On Meet The Press yesterday, I watched former Tennessee congressman Harold Ford, MSNBC’s Rachel Maddow, the Republican National Committee’s Ed Gillespie, and New York Times typist David Brooks. The sat in a circle and lamented the current failure of the Statist dream.
They were trying to decide how to create jobs and “grow” the economy. It would have been funny had it not been so depressing. Some level of government pump-priming was assumed by all to be necessary. Needless interference from Washington munchkins was a given. No one really questioned the level of harm caused by the recent Porkulus, TARP, Detroit and Wall Street bailouts. Even ideas about tax cuts were presented as “for small businesses only”, as if the janitors at General Electric weren’t worth a raise, but the millionaire owners of a Mom’n’Pop enterprises should automatically get a tax break.
(One important thing to remember: Corporations don’t pay taxes. People do. Corporations merely aid the government in collecting taxes from people - they funnel money to Uncle Sam from their employees, their vendors, customers, and their owners.)
Ford, Maddow, Gillespie and Brooks, along with their lords and masters in government, are like the folks whose only tool is a hammer. Everything looks like a nail. The only remaining solution in their toolbag is to take away everything, and then parcel it back out to the people whose behavior they like.
Imagine that you are a small business owner, one of the ones now beloved by politicians everywhere. Or imagine that you are one of Obama's greedy mega-business owners and that you have difficulty speaking because of all the steak and lobster stuffed into your cheeks and the multiple cigars in your mouth that you lit with $100 bills stolen from the savings of orphans.
Imagine that you’re either one of those types of guys. There’s really no difference between the two, except for lobbying power. What would encourage you to hire more people? More speeches from The Teleprompter Jesus? “Investments” of more of your tax money into green “energy”? (Note the scorn quotes.) Would you feel better about hiring more people if the government passed another Porkulus Plan to spend even more money on….government?
I think not. Ask yourself if the following proposals might be more effective:
1. We currently have one of the highest corporate tax rates in the world. Cut that tax rate in half. Let businesses keep the money that they’re earning and let them spend it as they see fit. They can spend it on themselves, on employees, on equipment, on paying vendors, or giving the savings to customers. Either way, it will still get spent or invested. Letting Bill Gates or Mark Cuban or even Jerry Jones spend the money is always a better choice than letting Obama, Reid and Pelosi give the money to their constitutents. If that means there’s less money to be squandered by the Richland Hills Texas City Planning Department, well, so be it.
2. The teen unemployment rate is hovering around 40-50%. We just had a minimum wage increase from $5.25 to $7.25 an hour. Statists are always, always, always surprised when these arbitrary price-fixes hurt teen employment. I have teenagers show up every day looking for work, and some of them might already be worth $10.00 or $12.00 an hour to my employer. Some of them are worth about $3.00 an hour, if motivated with cattle prods. Some of them aren’t worth the amount of CO2 they pump into the environment every day. I would be willing to take a chance on hiring trainloads of these kids if I could do so at around $4.00 an hour. Some of them would be making $12.00 within a year. Most would not. Others would quit within the first week. The only way to find out who is in which group? Hire a bunch of them. But I’m not taking that chance at $7.25 an hour.
3. The black unemployment rate is now at 15%, as compared to a nationwide rate of 9.6%. Why is this? It’s because if I hire a black guy and he doesn’t work out, I’m going to have to spend countless hours with our Human Resources department proving that I’m not a racist who discriminates against black people. The black employee that I let go will automatically be given unemployment compensation, whereas we usually fight those claims filed by someone in a non-protected group. If employees couldn’t sue employers who didn’t want to employ them any longer, just like grocery stores or lawn services can’t sue me when I stop employing them, we might again see minority employment once again pass white employment levels. (Do a bit o’Googling to find out when that was last true. Hint: use the key words “Davis Bacon Act”.)
4. When you hire a babysitter, do you look forward to withholding and paying her taxes? Do you feel obligated to provide for her health insurance? Do you believe that babysitters should be unionized, without benefit of a secret ballot election, and that you should then be forced to hire ONLY union babysitters? Would collecting taxes, providing healthcare, and paying more for union babysitters cause you to hire more or less of them? Please be brief with your response.
5. Our president delights, absolutely delights, in demonizing successful large businesses and employers who want to hang onto the money they earn after they take the risk of hiring people. Could whoever programs his teleprompter change the script and get that idiot to stop doing that? He’s scaring people.
6. Central banks are starting to look at dollars as if they were hand-grenades dipped in HIV vaseline. These people know that the current regime isn’t going to stop throwing money to its constituents as if every day is Mardi Gras, and billions are beads. They know that the Obama/Bernanke/Pelosi Axis Of Inflation is about to start firing up the printing presses. Could we encourage them to stop spending, since dollars are the only currency we can use in the U.S., and we don’t want the market to be flooded with them?
I don’t have an economics degree, and I will never, ever be selected as a talking head on Meet The Press. But I do hire people. Or don't. It just depends on the incentives, doesn't it?