Telling Jimmy About Jobs

By Marshall Loeb

It has taken a long time, but at last Jimmy Carter is doing a lot of talking with businessmen. Though he created a million-dollar agribusiness, he is a rural populist, and so he has been suspicious of big interests, including corporations. In just the past several months, however, the President has come to believe that many business chiefs are much like himself--up from the bottom, and not without compassion--and that they may have some provocative ideas about his No, 1 domestic problem: the economy.

So the President holds many unpublicized conversations with such fellows as Du Pont's Irving Shapiro, General Motors' Thomas Murphy and A T &T's John deButts. Very often, he seeks the advice of a tall, spare British immigrant who is emerging as one of the three or four most influential spokesmen of American business, General Electric Chairman Reginald Jones.

Everybody, including the President, calls him Reg, (At General Electric they say the name is pronounced with a hard g, as in God, not a soft g, as in Jesus.) In those private phone calls and White House meetings with Jimmy Carter, Reg Jones unfurls his ideas about taxation, inflation and creating jobs in America.

The U.S. certainly has an unemployment problem, says Jones, but it is very narrow, specific and limited. Although companies cannot find the skilled workers they need, there are not nearly enough jobs for the untrained people, particularly young blacks and Hispanics. The problem is only transitory, though, says Jones. Because of the baby boom two decades ago, the 16-to-19 age group now makes up 10% of the U.S. population.

By the mid-1980s, this job-seeking cohort will be down to 7.5%, and unemployment will be much less severe. Therefore, Jones argues, "we shouldn't put in place a number of permanent job-creating programs."

What we should do, he says, is enact ambitious but limited ones. Jones asks fellow businessmen to support the CETA (for Comprehensive Employment and Training Act) programs, which subsidize companies to hire and train the unskilled young. He applauds Carter's call for $400 million in the '79 budget to expand that work.

During World War II, the Government spurred construction of defense plants by offering "certificates of necessity," which allowed companies to deduct the costs from their taxes in only five years. Now, says Jones, the Government should permit fast write-offs for the plants that companies build in pockets of youth and minority unemployment.

Jones says that one of his favorite salesmen is AFL-CIO President George Meany, and the old plumber has allied with the GE boss on many issues. Once when Jones congratulated Meany for selling an increase in the investment tax credit on Capitol Hill, Meany said: "Hell, the trouble with you business guys is that you talk about 'capital formation.' What you should be talking about is 'job formation' because those are buzz words to Congressmen."

In his talks with Carter, Jones uses the right buzz words. If businessmen are going to risk money to create jobs, he says, they have to earn better than the current 4% real return on investment, which is way down from the almost 10% of the mid-1960s.

Business could also expand employment, Jones believes, if the U.S. were not the most litigious society in history, if small groups of interveners could not so easily block plant construction and expansion. "There is something to the old tale that when there is one lawyer in town, he starves, but when there are two, they both drive Cadillacs."

Reg Jones recalls the story that a century ago when GE Founder Thomas Edison was trying to introduce electricity in New York City, a band of protesters gathered in Central Park and every day they electrocuted a dog. They were trying to show that electricity is dangerous. What if, Jones muses, that special interest group had slowed the growth of electricity? We wouldn't be burning candles today, but we certainly would not be as advanced as we are--and we would have a lot fewer jobs.

This file is automatically generated by a robot program, so viewer discretion is required.