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The Boston Globe

Opinion

David D’Alessandro

Make ’em hire

Obama needs to strong-arm federal contractors

Wesley Bedrosian for The Boston Globe

FRANKLIN DELANO Roosevelt’s answer to 12.5 million people unemployed at the height of the Great Depression was the New Deal. Replete with bold, creative, and practical ideas, the New Deal marked the beginning of people getting back to work and America recovering.

Barack Obama’s answer to 14 million unemployed in August 2011 is the American Jobs Act, better referred to as the “Nothing Bold, Creative, or Practical Act.’’

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Our president is hard at work cajoling Congress into accepting the Nothing Bold Act, which is just a series of tax breaks and business incentives married with increased taxes for individuals and some companies.

The president is mesmerized by policy wonks, academic economists, and Washington think tanks. He parrots their old, tired ideas. While he has a council of business advisers, he has apparently chosen not to offend them by suggesting more immediate and practical ideas that force large businesses to begin hiring immediately.

As a businessperson, I am baffled by Obama’s inability to take American large corporations and its leaders to task for job preservation and job creation. While he huffs and puffs about corporate jets, oil industry taxes, and carried interest abuses, he fails to use immediate weapons at his disposal. Yes, corporate America may respond marginally to tax incentives, but what it will really respond to is practical and real presidential leadership.

Here’s one bold, creative, and practical idea.

The US government is one of the largest purchasers of goods and services in the world. It buys computers, jets, pharmaceutical supplies, ships, paper, food, water, fertilizer . . . you name it, our tax dollars buy it.

Obama is CEO of this buying machine. There are already hundreds of requirements federal contractors have to abide by in order to supply the government. Why not require them to restore some of the employment levels of past years, export fewer jobs overseas, and rehire some of the millions of laid-off workers?

Behemoth federal contractors like General Electric , which has paid virtually no US federal tax in years, yet has already earned 2011 profits exceeding $7 billion, can surely afford to contribute several thousand jobs in addition to CEO Jeffrey Immelt’s time advising the president on business-related issues.

Other federal contract giants, including United Technologies , IBM , Exxon Mobil , and Boeing , to name a few - participate in government contracts worth billions and all of them already report multibillion-dollar 2011 earnings. And they just represent the tip of the iceberg. There are thousands of corporation contracts.

If these larger corporations simply kept more jobs in the United States, added some of the jobs they have stripped away and focused on helping jump-start our economy, unemployment could be well below 8 percent by next year’s presidential election.

Wall Street and some in Congress will howl at the thought of the president strong-arming these suppliers. They will cry that it is socialism or some form of heinous interference. The fact is we need a little interference here. There is something wrong when much of corporate America is raking in gargantuan profits, wallowing in government contracts, and reducing US employment during the deepest economic crisis in decades.

And, of course, expect the classic corporate defense of “we have to do what is best in the interest of our shareholders.’’ My answer to that is simple: Your shareholders include the citizens of the United States who pay the taxes to grant these lucrative contracts. If you don’t want to employ more people and take a little less profit, we will take our business elsewhere.

The New Deal contained many public works projects to get people earning again. We cannot afford such projects, but we don’t need them for this purpose. Modern corporate America and our buying power dwarf the potential public works market.

The president needs to offer a little less carrot and a little more stick to get people back to work, or it is likely he and all of his theorists are going to be joining the unemployed.

David D’Alessandro is former CEO of John Hancock Financial Services.

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