Mr. Obama plans to present a list of ideas to Congress on how to
“jump-start private sector hiring and get Americans back to
work.” Here are some suggested ideas for his list.
#1). Begin with the admission that that you, as the leader
of our government, are not equipped to solve the problem of
joblessness. As Margaret Thatcher said, “The fact is that in a
market economy government does not — and cannot — know where
jobs will come from: If it did know, all those interventionist
policies for ‘picking winners’ and ‘backing success’ would not
have picked losers and compounded failure.”
#2). Own up to some fuzzy thinking when you said last week
that “I still consider one job lost one job too many.” This is
the same mistake that Eleanor Roosevelt made when she wrote in a
syndicated newspaper column in 1945, “We have reached a point
today where labor-saving devices are good only when they do not
throw a worker out of his job.” Jobs are constantly being both
created and destroyed in a dynamic free economy. In a competitive
marketplace, every employer strives to become more economical and
efficient — investing in new and better equipment in order to
reduce the amount of labor that is required
to produce a given output.
#3). This is not — as commonly supposed by liberals — a
race to the bottom. Rather, it is the real key to lifting living
standards and generating stable employment. Through private
sector capital investment, workers become more productive, better
paid, and therefore better able to trade the fruits of their
labor for what workers in other professions or industries have
produced. As Thatcher said, “The right way to attack unemployment
is to produce more goods more cheaply, so more people can afford
to buy them.”
#4). Propping up losing companies like General Motors and
Chrysler is ultimately counter-productive from the viewpoint of
saving jobs. The essence of private enterprise is that businesses
go out of business if they fail to satisfy
their customers and provide a competitive return on investment to
their owners or shareholders. The threat of failure hangs like
the sword of Damocles over all business. It is a necessary and
powerful incentive for improved performance.
#5). Now would be a good time to announce the cancellation
of all future “job summits.” These high-level confabs bringing
together leaders of industry, organized labor and government only
serve to stoke the “fatal conceit” — as Friedrich Hayek called
it — that it is possible to bring together a group of people who
will be able to outperform the marketplace in knowing how best to
run the economy. This is a socialist idea, and it has been proven
wrong again and again.
#6). Now would be an even better time to announce that you
have had a change of heart regarding the misnamed and
undemocratic Employee Free Choice Act, which takes away from
workers the right to a secret ballot in union elections.
Elimination of this legislation would be an extremely positive
step in restoring business confidence.
#7). One should dispense with the idea that tinkering at
the edges with broad tax credits to businesses that expand their
payrolls will do any good. This would have the unintended
consequence of rewarding of employers that were planning to hire
anyway. More to the point, however, it incentivizes the wrong
thinking and behavior. Businesses shouldn’t start with the idea
of creating jobs; they should start with the idea of creating
value for customers.
#8). The best thing that government can do to help create
private sector employment is to take less money away from the
private sector by reducing both taxes and public spending. Again,
as Thatcher said, “Since jobs in a free society do not depend
upon government but upon satisfying customers, there (is) no
point in setting targets for ‘full’ employment. Instead,
government should create the right framework of sound money, low
taxes, light regulation and flexible markets (including labor
markets) to allow prosperity and employment to
grow.”
