Dear Friends,
It seems to me that the US debt problem is secondary to the jobs problem. The continued loss of jobs has a tremendous effect on workers today but the effect magnifies over time. If you are a worker or know a worker this effects you deeply. The debt negotiations, while extremely important for mid term problems, are overwhelmed by the oceans of new red tape this administration, along with the last Congress passed, has effectively chained the economy and small business.
Regulation effects small business much more than large business. A small business owner has all he or she can handle keeping it from flying apart. Payroll, taxes, workers comp, accounts payable and accounts due are only a small fraction of the headaches of the small business owner. When this enterprising individual is also loaded up with new and changing regulation it effects this profits, time management and overall profitability. The regulatory ground literally moves beneath his or her feet. This is profoundly impacting the job gain and loss in the US. But the political rhetoric goes on. So here’s some…
President Obama claiming the Republicans are obstructing real negotiations on raising the debt ceiling is like a guy walking up to you in a crowd, then demanding your wallet, with the treat of shooting a random person in the crowd, you refuse and he shoots someone, then he charges you for obstructing him and causing the bystander to get shot. Obama holds the gun… Congress the wallet…
The Democrat argument about taxes on the rich ring hollow to me. What they really mean, is they want to raise taxes on those that are trying to get rich, not on those who are rich. The difference is that those who are rich derive their taxable income as trusts which are taxed at 15%, the people the Democrats are proposing raising taxes on, are the entrepreneurs of our society, taxes on their productive income are 33%, the administration wants them higher. How, may I ask, is punishing the job producer going to lower the unemployment rate? It is apparent the entrepreneur is the real enemy of this administration. With war being waged on them on two fronts.
The one thing everyone is talking about is taxes and spending but the more important one is regulation. Every time the Congress passed a two thousand page bill in the last Congress, it fluffed up into ten thousand or more pages of regulation, once it came out of Cass Sunstien’s office. Regulation is not threat to the uber rich. (The enemy according to Obama). They produce nothing, and to most of them there is a total disconnect from the US economy, as their investments are global and they often have assets of real value like gold as a backup. Usually held in banks not subject to US confiscation rules. But they uber rich have done very well under this administration while the entrepreneur has done poorly. The economic numbers lately have reflected this fact.
Stores and businesses that cater to the uber rich are extremely profitable in this business cycle. While stores and businesses that cater to the average person are struggling. So empirically we can say,, the rich are doing great under this administration, but those that are workers or people trying to run businesses are struggling. (unless their business caters to the rich).
“Now come on,” someone might argue. “why would this administration and the rich hate the entrepreneur?” I would argue that Joseph Schumpeter made a much better argument then I could ever muster. Boiled down it is: the entrepreneur is a threat to the established rich. He causes the established rich much fuss, the established rich must improve their products lest they go out of business, they must stay up late to keep up with the hungry entrepreneur, profits are lowered and in the end… he is usually supplanted by the entrepreneur.
So, armed with taxation and regulation, the established rich slam the door of prosperity shut behind them. ‘There is no sense anyone else becoming rich, to want to do so is to be greedy, but to be born rich is to simply live in the state of affairs as they are.” This self serving logic is the reason the unemployment rate is so high.
But most of us are workers. We have the political power in the form of the suffrage. We suffer those who rule us to rule us. If we want different results maybe it is time to try different tactics. Tax and spend has always worked… to keep the established rich, well rich, but never to expand an economy. Maybe raising taxes, spending more and increasing regulation may not help with the job numbers… but don’t we hate those rich people. Er. Not the really rich, only the guy who gives us our job…
By The way, I just read that the government is looking into new regulation on the US chemical industry. I expect a few thousand pages or so of new regulation will ramp up competition and hiring in that industry as well…
