Although you might not know it from watching the GOP debates, the economy is the number one issue for voters in 2012. A pair of articles today looks at how this issue is playing across the country.

Bloomberg analyzes the recovery in the Midwest, and how that will affect President Obama’s chances there:

The turnaround may shape this year’s race for the White House as President Barack Obama seeks to reverse Republican gains in the Midwest. The title of his State of the Union address, “An America Built to Last,” evoked a theme of manufacturing’s revival meant to resonate on the campaign trail.

The economies of Michigan, Indiana, Ohio and Pennsylvania -- all states Obama won in 2008 -- have improved faster than that of the U.S. since the recession’s depth in April 2009, according to the Philadelphia Federal Reserve. Michigan is expected to lead all 50 states during the next six months, the Fed data show.

“We’re going back to a region we abandoned a long time ago to get energy again from rocks that were already drilled a thousand times,” said Clay Williams, chief financial officer for Houston-based National Oilwell Varco Inc. (NOV), which started in Oil City, Pennsylvania, in 1862. “We’re going back to our roots.”

Meanwhile, USA Today wants to know if the Auto Rescue will be an asset or liability for Obama and Romney:

The president's campaign views the auto storyline as a potent argument against Romney — who, even though he is the son of a Detroit auto executive, opposed the bailout. As the industry was collapsing in the fall of 2008, the former Massachusetts governor predicted in a New York Times op-ed that if the companies received a federal bailout, "you can kiss the American automotive industry goodbye." Romney said the companies should have undergone a "managed bankruptcy" that would have avoided a government bailout.
…
Three years later, Obama is trying to turn the tough decision into a political advantage in Ohio and Michigan, which Obama carried in 2008 and where unemployment has fallen of late. During last week's State of the Union address, Obama said the auto industry had hired tens of thousands of workers, and he predicted the Detroit turnaround could take root elsewhere.

As Mitt Romney pulls to the head of the GOP pack, it looks increasingly likely that he will be the nominee to take on President Obama. This sets up a race between two rather similar candidates. As Richard Stevenson at the New York Times points out:

Both are Harvard-educated millionaires. Both have been criticized as elitist and technocratic. Both have struggled to handle the populist anger coursing through politics.

In an election climate largely defined by the anxieties of the middle class, working people are now more likely than not to face a choice in November between two candidates who sometimes seem to have trouble relating to them. One is President Obama, who once characterized them as “bitter” people who “cling to guns or religion.” The other is Mitt Romney, currently defending himself against allegations from within his own party that he is a “vulture” capitalist and who in the last week has suggested that he takes pleasure in firing those who fail to provide good service and that politics might best be practiced by those who have paid off their mortgages.

Stevenson also notes that while Romney’s rhetoric on China is drawing him some support, both candidates are struggling to connect with the masses of disaffected blue-collar workers who feel they have been left behind by the last three decades:

Mr. Romney’s emphasis on getting tough with China is winning him attention from workers, and former workers, in industries turned upside down by global competition.

But they face substantial challenges based on the perception that they are out of touch with the values and needs of the kinds of voters who have been most affected by economic and cultural upheaval.
For most of the past decade, blue-collar, white voters have been overwhelmingly in the Republican column. Mr. Obama did much better among them in 2008 than the previous two Democratic presidential candidates had done. But in the 2010 midterm elections, they flocked back to the Republicans.

President Obama has named Commerce Secretary John Bryson and Gene Sperling, director of the National Economic Council to lead the White House’s Office of Manufacturing Policy. As The Hill reports:

The Office of Manufacturing Policy will coordinate efforts across a host of government agencies, including the Small Business Administration and the Transportation Department, among others.

According to Monday’s administration release, Karen Mills, the SBA administrator, will take charge of the attempts to increase small manufacturers’ access to capital.

The release also said that the free trade agreements that passed with bipartisan support this year – with South Korea, Colombia and Panama – would help expand the manufacturing sector.

We’re glad to see that this administration is taking some action on this issue, but this is a small step.  There is still much to be done.

President Obama took his jobs pitch to Scranton, PA yesterday. This former stronghold of blue-collar jobs has been feeling the pinch of the great recession, and people there want to see improvement. During his speech, Obama sounded fired up:

“We’re fighting to make things right again,” he told about two thousand people packed into the bunting-draped gym at Scranton High School. “We’re fighting to make sure that if you are working hard and you are carrying out your responsibilities and you’re looking out for your family, that you can live a good, solid, middle-class life.”

Polls have consistently showed that the economy is the most important issue for voters heading into the 2012 election. President Obama will  need to show how his policies are fixing the economy to help his re-election chances.

Mitt Romney has been featured on Job Search and our blog in the past for his strong stance against China’s currency manipulation. However, as NPR notes, we heard similar rhetoric from then-Senator Barack Obama in 2008. As we all know, those promises were followed by three years of complete and total inaction. China has not been named a currency manipulator, and they continue to refuse to let the yuan float.

Here’s what Romney has said about China:

We can't just sit back and let China run all over us. People say, “Well, you'll start a trade war.” There's one going on right now, folks. They're stealing our jobs. And we're going to stand up to China.

Compared to what Obama said during the 2008 campaign:

What we need to do is to just be better bargainers and say, “Look, here's the bottom line: You guys keep on manipulating your currency; we are going to start shutting off access to some of our markets,”

The weak economy threatens to undermine the President’s re-election chances.

President Obama is in a tough spot. Even though a recent Quinnipiac University poll shows him beating all potential challengers in Ohio, the same poll shows 51% of Ohio voters disapproving of his job performance and 49% saying that he does not deserve re-election.

