Jobs Summit: Policy Priorities Outweigh Jobs



AP Photo/J. Scott Applewhite

AP Photo/J. Scott Applewhite

Last week’s Jobs summit and President Obama’s subsequent Job tour is either evidence of this President’s inability to understand the free market or an indication of his willingness to undermine it. Either way it seems that President Obama’s philosophy and policy priorities outweigh his desire to see job creation in the private sector. 

Among the 130 individuals who attended the Jobs Summit were prominent CEOs including Eric Schmidt of Google and Frederick Smith of Federal Express, economists, politicians, and representatives from the SEIU, AFL-CIO and the American Federation of Teachers. Incredibly, two organizations shut out of the meeting were the National Federation of Independent Businesses (NFIB) and the Chamber of Commerce.

Although this was a diverting exercise, it will most likely turn out to have been a profound waste of time. Good businessmen know that you don’t create jobs by simply talking about them, but by providing a climate in which businesses can operate profitably and efficiently. And let’s face it, the Obama Administration’s track record in its first year does not forecast the hope and change that he is projecting for job creation – certainly, not with job-busters like Cap and Trade and national healthcare still on the table. These bills, Obama’s legacy policies, are a huge part of the problem.

Lest we wonder where President Obama’s loyalties lay we need not look far, for green energy jobs are front and center in nearly every mention of a job creation plan. But consider this, the policies directed toward creating green energy jobs and lower CO2 emissions will cause energy costs to skyrocket, bankrupting some businesses and sending others overseas. Yes, more jobs lost. Yet this administration, along with much of the media, is not even willing to question the accuracy of global warming science, though this is presumably the very reason that we are willing to subject our citizens to outrageous energy costs and hem industry with wild and unfair regulations.

If we want to get serious about jobs we need to:

Stop out-of-control government spending, thereby creating a stable environment where banks aren’t afraid to lend money. Washington Post columnist, Steven Pearlstein states that, “a lot of debt has to be paid down or written off, the government has to learn to live more within its means, currencies have to be adjusted to reflect huge macroeconomic imbalances.” Congress is attempting to get these banks lending again, “by extending the authorization to temporarily provide higher loan guarantees and eliminate fees for borrowers,” says Olympia Snowe, R- Maine.

I can’t help thinking that these tactics sound suspiciously familiar – like those incentives we saw during the housing crises where banks were strong-armed into providing bad loans for mortgages just to get people into a home.

Provide tax incentives for small businesses and decrease unfair regulations. Tax breaks are an idea being tossed around by the powers that be. While this is a great idea businesses face the reality of tax cuts from the Bush era being rolled back next year. Will these new proposed “tax cuts” take the place of what Bush instituted during his time in office. If so, how will this help since many small businesses are already laying people off or even closing up shop?  What about the new policies being spun by Congress (i.e. Cap and Trade and healthcare) that would impose new regulations and new taxes? Wouldn’t they work against such efforts to provide incentive for jobs and growth? Small businesses are aware of these realities. As a result the market is wary, leaving little incentive to start new companies or make new hires. Businesses will hire when they stand to make a profit, not simply because someone needs a job.

Finally, stop bailing out unprofitable companies. If a company fails, there is another that will rise to take its place, and that new business will move in to supply new jobs. Rather than creating a climate for trust and confidence it seems the Obama Administration is following in the footsteps of a now bankrupt General Motors. We should consider carefully why GM failed and in so doing we may see our future at the hands of an Obama White House.

A Closer look at GM

It is clear that General Motors made some very bad decisions. First, they neglected market trends and failed to innovate to keep up with competition. Secondly, they practiced bad financial policy which led to staggering losses. Peter Cohan of DailyFinance.com writes that GM reported a negative $5.6 million net worth in 2006 and a negative $91 million net worth in the first quarter of 2009. Finally, GM made some bad agreements with the labor unions. Caty Hill of NYDailyNews.com writes:

General Motors is straddled with the ‘legacy costs’ of providing healthcare and pensions to a host of retired workers, which cost GM millions of dollars every single year. “When GM agreed to them, the company was lauded as an example of good corporate governance. Now, everyone says, ‘How did they agree to this?’ Back then, it was considered enlightened. But now, it’s a different story,” said Jeremy Anwyl, CEO of Edmunds.com.

These legacy costs shake out to be about $2,000 per car, David Cole, Chairman of the Center for Automotive Research, told Popular Mechanics. And that $2,000 has to be passed along to the consumer if GM wants to turn a significant profit.

The labor union’s contribution to the failure of GM should not be underplayed. Especially, as we consider the relationship between labor unions and the Obama Administration, notably ACORN and SEIU.  

Though the unions claim to be the watchdog looking out for the rights of the worker Will Collins writes in his blog, Freedom at Work:

Studies have repeatedly shown that forced unionism states lag behind Right to Work states in terms of job creation, economic growth, and worker income.

