Leo Hindery is the kind of CEO you dream about in an America filled with justice. He is an old time populist who cares for the working man, the poor and those yearning to breath free. You would be hard put to find a corporate CEO who has fought harder for economic justice and freedom. Leo and his wife Patti have been in the forefront of the battle for LGBT rights. For the last several years he has been a champion of economic equality and opportunity for the poor and the average working person in America.

This is a man who is currently Managing Partner of InterMedia Partners. He has served as CEO for such companies as Telecommunications, Inc (TCI), ATT Broadband and YES Network (Yankees Entertainment Sports Network). He is also an author of books on economic justice and a man who is often called upon as a CEO to speak on behalf of the powerless.

Recently he was asked to testify at the Senate Democratic Policy Committee and many bloggers have found the testimony so compelling we are reprinting it here in full. Considering the recent unemployment statistics, President Obama would be well served to read the following.

Testimony of Leo Hindery
November 5, 2009
Senate Democratic Policy Committee

So let me, if I might, speak to:

-How many jobs we need, which I believe is two and a half times the number the administration is publicly using;
-How we might best create them; and
-How we might best pay for what we need to do.

Despite the fact that as of last week the recession is officially over, a number of us believe that using only GDP growth in the third quarter as the proof of this offers an extremely “false-positive” reading of the economy. In fact, I believe that another million or so jobs are likely to be lost by the middle of 2010, and that the U.S. economy is entering into a “new normal” period, which means relatively high effective unemployment into the long term and an equally long period of only around 2% of annual growth versus 3.5% or so normally.

It is important we all remember that the Bureau of Labor Statistics, in its monthly public announcements, excludes changes in employment among the nation’s 11 million farm and self-employed workers, even though they comprise 7% of the workforce, and that it does not take into account the workers who are part-time-of-necessity [9.2mm], marginally attached [2.2mm], or have left the labor force out of frustration [3.4mm].

Right now, for the first time ever, there are nearly as many uncounted unemployed workers – 14.8 million – as there are officially counted ones – 15.1 million. This means that:

-The effective unemployment rate is 19% not 10%;
-The number of effectively unemployed workers has increased by more than 13 million since the recession began not by 8 million; and, most germane to today’s discussion,
-We are short about 22 million jobs not the “nine million” that the White House officially announced two weeks ago.

Even the average fulltime worker is now working only 33 hours a week, which is a record low number that suggests effective underemployment even among existing fulltime workers of around 17%.

America is deep in the midst of a jobless recovery, which in numbers is the largest ever and in likely duration the longest ever. And we need to start thinking of the recession as being L-shaped rather than U or V-shaped. In response, I believe we need four things, and immediately:

First, we need an all-of-government manufacturing policy that has as its formally stated objective doubling the size of the manufacturing sector and the percentage of GDP it represents, which would add 12 million or so workers directly to the sector and up to another 30 million associated workers.

Second, we need “buy domestic” requirements related to almost all federal procurement. The U.S. is the only nation among the G-20 and China without such a program – China in fact just reconfirmed in mid May a 100% government-wide program – yet no single economic stimulus initiative would do more to resuscitate U.S. employment and reduce our trade deficit. We should call this requirement the “U.S. Domestic Investment Act” or something similar, which is what other nations generally call their programs.

Third, we need a 10-year program of significant public investment to upgrade and rebuild our nation’s infrastructure that would include: (1) a new National Infrastructure Bank; (2) incentives for private funding of public infrastructure, which represents a huge opportunity; (3) Investment Tax Credits for energy conservation-related building retrofits; and (4) a multi-year, $500 billion green transportation program funded through an increase in gasoline taxes. Provided it has reasonable associated buy-domestic requirements, each one billion dollars invested in public infrastructure generates on the order of 40,000 permanent new American jobs.

And fourth, we need trade agreements that have meaningful labor and environmental standards, forbid illegal subsidies and currency manipulation, and have enforcement “teeth”. With regard to those “teeth”, a perfect place to start is the “Trade Enforcement Priorities Act” just introduced by Senators Brown, Stabenow, Levin, Feingold and Specter, which would revise the old “Super 301” trade enforcement process.

And right now we especially need a fundamental re-working of our trade relationship with China, including upfront changes in China’s outrageous currency policy which has left it with $2.1 trillion of foreign assets, mostly in dollars, and fueled its recovery at the expense of ours. Then in the next year’s Congress, we need to enact major corporate tax reform to incent corporations to create jobs in the U.S., which should include (1) reducing corporate income taxes and moving to a value-added-tax or VAT and (2) a 10% Investment Tax Credits for renovating and modernizing manufacturing facilities and their associated equipment and processes.

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Even though it seems a political impossibility to label anything right now as “second stimulus”, we can’t run away from the major fiscal efforts needed in order to create the 22 million or so high-quality jobs that are missing.

Yet if intelligently conceived and funded, these major new-jobs efforts will not damage the economy as some alarmists say, they will be at least deficit neutral over the next decade, and, most likely, they will even be substantially deficit reducing.

I recommend that we start with a newly enacted financial transactions tax to take effect as soon as possible. In size, this FTT should be on the order of one-tenth to one-quarter of one percent of the value of all financial transactions – stocks, bonds, derivatives, futures, etc. – and it should be levied on all corporate, partnership and very-high-income individual buyers and sellers of securities. An FTT is only one of the four revenue initiatives that are required, however. It needs to be combined with:

(1) Finally ending those “tax breaks for companies that ship jobs overseas”, as was promised during the 2008 Campaign, which would raise at least $200 billion over 8 years;

(2) Classifying and taxing carried interest as ordinary income at a 35% rate rather than as a capital gain at a 15% rate, which would generate around $12 billion per year; and

(3) Raising the top tax rate on long-term capital gains back to the 28% rate signed into law by President Reagan, which would raise about $25 billion per year.

In quickly closing, let me say that while there is an increasing amount of talk regarding these issues, for example at the November 2 Economic Advisory meeting with the President, there seems to be an operational urgency lacking in the Executive given other White House priorities. So, it really has to be Congress which gets the ball rolling.

(In the interest of full disclosure, Mr. and Mrs. Hindery are dear friends of mine and I have worked with Leo for over ten years)