The one thing the government hasn't tried for at least 3 years is to get out of the way.
Now that President Obama’s hope-and-change green job-creating juggernaut has flatlined (with 0% job growth in August and downward revisions for prior months), a reasonable question to ask is, what can governments do now?
The answer is that perhaps they can do the one thing they haven’t tried in at least 3 years, if not more: nothing. That is, governments can minimize their footprint on the economy, lighten regulations, cut tax rates (permanently), stop threatening ‘millionaires and billionaires’, banks, oil companies, non-union workers and the private sector in general and basically get out of the way of the people who would otherwise be creating the jobs.
For the fact is, governments and politicians, no matter how wise or worthy, don’t create jobs, on net balance. Even big, established business corporations don’t do it; they’ve lost almost 3 million net jobs in the US over the past decade.
Real job creation is the role of startup entrepreneurs: businessmen and women, investors and speculators with an assist from venture capitalists and private insurance companies. That’s right, the people most reviled on the Left as undeserving rich, racist polluting exploiters are in fact the ones from whom all prosperity flows (prosperity that has to be created before it may be distributed). The pudding is that Obama, Reid, Pelosi, Frank, Dodd, Waters & Co. are at the top of their game in crushing and suppressing these fatcat scum of the Earth, and the logical and inevitable outcome has come to pass, among which the worst spike in black teen unemployment in a generation: 47%.
Entrepreneurs put together business projects on their own account, without subsidies, privileges or prejudice, hoping to enjoy profits (which arrive years or decades after everyone else, including workers, have been paid) but having no guarantee against losses for failing to provide the optimum mix of high-quality low-priced products and services and well-compensated JOBS most urgently needed in the marketplace. When they fail, entrepreneurs lose their own money, not yours and mine, and they don’t indenture our grandchildren.
All the undue laws, regulations, taxes, red tape, lawsuits, threats, monetary manipulations and hostility toward profits that governments slap on the private sector, can only have the effect of raising the cost and risk of hiring people to prohibitive heights, resulting in the unemployment that we are suffering.
By ‘undue’ is meant those interventions which do not derive from governments’ legitimate role of preventing and punishing murder, robbery, theft, fraud, assault, rape, persecution and/or conspiracy. Does it really take tens of thousands of pages of laws, hundreds of agencies and 8 million unionized public-sector employees to do that?
Entrepreneurship doesn’t need to take direction from government in order to do the right thing for the economy. Whether the subject is food, clothing, shelter, minerals, energy, clean air, medicine, university faculty parking spaces or JOBS, the same entrepreneurial cycle pattern emerges: Scarcity leads to rising market prices, which signal entrepreneurial opportunity; there’s money to be made (‘there’s gold in them thar hills!’). Investors and speculators advance their own savings to fund research and development to invent new ways to extract and produce more, to drill deeper under the ocean floor using only one tower where five had been required before, to design new industrial and technological processes, to genetically engineer seeds that multiply crop yields, to discover new life-prolonging and enhancing miracle drugs, etc. Many entrepreneurs fail, at their own expense (not the taxpayer’s) but others succeed, and the result is profits for them and abundant products and services at prices for you and I that are lower than before the ‘crisis’ that started the cycle.
The only force capable of stopping this virtuous cycle is… force: Prohibiting the market to function; controlling wages and/or prices so that signals and information about the true relative abundance and scarcity do not get transmitted properly; awarding contracts and employment positions based on political favoritism, nepotism or ethnic preferences rather than objective competence and qualifications; forbiding an aerospace company from opening a new plant in a right-to-work state because it doesn’t please the Big Labor bosses; barring the exploitation of available resources (EPA); destroying the U.S. IPO market via Sarbanes-Oxley; forcing taxpayers to prop up firms that have failed; failing to enforce the rule of law consistently and fairly; bringing criminal charges against oil companies over the death of a few birds while giving the windmill industry a free slaughter pass; paying people increasingly generous benefits for not working, out of the pockets of those that are; wasting taxpayer money on ‘bridges to nowhere’ on the ludicrous principle that government spending somehow multiplies economic benefits above what that same money would accomplish in private hands from which it was taken…and on and on. Instead of being the custodian of individual liberty and private property rights, government has metastasized into a giant job-killing machine.
The great economic revolutions that began in England in the late 18th and early 19th centuries and were carried forward in the United States in the 19th and 20th , were the result of liberty, of government permitting it to happen, not interfering, not doing what most governments to this day still do, which is to stomp on and crush any force or individual that competes with their power and status. The sooner we learn that lesson, the sooner the jobs engine will be revived.
To quote Rich Karlgaard of Forbes Magazine: “Entrepreneurs are not just a cute little sub sector of the American economy. They are the whole game”. Or Tim Kane of the Kaufman Foundation: “When it comes to U.S. job growth, start-up companies aren’t everything. They’re the only thing.” Government has a whole lot of nothing to do about it. May it get started right away.