June 14, 2011
Barack Obama and his colleagues in the enterprise to manage the American free enterprise system believe that government knows better than the private sector how to create jobs. This is an article of faith with the Left. As the President said in an interview on "The Today Show:"
What we have to do now, what this Jobs Council is all about, is identifying where the jobs of the future are going to be. How do we make sure there's a match between what people are getting trained for and the jobs that exist, how do we make sure that capital is flowing into those places with the greatest opportunity? We are on the right track. The key is figuring out how do we accelerate it.
No: Government doesn't have to figure this out --- those who create jobs do. Government needs to remove itself substantially from the equation and allow open markets to determine whom to hire, for how much compensation and benefits, and what kinds of goods and services to produce. This is the very essence of the American economic experiment, one that has led to greater benefits for more people than any other system of finance, production, and income in history.
Mr. Obama also spoke of technological changes that have cost jobs, e.g., the replacement by airport check-in kiosks of counter assistants. Does he not realize that if those kiosks are made in the U.S., they create better paying jobs for well-trained shop-floor workers than a counter job ever could? Creative destruction, ala Joseph Shumpeter, is what makes capitalism vibrant. It is endlessly discomfiting but also continuously productive and financially rewarding.
During the same interview, Mr. Obama was asked about the debt ceiling and Republican demands that any increase in the ceiling be accompanied by significant federal spending reductions. "There is a way of solving this problem," he said, "that doesn't require any big, radical changes. What it does require is everybody makes some sacrifices."
This is false and, in fairness to Mr. Obama, is a classic politician's answer: We can solve the problem without any noticeable costs or losses to those affected by them. This is silliness. In the context of the federal budget, this is sort of like saying one can perform open heart surgery without cutting the skin. Of course "solving the problem" requires radical change --- change that can be meted-out in such a way that the pain is modest, such as a graduated change to private investment accounts in the Social Security system, but if we are to remedy our serious fiscal crisis in anything resembling a serious manner, we must act boldly --- even radically --- to transform the size, scope, and costs of the federal government. This will involve a disruption in the federal welfare state many have come to know and, if not love, rely on heavily.
Mr. Obama, while in North Carolina yesterday, also acknowledged that there were far fewer "shovel ready" infrastructure projects than he had thought. This is really quite remarkable: He was a U.S. Senator for four years, and surely during the annual appropriations processes, as he tried to get funding for state projects, he must have realized how difficult getting EPA approval for construction is. Or perhaps not --- he must have been so removed from this system that he was oblivious to it.
We increase job growth by shrinking the public sector and its vast costs, comprehensive entitlement program reform, tax simplification and reduction, and streamlining and downsizing the federal regulatory process. This is common sense.
What it is not is consistent with Mr. Obama's vision of an expansive federal state, one that can do everything from demand the firing of an auto company executive to requiring every American to purchase a health insurance plan (one approved by Uncle Sam, of course). Having an invasive, insistent, and comprehensive tax and regulatory structure is a matter of faith for Mr. Obama. He does not believe in the wisdom of private choices made in a marketplace characterized by ordered liberty, but in the genius of benign bureaucratic management from on high. This is, perhaps, grounded in his profound and even hostile skepticism of the private sector, which he seems to see as intrinsically greedy and avaricious. Such perspectives are rooted in the belief that a massive government is needed to protect against the oppression of poor and middle-income by the ignoble rich. This, too, is an article of liberal faith.
Under the just laws envisioned by our Founders (e.g., theft and deception should be punishable by law), free enterprise can thrive in an ethical manner without government intervention or attempts at, in Mr. Obama's term, "acceleration." The irony is that such thriving can only happen if Mr. Obama abandons his economic philosophy, which ultimately grows out of a particular kind of view of human nature and the role of government. That this is unlikely is essentially axiomatic and also bodes poorly for the economic future of our country.