Political Roundtable: What are the key policies that should be implemented in order to [create / facilitate the creation of / not impede the creation of] jobs? As always, feel free to compare your ideas to those of the candidates.
I don't think I am going to offer a whole lot of specific help on this question other than to make some general observations. You can read the responses of the other roundtable participants by clicking on their names: Elgin Hushbeck, Bob Cornwall, Joel Watts, and Arthur Sido.
Let me start by saying that I do not like the language of "job creation." Every election cycle both sides go back and forth as to who is responsible for creating jobs and destroying them. But government truly does not create jobs unless it creates more government. But everyone knows when a president claims that his policies have created x number of jobs, he is not not referring to additional bureaucracy; he is highlighting the employment in the private sector. Government does not create private sector jobs (though there are a handful of exceptions); rather it creates an environment that is favorable to job creation by the private sector. The dilemma is that government can also create the kind of environment that discourages private sector job growth.
Does too much regulation get in the way of additional jobs? Can lax regulations reduce the number of jobs in an industry or geographical area in which a disaster happens because of deregulation? What about taxes? At what point does the tax burden keep employers from hiring additional individuals for their business? At what point is too little revenue generated by tax cuts? What about tax incentives to encourage new business or the expansion of business? These are questions that both sides debate quite vigorously.
Without offering any specifics, I certainly prefer balanced answers to these questions. It seems to me that both sides have something of the truth here and that the extreme approach from partisans on both sides is a big part of the problem. The biggest hindrance to private sector investment in jobs is uncertainty. How uncertain are business owners in our current situation? Back in July 71% of small business owners said that their number one concern was economic uncertainty?
Of course, that uncertainty does not tell us anything about how these persons will vote in November or how those owners feel about taxes and government regulation. This is not about specific policies per se, but knowing what those policies require. Owning a small business is a risk and such entrepreneurs are much too small to get a bail out from the government in case of failure. Most business owners I know are not risk adverse. The risk adverse most often never even take the first steps to own a business. But if the economic uncertainties outweigh what is and can be known, job growth from the private sector will be minimal at best.
Whose policies best make for a situation in which small business owners step out taking on more risk is something I will let others debate. One concern I have that is related to this, but is more long-term is that we focus so much on consumer spending, we spend very little time emphasizing the importance of savings. The Fed continues to pump more money into the economy in order to keep things moving, even at quite a slow pace, but interest rates are currently so low, there is very little incentive for individuals to save for the future, to save for retirement. Economic security and prosperity must not only focus on the present, but on the future as well. In an election year everyone is focused on the former. The latter continues to be neglected at the peril of future generations.
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