Mr. Obama wants more positive job reports like yesterday’s, he should announce that he is calling the tax hike off.”
• In a Wall Street Journal op-ed, Maurice Greenberg, chairman and CEO of C.V. Starr & Co., is critical of U.S.-China dialogues that resolve nothing and allow for the frictions to hamper development of a better relationship.  He then calls for a new approach and for China and the U.S. to open negotiations for a free trade agreement that could encourage greater coordination in the field of foreign direct investment.
• Merkel and Sarkozy meet today to discuss ways to boost growth in struggling euro zone states and to finalize a deal to increase fiscal coordination within the EU.  They may also discuss a financial transaction tax, known as the “Tobin tax.”  Britain is resisting, fearing it will damage London, a global financial center where much of the tax would be raised.
• In a move likely to infuriate euroskeptics in his own Conservative party, Prime Minister David Cameron has left open the door to Britain giving billions of pounds of new support to the IMF – and indirectly to ailing members of the euro zone.

by Bobby Maldonado

The dangerous federal regulatory deamon popped its ugly head out again in Washington this week when the White House appointed Richard Cordray to head the Consumer Financial Protection Bureau (CFPB) and installed three people to the National Labor Relations Board (NLRB).  The Chamber used its powerful voice in the halls of Congress and in the media to ensure that this overeach didn't go unnoticed.  Regarding the Cordray appointment, Tom Donohue was quoted saying, “This controversial appointment is unprecedented, constitutionally questionable, and puts the authority of the director and the validity of the bureau’s work in legal jeopardy."  Meanwhile, Bruce Josten, executive vice president of Government Affairs, was quoted in reports being critical of the NLRB appointments.  He said, “Today’s steps will simply further poison the well with regard to labor-management issues pending in front of the board and on Capitol Hill.”  This is The Week That Was…

• Following his unprecedented display of executive power in appointing Richard Cordray to head a Consumer Financial Protection Bureau, Fox News quoted Tom Donohue saying that, “This controversial appointment is unprecedented, constitutionally questionable, and puts the authority of the director and the validity of the bureau’s work in legal jeopardy.”  Donohue was also quoted in reports appearing in The Hill, The New York Times, CNN, and POLITICO, among others.  Additionally, National Journal, Los Angeles Times, Bloomberg, and Reuters, quoted David Hirschmann, president and CEO of the Chamber’s Center for Capital Markets Competitiveness.
• President Obama also used constitutionally questionable recess appointments to install three of his picks to the National Labor Relations Board (NLRB).  Bruce Josten, executive vice president of Government Affairs, was quoted in Reuters saying, “Today’s steps will simply further poison the well with regard to labor-management issues pending in front of the board and on Capitol Hill.”  The Wall Street Journal also quoted Josten saying the NLRB’s credibility already has suffered because of “an aggressive agenda favoring unions.”
• The NLRB adopted portions of its contentious union election rule that will reduce litigation on union elections by limiting testimony at regional hearings and consolidating appeals of regional director decisions into one post-election review request.  “This rule has no conceivable purpose but to make it easier for unions to win elections,” said Randy Johnson, the Chamber’s senior vice president for Labor, Immigration, and Employee Benefits, in a statement picked up by The Hill.
• The U.S. Chamber and other business groups sued the NLRB over the employee rights notification rule, maintaining that it violates federal labor and regulatory laws, as well as First Amendment rights.  Randy Johnson was quoted in POLITICO saying, “At a time when the private sector is striving to create desperately needed new jobs, it is disappointing to see that the NLRB is imposing new and unnecessary regulations on employers.”
• The U.S. Chamber Institute for Legal Reform released its Top Ten list of Most Ridiculous Lawsuits of 2011.  ILR President Lisa Rickard’s statement was quoted widely in reports including one in The Orange County Register.  She said, “While these lawsuits vary from the outrageous to the humorous, abusive litigation is hardly a laughing matter.  ILR’s annual poll of ridiculous lawsuits helps to remind us that abusive lawsuits affect real people and real businesses, and can have harmful results to lives, jobs, and even our economic growth.”
• A front page story in USA Today said that despite concerns over recent violence and the American troop withdrawal in Iraq, U.S. investment and other business in the country quadrupled in 2011.  Lionel Johnson, vice president of Middle East and North Africa Affairs, said, “The U.S. has lagged up to this point because of a perception almost more than anything else that it was a dangerous place, an unstable place.”  The Chamber was prominently noted in the report for working to encourage American investment in Iraq.

From the Institute for Legal Reform's FacesofLawsuitAbuse.org, I found this story of a pharmacy being forced to pay $1.4 million because a teenager was permanently injured after overdosing on Xanax stolen by a former pharmacy employee. While what happened to the teen is sad, pinning the blame on the pharmacy is equally so.

Across the country, there are stories of abusive lawsuits hurting businesspeople who worry about being targets and end up making certain business decisions just to avoid frivolous lawsuits.

I hope the teen recuperates as much as is possible, but I also hope we get legal reform to prevent businesses like that pharmacy from being unfairly caught in the lawsuit abuse jetsam.

Have you or do you know someone who has been victimized by lawsuit? FacesofLawsuitAbuse.org wants your story, and also vote in their Most Ridiculous Lawsuit of the Month poll.