Howard Rich's Blog

January 21, 2009

The Great Job Creation Debate

By Howie Rich

One of the most fundamental questions facing our American democracy (and what’s left of our free market economic system) is this: Who’s responsible for creating jobs?

Is it the government? Or is it the private sector?

Actually, it’s probably more accurate to say that this was one of the fundamental questions America faced during the present decade, which is now limping toward the finish line – a question which was answered emphatically on the side of the public sector.

In a loud, bipartisan chorus involving billions of dollars in new boondoggles and trillions of dollars in new debt, our leaders basically told the private sector to take a hike.

Politicians came to Washington and one-by-one – irrespective of their partisan affiliation or previous ideological convictions – became utterly convinced that the only way to create new jobs in this country was through massive new public works projects, expanded public sector bureaucracies and an increased governmental role in everything under the sun.

This, of course, included an ill-advised ramp-up of government’s involvement (and investment) in the sub-prime mortgage business.

In fact, so busy were Washington politicians in propping up the public sector and doling out low-income housing loans that they failed to notice that the bureaucratic spending was unsustainable and the impending damage to the private sector was potentially catastrophic.

Even when the handwriting began appearing on the wall, government plowed ahead blindly with its expansion, adding record numbers of public sector jobs during the first quarter last year at a time when the private sector was shedding the first of 2.6 million jobs it would eventually lose in 2008.

Only in the months leading up to elections, it seemed, did we hear talk of reversing the trend and moving our country away from this orgy of excess.

Two years ago, one of the central campaign talking points of the Democrats’ sweep of the mid-term elections was the fact that Republicans had added $3 trillion to the national debt – a figure party leaders said was intolerable. In 2008, it was President Barack Obama’s promise of middle class tax relief that more than anything else led to his victory.

Think about that for a moment – after six years of Republican rule, Democrats won Congress in 2006 by promising less spending. Then they won the White House two years later by promising lower taxes.

Did Democrats deliver on their 2006 promises?

Not even a little bit. Like Republicans in 2000, they went right along doing what the party in power before them had done, which is to say they grew government at record levels without any thought as to the consequences.

And now that “consequences” are most assuredly upon us, what has the government’s approach been to solving the problem?

Why it’s the most massive government intervention in the private sector ever, spearheaded by a scarcely-fathomable $10 trillion in federal bailouts, loan guarantees and related “stimulus” plans that have failed to make even a dent in the decline!

And today, leafing through the billions of dollars in local bailout spending that President Obama has proposed, we see precious little of the “middle class tax relief” he promised.

In fact, Democratic Congressional leaders have stripped the plan of tax relief almost entirely in favor of additional spending on government schools and other public works projects.

They tell us these projects will create thousands of jobs – and they will, in the short term for construction companies with cozy, pre-existing government relationships.

But where is the long-term plan to create /permanent/ jobs?

And how, exactly, does starving household budgets of tax relief in order to build government monuments with borrowed money constitute anything other than a perpetuation of what got us into this mess in the first place?

America needs new jobs, of that there can be no doubt. But until we figure out where they should /really/ be coming from, our efforts will continue to be frustrated.

The author is Chairman of Americans for Limited Government

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