Sunday, May 27, 2012
Column on Wealth vs. Job Creation?
Wealth versus Job Creation? Tibor R. Machan “When you’re president, as opposed to the head of a private equity firm, your job is not simply to maximize profits,” said president Obama recently. He added, “Your job is to figure out how everybody in the country has a fair shot. Your job is to think about those workers who get laid off, and how do we pay for their re-training?” Obama continued: “My job is to take into account everybody, not just some. My job is to make sure that the country is growing not just now, but 10 years from now, 20 years from now.” To begin with it is not the job of the president of the United States of manage the country’s economic affairs. His job is to administer a system of public policies aimed at protecting everyone’s rights as a citizen. That means everyone’s rights to life, liberty, and pursuit of happiness or, in short, the liberty of all. Not the welfare or employment or happiness of all but everyone’s right to pursue these values. Just like the cop on the beat, the task isn’t to get everyone to where he or she is going but to secure everyone’s liberty to go wherever he or she wants to go, including, if that’s how the citizenry chooses, staying put. (Freedom has no particular goal; it has to do with making it possible for citizens to choose their goals, so long as these are peaceful ones.) But there is also Mr. Obama’s colossal ignorance of economics: jobs are created when wealth is spent! So, when some firm, be it a ma and pa grocery story or a massive equity corporation, makes profits, those who own the profits, the wealth Mr. Obama so callously demeans, then proceed to spend on various goods and services they wish to have. No one just wants wealth--a bunch of resources sitting in a bank or wherever. The wealth is supposed to serve as a means to obtain one’s children’s healthcare, education, the family’s vacation, recreational facilities, etc., etc. And all of this is produced by people with jobs. Without the wealth, the jobs dry up. So when capitalist institutions enable those who earn profits with their efforts, they are as close to creating jobs as anyone can possibly get. How else does Mr. Obama imagine jobs are created? By taxing the citizenry and taking the funds so taken and investing them in public works projects? But that’s shooting in the dark--how would those in government know which projects will generate bona fide instead of sham jobs? One major element of a free market economy is that it is the sphere where people spend the profits they have earned through the purchase to stocks, through investing in successful enterprises, spending from which jobs are created. It is indeed wealth that creates jobs, what else would? From the tiniest expenditure of a child who is spending a miniscule allowance to a humongous bonus earned by an executive who steered a firm toward immense profits, it is such wealth that leads to the creation of jobs. When the wealth is spent, entrepreneurs figure out what it is that those who spend it want to purchase and proceed to support enterprises that produce this. That is how employment comes about, not from fanciful government projects which may or may not fulfill the wants and needs to people who go shopping. Once again we witness Mr. Obama attempting to discredit the free market place and replace it with government managed “economic” policies. Shame on him and let’s hope his ruse is noticed by those considering sending him back to the White House.