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Date: Thu, Dec 10, 2009 at 11:10 AM
Subject: Alexander: Job Creation for Dummies
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*Alexander's Essay – December 10, 2009*
Job Creation for Dummies
"Were we directed from Washington when to sow, and when to reap, we should
soon want bread." --Thomas Jefferson
Barack Obama outlined his Recovery.gov version 2.0 on Tuesday of this week,
saying, "My economic team has been considering a full range of additional
ideas to help accelerate the pace of private sector hiring. We held a jobs
forum at the White House..."
Indeed, Obama held a much-publicized "jobs" confab last week, ostensibly to
obtain ideas about how to create (and save?) more of them. This exercise in
futility was fodder so he could feign having sought advice from some people
who actually create jobs.
However, most of the 135 invitees were from federal, state and local
government, academic institutions, labor unions and not-for-profits. Alas,
he did toss in a few folks from the private sector where job creation
actually occurs. He told them, "I'm confident that people like you ... can
come up with some additional good ideas on how to create jobs."
*Additional* good ideas?
I suspect Obama was suggesting that some of his proposals thus far have been
good ideas. Unfortunately, despite all the jobs Obama claims to have saved
or created with his $787 billion "stimulus" package, unemployment has
increased from 7.6 percent when he took office, to 10 percent.
Setting aside the absurdity of his pet "saved or created" construction, it
seems to me that if he had actually created jobs, unemployment would be
somewhere under 7.6 percent. But Democrat math never ads up. Fact is, there
has been a net loss of at least 3.4 million jobs under the "Obama recovery."
"We're not going to get anything useful out of [this summit]," concluded
Peter Morici, from the University of Maryland's Smith School of Business.
Obama and Treasury Secretary Tim Geithner "really don't know what to do."
What an understatement.
Investor's Business Daily analyzed cabinet posts of administrations over the
last century and determined that prior to Obama, Kennedy and Carter had the
lowest number of appointees from the private sector, about 30 percent in
each administration.
As only 8 percent of Obama's key appointees are from the private sector,
precious few of them have actually created or understand how to create
non-government jobs.
Needless to say, there was widespread skepticism about this jobs summit, so
Obama sent out his senior White House adviser, Valerie Jarrett, to do some
pre-emptive Bush-blaming.
"We inherited an economic meltdown 10 months ago," claimed Jarrett. "[Obama]
moved boldly to get us back on track with a variety of measures."
Oh really? Fact is, then-Senator Obama and his Democrat colleagues went to
great lengths to undermine the U.S.
economy<http://patriotpost.us/alexander/2008/09/26/economics-101-crisis-of-confidence>for
political expedience.
As for critics of Obama's socialist economic philosophy, Jarrett issued this
challenge: "I would say to those critics, we welcome your ideas. We embrace
all good ideas and I think critics should stop saying what won't work and
come forward with what will work."
Well, OK! As the owner of an Internet publishing company, and manager of
several other business ventures, here are some good ideas that will work --
in fact, ideas that have proven to work.
*First:* Let's clear up a misconception: Government does not create jobs
because it does not create wealth. Government is a consumer of wealth, not a
producer.
As my colleague and noted economist Thomas Sowell writes: "What does it take
to create a job? It takes wealth to pay someone who is hired, not to mention
additional wealth to buy the material that person will use. But government
creates no wealth. Ignoring that plain and simple fact enables politicians
to claim to be able to do all sorts of miraculous things that they cannot do
in fact. Without creating wealth, how can they create jobs? By taking wealth
from others, whether through taxation, selling bonds or imposing mandates.
However it is done, transferring wealth is not creating wealth. When
government uses transferred wealth to hire people, it is essentially
transferring jobs from the private sector, not adding to the net number of
jobs in the economy."
As Heritage Foundation's Conn Carroll notes, "every dollar Congress
'injects' into the economy must first be taxed or borrowed out of the
economy."
And, to add insult to injury, government is an extremely inefficient
consumer of wealth, with up to *70 percent* of income-transfer program
(a.k.a., welfare program) budgets going to bureaucratic overhead.
*Second:* Taxes do not create jobs. Taxes eliminate jobs.
Higher income taxes to pay for more government spending and debt, higher
business taxes associated with CO2 production, and higher individual taxes
to pay for ObamaCare will push the nation from recession to depression.
Take all of these tax-and-spend proposals off the table.
