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Airbus contract: America’s job growth plan for France

Published Tuesday, January 26, 2010 7:00 am

Job numbers are still looking bad. Slowing the rate of unemployment may be relatively welcome news, but it is not the same as creating jobs.

And poll numbers show that Americans are more concerned with job growth than any other issue, Washington needs to be focused like a laser beam on how actually to create jobs. Unfortunately, there are troubling signs that Congress and the Obama administration are not treating the jobs issue with the seriousness and clarity of purpose that the country deserves.

Estimates are that only 20 percent of the stimulus money has been spent, even though many in Washington are considering a “second stimulus.” This betrays a lack of focus, competence, and economic understanding when it comes to job creation. In trying to appear as if they are doing something (instead of actually doing it), many in Washington seem more worried about protecting their own jobs than creating jobs for the millions of Americans who looking for work.

President Obama’s plan to tax banks is yet another example of a policy that drains capital from the economy that can no longer be used to add jobs.

Another sign that Washington is not serious about American jobs is their continued appeasement of a French company—Airbus Industries—which is seeking a $40 billion contract to build the U.S. Air Force’s new fleet of airborne refueling tankers. The tanker contract has been through fits and starts. But the latest developments show a Washington, D.C., establishment that is increasingly out of touch with the people they have been hired to govern.

The World Trade Organization has ruled that Airbus has taken billions of dollars in illegal trade subsidies from European governments, whose national policy has been to artificially place Airbus in a one-up competitive posture over its American rival Boeing. Now, Airbus is using those illegal subsidies to challenge Boeing in its home country, threatening to take American jobs and American tax dollars back home to France.

Back in Europe, Airbus is revealing just what kind of a business partner it can be when it comes to defense contracts. Airbus’ promised delivery of cargo planes to European military services have fallen behind schedule and have gone way over budget. Airbus has responded by threatening to cancel the program if those European governments don’t pay Airbus more money.

The German newspaper Die Welt reports: “Airbus wants about 5.3 billion euros ($7.6 billion) more than the 20 billion euros agreed on in 2003 in order to deliver 180 of the [Airbus A400M] military transports.”

If America decides to have the French company build our new fleet of refueling tankers, will we soon find ourselves in the same bind? Will our elected representatives in Washington give a $40 billion military contract to France, sacrificing the American industrial base and high-skilled jobs, only to end up with an ultimatum from Airbus that if we really want them to deliver on the tankers they promised, we will have to pay them billions more?

Trying to create jobs with taxpayer dollars is not everyone’s cup of tea, but the tanker budget is part of military spending designed to keep us all safe. As it is still our money that is being spent, at least Washington should direct it to American companies and American jobs—is there even one taxpayer in the U.S. who rather send his money to France?

Economically, militarily and morally—giving Airbus the tanker contract is a bad idea on all fronts.

Kerri Houston Toloczko is Senior Vice President for Policy at the Institute for Liberty.

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