Collins cites this study from the National Institute for Labor Relations Research:

For many years, U.S. Labor Department data have shown that states with Right to Work laws on the books have far faster private-sector job growth than states that do not protect employees from federal policies authorizing the termination of workers for refusal to pay dues or fees to an unwanted union.

Between 1995 and 2005, private-sector jobs in Right to Work states increased by a net 20.2%. That’s a 79% greater increase than the relatively small increase in private-sector jobs experienced by non-Right to Work states over this period.

 Of course the automobile industry is not the only one floundering, nor is it the only one crippled by Big Labor agreements. Daily newspapers are also tanking. Even long standing papers like the Washington Post and the Los Angeles Times are shedding staff and reducing services all over the country. The President has expressed that he would be willing to provide a bailout to newspapers in an effort to balance out the opinionated alternate media. Enough already! The last thing we need is government owning any more of our media – print, digital or otherwise.

One of the reasons these papers are failing is because they have not succeeded in changing with the times. But interestingly, there is still news to be had. Just look at the explosion of the blogosphere. Perhaps if more of these papers would do their job – and actually report the news – they would sell some more copy, or if that is passé, maybe they’ll find revenue through advertisements on their webpage.    

Back on point, the purpose of the Jobs Summit leaves me scratching my head. Some of what was suggested would require injecting more government money into public works and infrastructure. Democrats are pushing for this in their Jobs Stimulus, which would purportedly pull from what’s left of the $787 billion economic stimulus passed by Congress in February. These monies would be directed toward extending unemployment benefits, short-term public sector work, and would apply only a band-aid to a gaping wound. I would agree with President Obama’s assessment, “Ultimately, true economic recovery is only going to come from the private sector.” 

But Obama has already proven that he doesn’t really believe those words. For this statement is diametrically opposed to his policies, his public works, and the philosophy of the people with whom he surrounds himself. Chief among the policies that put him at odds with the private sector is healthcare reform. The current bill will provide the government with control of one-sixth of our Nation’s economy. No matter which way you slice it that means more pie for the government and less for the private sector.

Given Obama’s associations with SEIU and ACORN, his Marxist and Socialist advisors and his administration’s policies, designs for a socialist economic system are becoming clearer. We might conclude that these blueprints lay the foundation for a move toward a socialist economy like that of Europe’s where the people don’t have a choice but rather a league of nations decides their economy for them. My guess is that the President knows precisely what he is doing and is fully aware of how his efforts aid in dismantling the free market system one piece at a time.

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  • Adam

    First: I think you need to do some more research on quality-of-life data on union industries vs. non-unionized members; e.g. nursing in Iowa vs. Minnesota.
    But mainly: small business don’t hire as many people because they cannot afford to provide them health insurance. If (truly) small businesses didn’t have to pay so much for so little, they’d have a LOT more capital to spend on wages for new hires.
    Last, but certainly not least: if you really believe in the free market, you should LOVE cap & trade! The only reason green energy hasn’t taken off in America is because there is no financial incentive– neither on the producer’s end nor the consumer’s. Once businesses have a floor price on energy, they’ll be willing to invest in new, green energy companies; more certain they’ll make a profit. That’s the very definition of private sector jobs growth!! An entirely new industry that meets a new market demand for cheaper energy. We just have to make giving aid & comfort to terrorists more expensive than renewable energy, and the market will spring up like magic. Do you believe in capitalism or don’t you?

    • http://www.jps-jive.blogspot.com JP Murie

      @Adam, Thanks for your comments.

      I do enjoy capitalism and appreciate that a capitalistic system is one in which the people innovate, create and control business. This economic model also allows those companies to reap the reward. The system laid out for us under Cap and Trade is one where the government determines what industries can operate and in what manner. That is not free market enterprise. The administration itself has said that some of the regulations and taxes it will impose will force companies out of business – therefore people will lose jobs.

      I’m not against green energy, but, I question if it is really cheaper? If so, do we need government to convince us of this and inhibit industry growth in traditional energies like coal and natural gas? As for the renewable energy market springing up like magic that would certainly be a trick. I’m for new energy, but not with government’s large forceful hand dragging us along and undermining business in the process.

      As for small businesses, I am a small business owner and understand the limitations. It is true that providing healthcare can be expensive for small businesses, but there are many expenses. I fail to understand where you are going with this. Are you suggesting that healthcare reform in the new bill before Congress will fix small business insurance woes? If so, that’s another lengthy conversation.

      Finally to address union issues – I am not familiar with the specific groups you mentioned, but I do have experience in working with the unions. To be fair there are all kinds of unions and they do have a roll to play. I am speaking specifically to unions which function as powerful PACs pushing their agenda and demanding entitlements that help to drive companies like GM into the ground.
      .-= JP Murie´s last blog ..CT: The Devastating Mercy of God =-.

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