The latest jobs number came out this morning and it was pretty rough. This is not good for the recovery or business. I think a few issues with public policy are causing a lot of uncertainty. While the earnings of many business seem to be pretty good they will not stay that way if the uncertainty remains. We are at a crucial point where we need to ensure small business projects don’t evaporate to ensure a robust recovery.
The things I think that will help remove a lot of uncertainty include:
1. Stop talking about raising taxes, whether it be a tax on the “wealthy” or an energy tax. Taxes can only do one thing, reduce growth. They divert money from efficient investment to less efficient uses. No country has ever taxed its way into prosperity. If it was possible everyone would be doing it.
2. Cut government budgets. We need to reduce government deficit by cutting budgets, not by increasing taxes. Take a look at what Christie is doing in NJ, while it may not be popular, it is the necessary medicine. I understand that this will reduce government employment, but the private sector increases will make up for these losses.
3. Stop attacking wealth. The only place jobs can truly be created is in the private sector. Who creates these jobs? It is not the person who can not find a job and is on welfare, it is the person with capital who is now willing to use that money for investment. If the government takes away any advantage gained by doing that investment that investment does not happen. Thus less jobs and more unemployment.
With the current programs it is not the wealthy that are feeling the pain, it is the middle class. Without investment there are less projects, with less projects there are less successful small businesses (or smaller small businesses) and with less small businesses there are less jobs. This effects everything from the ability of the government to collect revenue to the lowest wage workers ability to find work.
I have no illusions that these policies are popular in the current administration, but until we move in this direction the uncertainty will continue.