Ronald Reagan inherited a deep
recession<http://patriotpost.us/alexander/2009/02/20/obama-vs-reagan>from
the Carter administration. President Reagan cut taxes, and the
resulting 25-year economic growth cycle produced 35 million new jobs and *
increased* government revenues by almost 30 percent -- the largest peacetime
economic expansion in history.
*Third:* Regulations do not create jobs. Regulations eliminate jobs by
choking productivity and stemming wealth production, thus disabling job
creation.
There is no corner of the U.S. economy that isn't currently regulated by the
central government, and consequently, the cost to business and consumers is
staggering.
This week, as Obama administration officials were in Copenhagen selling out
the U.S. economy to the cap-n-tax crowd, his EPA director, Lisa Jackson,
declared back home that carbon dioxide -- the stuff we humans exhale when we
breathe -- poses a danger to the environment. This means that new
regulations on business and industry are on the way, the costs of which will
ultimately be borne by consumers.
The CO2 regulations, as I have argued previously, have everything to do with
centralizing economic control and nothing to do with climate change, and
Obama should be more concerned about the U.S. economic climate than bogus
global climate change predictions.
To supplement economic recovery by deregulation, a thoughtful president
might also push for tort reform. While all those dollars spent defending
frivolous lawsuits might create more trial lawyers, they cost real Americans
real jobs.
*Fourth:* Government spending does not create jobs. Government spending
eliminates jobs.
According to Obama, "There are those who claim we have to choose between
paying down our deficits on the one hand, and investing in job creation and
economic growth on the other -- but this is a false choice." He then went on
to say, that we must "spend our way out of this recession."
Horse pucky.
Unprecedented deficit
spending<http://blog.heritage.org/2009/03/24/bush-deficit-vs-obama-deficit-in-pictures/>for
unsustainable entitlements, and accumulation of national debt, now at
more than $12 trillion, poses an enormous threat to our economic future.
Obama's proposals will add $13 trillion in deficit spending over the next 10
years.
There are only three ways to cut that debt: Raise taxes, inflate the dollar
or cut government spending.
The first two will destroy any semblance of economic recovery. Only the
latter will strengthen the U.S. economy and create jobs.
The president should hold the line on discretionary spending and enact
spending caps enforced by a balanced budget amendment, as first proposed by
Reagan and blocked by Democrats every time it comes up.
*Fifth:* Protectionism does not create jobs. Protectionism hinders job
growth.
Start by approving stalled trade agreements with Colombia, South Korea, and
Panama. After all, 95 percent of consumers on our planet live outside the
U.S. We need unfettered access to those markets. Even the Obama
administration acknowledges that every percentage point increase in exports
creates more than 250,000 jobs in the U.S.
In summary, what Obama can do to help me, and all private-sector employers,
create new jobs is this: Get out of our way.
Of course, Obama and his ilk will consider none of my proposals because they
think government is the solution, not the problem.
Meanwhile, Joe Biden, Obama's point man for jobs, has been making the rounds
and spinning yarns about what his grandfather had to say about recessions
and depressions.
"My grandpop used to have an expression. We're from Scranton. He said,
'Joey, when the guy in Dixon City' -- a small town above Scranton -- 'is out
of work, it's an economic slowdown. When your brother-in-law is out of work,
it's a recession. When you're out of work, it's a depression.'"
Biden's grandfather must've been Harry Truman. "When your neighbor is out of
work, it is a recession. When you are out of work, it is a depression," said
Truman back in 1958. In 1980, Reagan shrewdly amended that chestnut: "A
recession is when your neighbor loses his job. A depression is when you lose
yours. A recovery is when Jimmy Carter loses his."
So, maybe Obama was smart for not inviting me to his jobs summit, because I
would have been screaming from the rooftop that a recovery is when Barak
Obama loses *his* job. For that, in all likelihood, is the only proposal
that will result in true job creation.
*Footnote:* On Obama's recovery.gov website, there is a link to "report
fraud, waste and
abuse<http://www.recovery.gov/Contact/ReportFraud/Pages/Report_Fraud.aspx>."
When understood in the proper context of our
Constitution<http://patriotpost.us/alexander/2009/10/29/nobody-questions-that/>,
all of Obama's proposals constitute fraud, waste and abuse, so I recommend
you report it!
Semper Vigilo, Fortis, Paratus et Fidelis!
Mark Alexander
Publisher, PatriotPost.US <http://patriotpost.us/subscribe/>
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