So the President and most every other politicians and political wonk seems to be willing to use a phrase we consider stupid-from-the-jump.
“Jobs bill.”
We think that anyone who supports “jobs” legislation, needs to have an economics lesson. The way we see it, governments cannot create private sector jobs – period. All they can do is create the conditions that will run a billiards style bank shot, aiming for the legislation to ultimately result in new positions opening up.
Create the conditions. What conditions? Conditions that make business owners and managers say, “Gosh darn it! There’s demand for what I’m selling and I have no way to meet all that demand with my current staff. I’d better find one or more people to help us meet this demand, or I am leaving money on the table.”
If a business can make enough profit off of the next hiree to make the burden of that employee worthwhile, most employers will go and hire him or her. But can anyone – ANYONE – give us a business reason why it should hire someone if it won’t result in greater profits for that company? If one of us owns a business, and we’re going to lose money because hiring someone costs us more than we’ll make in sales, we’d be idiots to make the hire – unless there’s some other factor that doesn’t relate to immediate profits. (For example, we might hire someone who is so good at what he or she does, that we don’t want the competition to snap him or her up. So we might not have an immediate need, but we might want to take a small cut in profits to prevent our competitor from beating us in the marketplace – especially in the short term.) Ultimately, though, it still comes down to profits, and if we’re losing more than we’re taking in, we can’t just print money to pay our bills. So the business either has to lean up or go out of business altogether.
This seems so abysmally obvious, that we consider it political malfeasance to discuss “jobs” bills. What needs to be discussed are “business conditions bills.” Governments CAN set up conditions that make it worthwhile for a business to consider expansion. Reducing taxes on businesses would be one way. It’s no substitute for increased demand, but it at least gives businesses some breathing room. Incentives to hire rather than to move out of country with offshore hiring is another good idea. But this, too, is just a stopgap since other countries will likely compete as well. At some point, someone is going to have to cry uncle and lose the competition.
So what can the Federal government do?
#1 – It can recognize that businesses are the source for all private sector jobs. This recognition should come with the further acknowledgment that business owners do not exist in order to provide jobs. They exist to make the owners profits (that they can personally use in their private lives for any legal purpose they want) and that most business owners recognize that profits come from meeting customers’ demand. All feel-good efforts go contrary to these simple facts and are doomed to fail.
#2 – It can recognize that there are certain PUBLIC SECTOR activities that are in the legitimate province of the Federal government, create large programs to fulfill the objectives, and hire citizens to do the work. These citizens will earn money from all taxpayers as compensation for the very real and worthwhile services that they provide to the American people (building an interstate freeway system, for example, or a network of hydro-electric dams, or space missions, etc.). The people in these government programs will then have money to spend. This will increase demand, thus increasing the need for private sector positions to meet the increased demand.
#3 – In parallel with #2, the Federal government can contract out parts of the public projects to private contractors. These private contractors (businesses) will have to hire people who are paid with taxpayer dollars. But they will go out into the private sector and buy goods and services, thereby increasing demand and generating the need for more private hires. Note: anyone who works on a government job, whether a government worker or a someone working for a government contractor is being paid by We the Taxpayers. It may be worthwhile and good, but it needs to be recognized and accounted for as what it is.
#4 – The government can provide incentives and partnerships for innovation. How does Apple generate demand for its products? It comes out with new, innovative products that people want. The better they do this, the greater the demand for their products and services. The greater the demand, the greater the need to hire more people (jobs). If the government will just get out of the way and say something like, “Create a new product that results in you needing to open up for new hires, and make these jobs USA jobs, you, the entrepreneur will get a good size tax cut. More money stays with the company; easier to make a profit; incentives to innovate; success means more hires, and so on – a positive cycle.
We at O-t-c are not economists, but we believe that these minimalist steps can do a great deal toward healing our economy. We’d like to see people begin discussing things in terms of business conditions – and stop all the blather about “jobs.” Talking about jobs is like talking about the sound not coming out of your speakers. You want to create sound. But you can’t get the sound unless you supply a signal. Business is the signal. Jobs are the sound.
- Off-the-cliff.com
We read a story about the difficulties faced by the Marines and others in our armed forces as they wage the fight on our behalf in Afghanistan.
Wars have always been difficult. We would not expect this one to be a cake-walk by any means, and this entry should also be read as a salute to the folks protecting our families and We the People of these United States.
We also realize that it is for the generals and admirals to do most of the efforts to rally the troops – to remind them afresh about how proud the American civilians back home are of their herculean efforts – to clean out despotism from a society that does not want to have it cleaned out; to bring a modicum of civilization to a desolate corner of the world (not a copy of American civilization – but letting their civilization flourish free from carnage).
But we are very mindful of the fact that George W. Bush knew how to prosecute a war (even if he made mistakes – as he did before the surge in Iraq). He did something we have not seen the current President do: He went into the war theater to break bread with the troops. He made clear in numerous speeches that America had the backs of each and every American soldier, as every good American does.
We ask you, Mr. Obama. You have time to visit Copenhagen to pick up a stupidly given award. You have time to spend time trying to get environmentalism boondoggles going, also in Copenhagen. We realize you can’t have the finest meals that Europe can provide in Afghanistan. We realize you can’t hob nob with European aristocrats and world leaders in Afghanistan. But we think you can hob nob with some people who are far more important to your administration and to the American people: the American military personnel.
You might be coolly received at first, since you have seen fit to dis them for the most part. (Explain to us again how your decision about troop levels in Afghanistan is so very different from General McCrystals that it took months of agonizing to make it?) But we believe that if you made overtures to show that you really do have their backs (assuming of course, that this is accurate), they would come to see it and to appreciate it.
This would mean severing ties with your Leftist base. So the question seems to be this: who do you consider more important, Mr. President? The jerk-water leaders in Europe who will hold America’s coat while we do the fighting that they should be up to their butts in, right along side us? Or is it your Leftist base that would come down on you like a ton of bricks, calling you a traitor for doing the noble thing of supporting the American soldiers who give the Leftists the ability to come down on you like a ton of bricks?
Or will you break bread with our American soldiers, Mr. President. Have you no rallying words for them as they face a very tough, ruthless enemy who doesn’t have his hands tied behind his back because of some idiots back home saying that our guys have to play bridge while the enemy is playing tackle football?
Where are your loyalties, Mr. President? We at O-t-c would really like to know.
- Off-the-cliff.com