TeeJaw Blog

What Can Government Do About Jobs?

Posted in Government and Politics by TeeJaw on Sunday, August 7, 2011, 9: 49 AM

The drive-by state-run media (if those terms are unfamiliar they are explained here) is asking what government can do the create jobs as a way of defending Obama on the theory that politicians in Washington don’t really have much control over whether the economy is good or bad. The Atlantic magazine’s website has one such example: Can Washington Do Anything About Jobs? The conclusion is not much but does offer some examples of a few things Obama and Congress could do.

The Atlantic is right on two out of  six proposals offered, and dead wrong on the other four.  They leave out several other things that Obama and the Congress could do that would have an immediate and positive effect on employment. Here is my evaluation of the six steps The Atlantic proposes:

First, the Atlantic counsels that pending free trade agreements with South Korea, Panama and Columbia be immediately approved. Kudos for that one. It should be done right away and would be positive; free trade is always positive. I give them a grade of “A” for that one.

The next one is to stabilize the housing market but the Atlantic’s proposal involves more government spending that would run up the debt even more and not be as effective as the Atlantic thinks. In fact, it wouldn’t be effective one bit.  The best way to stabilize the housing market is for government to leave it alone for once, and allow it to work out all the impending foreclosures. Throwing money at it is more of the same old, same old and would be nuts. Atlantic gets an “F” on that one.

The next one is to allow more oil and gas drilling. I’ll give the Atlantic an “A” on that one.

Now we get to a really stupid idea for creating jobs — stimulate consumer demand by welcoming a new wave of immigrants. Nothing against immigrants, it’s the Keynesian notions the underlie the Atlantic’s reasoning that is wrong. Consumer demand is not the problem. In fact, consumer demand is never the problem. Consumer demand is a function of consumer wealth. The less wealth consumers have the lower their demand for consumer goods. I’ll never understand why this simple concept is so hard for liberals to grasp. A job and a paycheck is needed before most consumers can effectively make their demand for consumer goods into a reality. Consumer demand does not create jobs. It’s the other way around. The Atlantic goes to the back of the class for that one.  Big red “F’”

Atlantic’s number 5 comes straight out of the bag of stupid dog tricks. They advocate a mandate that a certain percentage of each utility’s power generation come from low-carbon-emission sources as a way to unleash energy companies spending power. That one is not just nonsense, it’s nonsense on stilts because it will engage utility companies spending their resources on wasteful and ineffective attempts to supply energy.  The whole “green jobs” idea is a boondoggle of a false promise.

Finally, they say “explore other deals.” You don’t have to read very far to know this one is not worth a bucket of warm spit. The American people have suffered enough from the “deals” politicians make in their own interest and not in ours. Double “FF” on that one.

The Atlantic gets two A’s and four F’s which equals a GPA of 1.3. Not good enough to get into college, or even to pass to the next grade.

In fact, I’d take away even that low score from the Atlantic for failing to mention the one thing that Obama and Congress could do right now that really would stimulate business investment and job growth almost immediately. Lower tax rates, especially the corporate tax rate, and broaden the tax base. Get rid of all the job-killing regulations that are stifling the economy. Repeal Obamacare, the Dodd-Frank Financial Regulatory Law, Sarbanes Oxley, the light bulb ban, the sugar tariff that has destroyed jobs in the candy industry, and probably about two dozen other stupid laws and regulatory schemes that do little good but hamper economic growth. Another would be eliminate the double taxation of corporate earnings abroad so that Billions of dollars corporations like Apple have sitting offshore, on which they have already paid taxes in the country where the earnings occurred, so those funds could be repatriated to the United States.

A really big thing Obama and Congress could do is to actually take the debt crisis seriously, and actually cut government spending.  This would mean real, actual “cuts” not just reductions in the rate of growth of government spending.

Why does the Atlantic leave all of these out of its job creation prescription? Because they’re liberals and cutting taxes, lowering spending, and reducing regulations are all concepts that are never allowed to creep into their thoughts.

Finally, there is one big thing that would have the greatest effect of all on new job creation. Obama could announce that he is not running for reelection in 2012.

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