Let’s Create Some Jobs the Easy Way
 When it’s time to justify an asset allocation plan, a stock pick or a prediction – investment consultants, analysts and gurus alike are masters at leveraging the past. And while stock market history can certainly be instructive, there’s always room to doubt whether the market of tomorrow will indeed mimic the market of yesterday. But when it comes to the challenges presented by a 10% unemployment rate, history leaves virtually no doubt in terms of what the government can, or not, do to improve the situation.
Yet at the time of this writing our President is conducting what he’s titled a “Jobs Summit” – implying that we need a strategically-assembled think-tank to devise a solution to our employment woes. His guest list is comprised of an interesting collection of CEOs, Economists and Labor Union Representatives (yeah I know – labor union reps at a jobs “creation” summit, what could be more oxymoronic?). Suspiciously missing from the party are any representatives from business associations, such as the Chamber of Commerce and the National Association of Manufacturers. But that’s okay, because on the other side of the aisle another “Jobs Summit” is being held by Senator Jim Demint. Now that’s funny, the Republicans billed the Jobs Summit as nothing more than a photo op for a President whose opinion rating isn’t what it used to be. But isn’t Mr. Demint doing essentially the same thing – i.e., countering the Administration’s photo op with a photo op of his own? I tell ya, the spin from both directions makes me dizzy…
Now here’s the thing; in my humble (historically supported) opinion, one Jobs Summit, let alone two, is a profound waste of time and tax-payer money. If the government truly wants to help, it simply needs to get the #&%* out of the way. But since we know that ain’t happening, what then, if anything, can Uncle Sam possibly do without making matters worse? Well for starters, the White House needs to recognize who or what actually creates legitimate, lasting jobs in the first place. Then it can simply focus its resources (what’s left of them) there.
So, let me think… who creates jobs? Economists? No. How about Unions? Nuh-uh. Politicians? You’re kidding, right? Private Industry? Yes! Business owners hire people.
Okay then, all joking aside, let’s just do the obvious. For one, let’s table any pending proposals (Healthcare-Reform, Cap and Trade, etc.) that would keep businesses on the fence in terms of hiring. Make no mistake, employers, especially the small to mid-sized ones (who happen to employ mass quantities of humans), are scared to death about what these programs would mean to their bottom lines. Next, let’s not mess with the current capital gains and dividend tax rates (vs. raising them after next year, as planned) – a lower tax on gains and dividends fosters investment in job-creating businesses. Now those two items alone would improve the landscape noticeably. In fact we could stop right there and do just fine.
However, with a whopping 10% unemployment rate and mid-term elections just around the corner, perhaps a little extra is in order. So what else can our elected officials do on their, I mean our, behalf? How about cutting the corporate income tax rate? You’d sure think we could, since ours is the second highest on the planet. And aside from creating jobs, a cut in taxes would ultimately, as it always has, lead to an increase in tax revenue.
I know what you’re thinking – how in the world could a tax cut lead to greater tax revenue? It’s really quite simple; you see when businesses have more income, they expand, become more profitable, pay more taxes, hire more people, who make more money, who pay more taxes, who spend more money, creating more revenue for businesses, who pay more taxes, who hire more people, who make more money, who pay more taxes, who spend more money, creating more revenue for businesses, who pay more taxes, who hire more people, etc., etc., etc…
So there you have it – government invests a little in private industry, unemployment goes down, revenue goes up, budgets get balanced, voters reward the smart-thinkers, and we all live happily ever after…
Yes I know, far too business-friendly for today’s Washington. But don’t sweat it; even though our capitalist foundation gets shaken every now and then, it has always held up just fine. And there’s absolutely no reason to believe this time will be any different.
Have a wonderful day!
Marty
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I agree whole heartedly – it’s been my pet peeve for as long as I can remember. My problem is I can’t figure out why this simple method does not register with the government…
What could their reasoning against it be ???
If you have any idea I sure would like to hear it.
Vicki
Marty,
Great Articles. I like to print them out, but don’t find a way to print just the article without all the surrounding info. I just hilighted this article and got 5 pages.