It is hard to imagine a presidential candidate that is not focusing on a policy for Jobs creation. It is the latest pet rock for the political rocket scientists.
Here is the flash that is in the pan: “What will you do to create jobs for Americans?”
That is what the 2012 presidential race is all about. Sadly that is the worst thing that the race can be about! Let’s examine reality.
Government, regardless of whether it is local city government or national government, is capable of creating jobs. However, the jobs that governments create are NOT production jobs. Government jobs are in fact production-regulating jobs.
Free enterprise creates products. The demand for products drives the creation of jobs. Then as the demand for production increases it also creates competition. Competition creates two key elements; variety and efficiency.
Variety is simply product improvement; either by the first company in, or by new companies seeing opportunity to compete in the marketplace. In order to compete all companies generate better products, with refinements. It is not a far reach to suggest that refinement in production is the constant movement toward more efficient means of bringing a more diverse product to market at a more competitive price.
In free enterprise systems two phenomenon happen. First, quality becomes a competitive factor. Second, price becomes a competitive factor. Some buyers want the bestest and latest new “version” to the point of sleeping on sidewalks overnight just to be able to be first in line. However, there is another breed of consumer that is price conscious. They are willing to accept slightly inferior products or wait until the better product makes its way to the “special price” display.
There are of course other factor at play in the marketplace, but for most intents and purposes free enterprise responds to and grows through the production cycle of competitive demand for improved product lines. This process creates jobs.
As noted above governments also create jobs. In some cases the jobs created by governments are service oriented jobs, such as solid waste management. A public demand is for minimal cost of keeping streets and public areas clean and absent of obvious infringements on health and welfare. Yet, even with public services in demand for this particular product (clean communities) more and more governments find that contracting these services is more effective and efficient when contracted to players in the free enterprise marketplace.
With services of this type, where production is most effective under a free market, governments inherently choose to assume some form of regulatory role. Interestingly, generally governments expand to meet a greater and greater role for regulation. Giving government their due, they actually are quite adept at creating regulatory jobs. That should not suggest that governments are efficient in creating regulatory jobs. From a long career in working within government, in top management, this author can verify from experience that public sector jobs creation and hiring is a tedious and expensive process, anything but efficient. Why is this? Quite simply because the government hiring process is highly regulated also.
Once jobs are in place and positions filled these bureaucratic positions function as a restrictive force to regulate free enterprise systems. Examine this list of a few of the regulatory functions which inhibit the free enterprise system:
- regulation of school curricula
- regulation on housing construction
- regulation of business licensing (sometimes to the extreme of controlling home occupations)
- regulation of property rental
- regulation of home purchases
- regulation of banking
- regulation on what type of trash container may be used
- regulation of water
- regulation of dental care
- regulation of land development
- regulation of every aspect of environmental impact, which adds hundreds of thousands of dollars to projects
- regulation of household lighting
- regulation of what insurance a person must buy
- regulation of product labeling
- etc. etc. etc.
There is another aspect to government jobs creation that is very popular among elected officials and most candidates. It is the salacious idea that Keynesian theory was actually a serious economic concept. In fact Keynes was really simply pushing the agenda for broader government control over people.
Striped of its academic allure Keynesian theory is quite simple, as well as simple-minded. It can be stated something akin to the following.
When the free market is transitioning through product development and identification there will be fluctuations in price and demand for labor. To correct those fluctuations it is essential that government creates public works jobs, in order to stabilize the economy.
From that simplistic view politicians have grown accustomed to the idea that governments, especially national governments, have an obligation to fix the economy. They then begin pursuing adventures into stimulus packages, bailouts, and government run ventures. These measures inevitably fail. Why? Because government bureaucrats instinctively push toward heavy regulation.
When elected officials realize the great disparity between producers and regulators, and the natural course of a shifting economy to have highs and lows they then attempt, under Keynesian philosophy, to force (regulate) marketplace equalization. The vernacular for that is “A chicken in every pot and a car in every driveway.”
Because government is designed to be regulatory by nature all these lofty attempts to meddle in reality do not assist anyone in “keeping up with the Jones.” Rather, the result is to regulate the speed of the Jones to drive only at the pace of the slowest car on the road.
There is no question that Barack Obama was saturated with Keynesian theory while in school. It appears he cannot think past what his chalkboard cadavers preached to him. Well, one thing about higher education that so many undergraduates camping out on Wall Street miss in those early college years is that when one reaches the point of a Master degree or a Doctorate it is incumbent to reason for themselves. Mr. Obama, it appears, has stalled at the front end of that learning curve.
Yet, we ought not to hold him solely accountable for fractured common sense about the role and ability of government. All but one of the Republican candidates running for president in 2012 have launched regulatory theories of jobs stimulation and growth. Those with the more exhaustive plans are in fact quite liberal about maintaining exhausting regulations on business. Their proposals all focus on the concept that somehow a regulatory system can be creative of jobs and a competitive marketplace.
That simply won’t happen! The continued appetite by Democrats and Republicans both to regulate a stronger economy and regulate jobs creation simply does not pass muster. As much as taxation schemes, lengthy (yet hollow) economic plans, boasting about running a big government state make nice ten second sound bites they all fall back to Keynesian theory that government can create a better mouse trap for the marketplace. That is the trap for both job creators and job takers. Government regulation is a failure.
Eight key concepts need to be pursued by candidates and supported by all Americans wishing to have a reliable economy. Those eight concept are:
- REPATRIATION of foreign production gains
- CUT SPENDING AND GOVERNMENT
- REPEAL the personally regulatory system of OBAMACARE
- CUT TAXES
- REPEAL “DODD-FRANK”
- SIGNIFICANTLY REDUCE REGULATION IN ORDER to encourage AMERICAN ENERGY PRODUCTION
- Open trade opportunities that would INCREASE EXPORTS
- UNLEASH AMERICAN INVESTMENT by returning control of the marketplace back to the producers, and I don’t mean Hollywood.
The field is ready to be narrowed among the Republican candidates for president. There has been some fun with a variety of front runners. But, now that time has come to stop playing and return to the serious candidates, of which there are only three. Of these three there is one that replicates Barack Obama. The field has been and remains quite narrow of those deserving serious consideration among the Republicans.