What it will take to pull the U.S. out of another Great Recession?

Today’s U.S. job numbers coupled with the latest ISM manufacturing report would seem to suggest the American economy is as “flat as a pancake."  We appear to be on the precipice of another Great Recession or Contraction, if we aren’t there already.  What can we do “turn the ship around”?  This is what I suggest.

Political Collaboration and Leadership

We are currently witnessing the battle of the “job creation plans”.  Every Republican candidate for President and even some who are not running are trying to outsmart each other with their competing plans.  President Obama is going to present his job creation plan later this week.  We are going to be bombarded with rhetoric and op-ed pieces all debating the strengths and weaknesses of each plan.  Then these plans have to be captured in laws and run through the House and Senate.  This could take forever before being signed into law by the President.

Isn’t this the opportunity to break the political impasse in Washington by having the leaders of the two parties and their staffs work together to create a unified plan that is going to truly help get Americans back to work?  Isn’t this what the American people want to see, particularly after the debt crisis fiasco of a few weeks ago?  C’mon leaders, show us that you can lead by breaking out of the current paradigm and collectively making something powerful happen quickly.

Business Leadership and Consumer Confidence

The stimulus programs put in place over the past couple of years have been criticized for being too small and unfocused.  While some would argue that if we had not had these programs, we would be in even more dire straits, it is hard to find anyone who can pinpoint the effectiveness of all the money that was spent.  With interest rates so low, there is not much that can be done in this area to stimulate growth.  The government cannot create the number and types of quality jobs the economy needs to revitalize itself.

That leaves it up to business leaders, all business leaders.  The various plans we will be hearing about will likely all contain tax breaks or incentives for new job creation.  These incentives will only work if businesses are able to create more products and services that can be sold at levels that result in a profit.  They will only work if consumers buy these products.  The only way to turn around the moribund economy is to create an atmosphere of confidence where we all feel that America is on the way back, where people are willing to spend money again.  The implication is that many business leaders must be willing to take some risks, to spend some of the money they have been hoarding for the past couple of years on new capital equipment and new jobs.

Make an Immediate Dent in the Unemployment Numbers

There are millions of unemployed Americans who are struggling to find a job.  The longer these people remain unemployed, the worse things are going to get.  As employers scrutinize the resumes of these individuals who have been unemployed for extended periods of time, the more unlikely it is for them to be rehired. Having been an employer for many years, I know what it is like to look at an individual who has been unemployed for a year or more and wonder why so many other prospective employers have passed on this person.

Creating a well though-out job creation plan for those people who are now becoming chronically unemployed has to be a priority.  Everyone will start feeling more confident as jobs are created and as the unemployment number dips below 9 percent and then 8.5 and then even further. 

To sum up, America needs a well-conceived job creation plan that is embraced by political leaders of both parties.  The plan, with the strong endorsement of both parties, must contain some metrics in terms of job creation that demonstrate that America is putting its citizens back to work.  The plan must tackle the block of unemployed people who are struggling to find work.  It must instill a sense of direction, confidence and hope.  The option of drifting into another recession should be a strong enough deterrent for political and business leaders to come on board quickly.