“Go on a 4-year recess!” many people are telling Congress right about now.
At least that would be a 4-year period that businesspeople, knowing that nothing would change, could plan for.
Is there really anything a president or Congress or any state and local government official can do that will help create new jobs in America today?
The honest-to-goodness answer is that there is darned little any elected representative can do to “create jobs” themselves as they always promise, year in and year out. The only jobs elected officials can technically create — those in the “public sector” — are all totally dependent upon the taxes paid by the economic engine called the “private sector.”
Politicians can help set the legal and regulatory climate in order to allow the economy to grow like yeast and provide millions of new jobs.
But when there is too much heavy-handedness from Washington and the state capitols in the form of excessive taxation and regulation, the “animal spirits” of human economic behavior that John Maynard Keynes wrote about and the “invisible hand” mentioned by Adam Smith get squelched, and so does the creation of millions of new jobs.
We are seeing that right now. The higher taxes and costly regulations that loom on the horizon are causing businesspeople to go on strike and wait for the economic and political environment to clear up before investing again.
Just to point out the absurdity of any politician promising to create more permanent private sector jobs, think of the last time you saw a president of any party come up with a new medical device and market it and make millions? When was the last time you saw a speaker of the House invest in a manufacturing company, or operate as chief executive officer of a semiconductor manufacturer, or sell a service such as home health care?
Politicians of either stripe cannot create jobs for you (unless he is Congressman Darrell Issa, who started a very successful security firm before going to Congress).
You know what creates new jobs in America? Enlightened self-interest by risk-takers, business owners and decision-makers. As in: “I wonder if I can invent something today like a wheel or fire or a club and trade or sell it to someone else for more than it costs me to make it?”
If the cost of making something is less than the benefit (return of your money plus some profit) of what you sell, then you typically do it. That is, if you have a gutsy, courageous streak in you that can put up with all the obstacles that you have to overcome if you are ever going to succeed as a businessperson. Starting and running a business is hard work. If you have never done so, ask someone who has and see what they have to say about their experiences.
In fact, on this Labor Day weekend, I say it is time to start thinking seriously about changing the name of one of the other federal holidays (how about Columbus Day?) to this:
Thank My Boss For Giving Me a Job Day.
After all, there would be no jobs to be had if there were no investors, entrepreneurs and executives to start companies in the first place.
I think businesspeople deserve some sort of commendation or medal from Congress each time they borrow money against their house, max out their credit cards, worry about making payroll and paying taxes, taxes and more taxes to start a new business. Business executives, both large and small, take all the risks at the beginning and hope it works out in the end.
And though four out of five new small businesses fail in the first three years of operations, nobody reaches out to comfort the people who lost money investing in them. That’s just the American Way!
Businesses do not exist for the sole, or even primary, purpose of providing jobs for people. Or to provide benefits to workers such as health care, pensions or 401k plans.
Jobs are a positive by-product of one simple driving force in nature: the desire to make a profit by making and selling something that other people will buy.
We honor all the workers of America out there on this Labor Day.
But we should also offer a salute to all the brave entrepreneurs who have a bright idea and then fight through thick and thin to create companies that reward their shareholders and provide jobs and incomes to all of their employees.
You can’t have one without the other.
Frank Hill has served as chief of staff to former Congressman Alex McMillan (R-N.C.), House Budget Committee staff, Commission on Entitlement and Tax Reform staff, and as chief of staff to former Sen. Elizabeth Dole (R-N.C.).