Brett McMahon

 

It’s no secret that the most elusive prey in Washington these days is the long-lost, newly created American job. The way our leaders discuss and debate it does not inspire confidence that they have the right ideas or tools to spur job creation anytime soon. It’s time to admit that the President’s “American Jobs Act” needs to be killed in favor of a plan that will actually allow the free enterprise system to create real jobs.


First, we have to define and understand jobs. True job creation cannot be forced or mandated; it comes from a brave soul with some extra capital (money) who decides that he or she can increase their profit or efficiency by paying someone else to do a set of tasks.


In general, this is not a demand the government can create, but it is one that Big Brother can restrict, either through access to the extra capital via taxation or by adding hurdles to the process of hiring via bone-headed regulations. Of course, the government can create short-term demand by buying, buying, buying but a resulting job will not have been allocated somewhere more efficient and is therefore little more than a temporary illusion.


So real jobs are likely to grow in situations where entrepreneurs have 1) access to capital 2) reasonable and predictable taxes on income, investment, research, and employees and 3) a fair regulatory system that doesn’t strangle growth.


But a FoxNews story this month made this observation:


“Even though President Obama recently acknowledged the need to minimize regulations, the number appears to be growing. Obama administration regulations on new business rose to 3,573 final rules in 2010, up from 3,503 in 2009 -- the equivalent of about 10 per week.”


Furthermore, it noted that the Heritage Foundation has estimated “that the administration has imposed more than 75 new "major" regulations since 2009 whose annual cost of compliance is $38 billion.”


In looking through the particulars of the President’s proposed job creation plan, if the estimated 1.9 million jobs are added it will be at a cost of $235,000 each with a total bill cost of $447B. Though it may be a slightly better deal for taxpayers than “Stimulus 1”, it still is nowhere near the type of recovery this economy needs and leaves us back at the original problem.


That problem being that government cannot “create jobs” as it wages both a regulatory war against business (see: the current National Labor Relations Board has had a flurry of job killing regulations work through the agency, the iconic American guitar manufacturer, Gibson, has been raided over the type of wood used in its production, the EPA has rolled out regulations that have the effect of immediately laying off thousands of people, and the list could go on and on).


The current plans seem doomed to keep us stuck in the same cycle of throwing money at bad ideas while telling us it’s a new plan or recycling failed ideas out of the history books. We need our elected officials to do more than give lip service to creating the right conditions for jobs to be created. Maybe the best they can do is just to stop attacking job creators and move out of the way.


Brett McMahon

Brett McMahon is a spokesman for the Free Enterprise Alliance's Halt The Assault campaign