Our government does a lot of things - none of them are properly called ‘creating jobs.’
One popular government act that purports to stimulate job growth in the private sector is granting a tax credit or other similar gimmicks. “Giving” tax preferences to small or large businesses can have no measurable effect on job growth. Subsidizing new hires or new investments on the margin and otherwise trying to dictate or steer economic activity into more politically popular areas or industries are not the role of good government policy.
A “tax credit” is not free, found money, a gift from the sky, with which a small business man is going to make some investment he otherwise would not make. An entrepreneur invests in the future; letting him keep more of last year’s profit does not change his view of what will happen next year or improve the chances of success in his next venture.
These government acts are ostensibly intended to make capital available to businesses for investment. Capital scarcity is not the problem our economy is facing – there are trillions of dollars of capital invested in stagnating businesses and industries just waiting to pounce on innovative, profitable opportunities – capital is fluid and mobile. Further, good investment ideas are no more scarce today than at any other time in history. What is scarce, what is missing, is the belief that an investor can trust that the rules will not change in a fashion that will make his planning and projections moot. an entrepreneur willingly takes the risks that his customers won’t buy his product or that the cost of the component parts of his widget will increase beyond his control – those are the things he can assess and plan for – success or failure hinge on the accuracy of his own judgments. The risks he can’t underwrite, the risks he will not take, are risks that the government will move the goal-line or decide that a touchdown is really only worth 4 points.
The uncertainties heaped upon business decision-making by the Obama regime are what paralyze the businessmen who would love to be making decisions that would require him to employ more workers so he can make a profit – that’s ‘job creation’; job growth is not a magic trick that works when the government says ‘Abracadabra’ or ‘pretty please.’ It’s something that happens if, and only if, a businessman concludes there is demand for a product or service at a price that exceeds his cost of delivering it. No amount of government action or encouragement makes those productive acts and decisions more likely to occur. Instead, government inaction makes productivity inevitable, since man has a most acquisitive nature and an insatiable thirst for being productive. How do we know? See “History, the advance of mankind.”
You know the old parable: “give a man a fish, he eats for a day. Teach him to fish, he eats for life.” I say “let me fish, damn it; just let me fish.”