Voters are understandably concerned about the economy, and they haven’t seen much coming from Washington that gives them faith. People want their elected leaders to fight for jobs. The economy isn’t moving fast enough, too many people are unemployed, and Washington isn’t doing anything to fix this.

Stepping up his efforts to sell his jobs bill to the American People, President Obama visited North Carolina where he visited a WestStar Precision Factory that makes high-tech, high-precision machines for commercial, industrial, and other related manufacturing. After touring the factory, the President gave a speech where he touted the benefits of the American Jobs Act to North Carolina, including tax relief to 170,000 small businesses and funding to prevent the layoffs of 13,000 teachers and firefighters.

However, Republicans were quick to note that WestStar Precision also operates a factory in Costa Rica and accused the president of supporting a company that exports jobs.

Washington is finally starting to focus on ways to create jobs, but the question remains whether the recent obsession with deficits will continue to stand in the way of constructive bipartisan dialogue. Last week before a joint-session of Congress, President Obama outlined the basics of his $447 billion American Jobs Act. Meanwhile, the so-called “super committee” is already at work looking for ways to reduce the deficit while hopefully stimulating economic growth with targeted tax incentives for hiring, investments in infrastructure, and other actions.

American voters spoke clearly over the summer months, pleading with their members of Congress to place more emphasis on job creation and to stop bickering about budget deficits. In fact, according to recent AAM polling, two-thirds of voters would rather see Congress creating jobs. Here’s a look at some items that have been discussed in recent days that would potentially benefit American manufacturing companies and their workers. As you will see, many of these items fared well among likely voters.

Infrastructure Investment. The President has proposed immediate investments in infrastructure and a National Infrastructure Bank to help modernize our crumbling roads, rail, airports, locks and dams, and other infrastructure. Congress should immediately enact a robust, multi-year reauthorization for transportation infrastructure projects and advance other creative ways to leverage private sector investment through an infrastructure bank. The President and Congress should include language to ensure that U.S.-made goods are used to the fullest extent possible when tax dollars are being used to build infrastructure. Adding a Buy America preference to all infrastructure investment creates more jobs – 33% more according to researchers at the University of Massachusetts in 2009. It makes no sense to spend billions of dollars only to see jobs created abroad.
•    89% support investing “more in rebuilding and repairing bridges, roads, and other basic infrastructure.”
•    90% support Buy American policies “to ensure that taxpayer funded government projects use only U.S.-made goods and supplies wherever possible.”

Tax Incentives for Investment. The President has proposed extending a tax provision through 2012 that allows companies of all sizes to immediately deduct the cost of new investments in plant and equipment. In June, the New York Times reported that “businesses’ spending on employees has grown 2 percent as equipment and software spending has swelled 26 percent” since the start of the recession. This leads us to ask whether there improvements to be made to ensure that the benefit is shared by workers.
•    90% support tax incentives for companies that “invest in new equipment and plants for manufacturing.”

The package will soon be sent to Congress where modifications will likely be made. We have a few suggestions – as outlined in a recent piece by Alliance for American Manufacturing (AAM) executive director Scott Paul – that would help to rebalance our economy and provide a level playing field for American workers.

Tax Reform. Reshape the tax code in a revenue neutral way to provide incentives for job creation and inward investment. R&D tax credits should help firms that not only innovate in America but also make their products here. Lower tax rates for manufacturing activity in America and eliminate tax shelters for hedge funds or financial transactions that have no real value.
•    94% support a tax benefit for companies that conduct R&D in the U.S. and make their new products here.

Skills/Training. Shift some education investment to rebuilding our vocational and technical skills program, which would address looming shortages in the manufacturing sector.
•    91% support increasing investment in “retraining and education programs to ensure workers gain the tools they need to compete in modern, high-tech factories – up 4% from 2010.

Trade Enforcement. Refocus the trade agenda by giving American businesses new tools to counter China's currency manipulation, industrial subsidies, intellectual property theft and barriers to market access.
•    95% favor keeping “America’s trade laws strong and strictly enforced to provide a level playing field for our workers and businesses.”
•    59% say we need to “get tough with China and use every possible means to stop their unfair trade practices…” – only 34% say we need to “be careful…because they own such a significant portion of our debt.”
•    86% say we should penalize nations like China that manipulate exchange rates and implement trade barriers to gain an unfair trade advantage.

President Obama is scheduled to deliver a major address after Labor Day on new initiatives for job creation in the U.S.

There's no need to wait until September, though, to learn what the President and Congress can do to create new jobs.  The Alliance for American Manufacturing's (AAM) executive director Scott Paul has published an op-ed in The Hill listing key steps that are needed right now to jumpstart the nation's industrial sector and generate new jobs.

Specifically, President Obama can take steps that have little or no cost for the U.S. treasury, including:

•  Expedite small business loans through the Small Business Administration and Treasury Department to help firms expand, retool and hire.

•  Convene a multilateral meeting to address global imbalances and in particular Chinese mercantilism. If China doesn't agree to participate, designate it a currency manipulator. (China ships fully one-third of its exports to the U.S. and finances less than 10 percent of our public debt, so we have more leverage than some might suggest.)

•  On the heels of the landmark agreement with automakers on fuel economy standards, secure an additional agreement from all foreign and domestic car companies to increase their levels of domestic content by at least 10 percent over the next three years.

•  Direct the Department of Defense to leverage existing procurement to contractors that commit to increasing their domestic content of our military equipment, technology and supplies.

•  Approve additional applications for renewable and traditional energy projects, contingent on the use of American materials in construction.

•  Kick any CEO off of federal advisory boards or jobs councils who has: (1) not created net new American jobs over the past five years, or (2) is expanding the company's foreign workforce at a faster rate than its domestic workforce. Replace them with CEOs who are committed to investing in America. Shame is a good motivator.

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