The Obama administration, engaged in an urgent campaign to encourage U.S. companies to create more jobs, issued a report Monday showing a sharp increase in direct foreign investment in the United States in 2010.
Investment in the United States by foreign-based companies increased 49 percent last year, recovering from the worst of the credit crisis in 2009, according to a report by the White House Council of Economic Advisers.
President Obama said the injection of foreign capital “is an important opportunity to accelerate our economic recovery.”
The president has been holding a series of public events, including one set for Friday in Pittsburgh, to encourage U.S.-based firms to hire more workers and to convince voters it’s his top priority. Payrolls grew at the slowest pace in eight months in May, and the national unemployment rate rose to 9.1 percent.
At a meeting with the National Association of Manufacturers last week, White House Chief of Staff Bill Daley reminded frustrated U.S. corporate leaders of steps the administration has taken to create a more business-friendly climate. He cited ongoing efforts to streamline regulations and expand research and development tax credits.
“We rely on you to spread the word so that companies can take advantage of those opportunities,” Mr. Daley said.
Still, companies are sitting on an estimated $2 trillion in capital, and some are making record profits while remaining reluctant to hire or expand. Corporate leaders often cite an uncertain and hostile regulatory environment.
John Berlau, director of the Competitive Enterprise Institute’s Center for Investors and Entrepreneurs, said foreign investors “do not carry as much of the weight of U.S. taxes and regulations of American firms.”
“It’s telling that foreign firms hire mostly in right-to-work states to avoid the edicts of America’s powerful union bosses,” Mr. Berlau said. He also said foreign companies don’t have to comply with costly mandates of Sarbanes-Oxley, the sweeping corporate accounting reforms adopted in 2002 in the wake of the Enron and WorldCom scandals, among others.
“The combined burdens of these government mandates leave American firms in many cases with less freedom to create jobs in their home country than foreign firms have,” Mr. Berlau said.
Austan Goolsbee, outgoing chairman of the White House Council of Economic Advisers, said the report shows that the U.S. “remains the No. 1 destination” for foreign investment in the world.