If I had to put what we need to spur job creation in one word, that word would be confidence. The people running our country have never run businesses. They have never had to decide whether or not to risk their own money on a business expansion, or a new employee, or a new location, or a new marketing campaign. They don’t know about the sleepless nights such people spend worrying they have made a mistake.
The people running our country at the moment–I am going to call them Salariatarians, after an off-hand comment by Keynes–have existed their entire lives in environments in which their success depended entirely on their political acumen, which is to say their ability to read a crowd or person, and successfully say the things that earned them trust, and votes. This applies most obviously to holding elective office, but also to sitting on the board at some foundation or other, or even simple corporate politics.
Business owners face the jungle. It helps if they are liked, but in the end they survive or die based on the decisions they make. If they are too hasty they fail; if they are too slow they fail. If they are unlucky they fail, and if they are smart and lucky they succeed.
As things stand, it is impossible to judge the next five years. It is impossible to foresee the full extent of the complications, red tape, added costs, and business restrictions that will attend the implementation of Obamacare, if we can’t get it reversed. It is impossible to foresee the effects if some Cap and Tax law is passed, or if the EPA successfully does an end run around the democratic process and directly imposes limits on energy producers. It is difficult to foresee what the new financial “reform” law will mean. It’s hard to know when the real estate glut will end. It’s impossible to foresee the tax situation in 3 years, except that our choices are massive cuts in spending, massive new debt accumulation, or massive tax increases.
It takes balls to be a producer, to be an entrepreneur, to be one of the people who jumps in the deep end. It’s easy enough to condemn their lifestyles once they succeed, but very few people succeed in a big way in this country without the long term personal sacrifice of leisure, and peace of mind.
These people are worried. I know some of them. They are the people who will be creating jobs, when job creation begins anew.
To say that Obama doesn’t get it is really an understatement. The reality is that the politics in which he was raised, and which he has continued his entire adult life, are ANTITHETICAL to job creation. Like FDR, he has, in the end, an contempt for the Capitalists who provide all the sustainable jobs in this country.
So when you look at the sorts of proposals he is putting forward, like a $50 billion spending spree on things we don’t need, we should see just a bit of violence in there. He is not willing to let things work their course. He wants to DEMAND the creation of jobs, to IMPOSE the creation of jobs, by using taxpayer money to create them.
An economy is like a garden. You can’t know what seeds will come up, but you can know that if you weed things regularly, if you water it regularly, and if it gets plenty of sunshine, it will do far better than if you neglect any of these factors. We can call the sunshine luck–over time, it’s always there, but the extent varies. We can control the rest.
Getting our unemployment rates back down will take time, and the starting point is to stop doing the things that are scaring the very people who are needed to create those jobs. FDR did the same thing. He imposed punitive taxes on the wealthy, and spoke out regularly against Capitalists as a class, even if he didn’t use that word.
They responded by sitting on their hands, and letting things take their course. That’s one of the principle reasons the Recession of 1929 became such a disaster. There are of course other factors, but that is in my view an important one.