Jeff Neal for C.U.R.E. - Certain Unalienable Rights Endowment

Just Let Me Fish

In Economics, Opinion on May 11, 2011 at 10:52 am

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 ought not be the goals 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 his 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 address with contingency plans, knowing that success or failure hinges on the accuracy of his judgments.  The risks he can not underwrite, the risks he will not take, are risks that at half-time the government will move the goal-line or decide that a touchdown is really worth only 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 them 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.’  Job growth occurs 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, at which time he will hire hungry laborers to produce the product.  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 – oh, and an empty stomach if he isn’t.  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.”

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