http://www.investors.com/NewsAndAnalysis/Article.aspx?id=512490
Clueless Summit
Posted 11/13/2009 07:54 PM ET
Economy: Next month's "Jobs Summit" at the White House promises to feature a lot of posing and preening by Washington politicians. Unfortunately, despite lots of photo ops, it's not likely to result in many jobs.
Something's wrong when the government of the most prolific job-creating economy in history has to schedule a "summit" to decide how to create jobs.
This isn't rocket science. Any business owner, entrepreneur or manager can tell you that job creation requires new businesses, new investment in plant and equipment, and economic policies conducive to both.
But so far, those in charge in Washington seem to be doing everything in their power to kill jobs, whether it's hiking the minimum wage, snubbing trade deals, imposing new mandates with health reforms and climate controls, or paving the way for a massive 69% increase in capital-gains tax rates by letting the Bush cuts expire.
All told, these and other initiatives, plus the higher spending that goes with them, will suck as much as $13 trillion out of our economy over the next decade.
Yet Democrats are shocked — shocked! — that the unemployment rate has surged to a 26-year high of 10.2%, nearly a third higher than estimated in February. And that more than 4 million jobs have been lost this year despite $700 billion in bailouts, $787 billion in "stimulus," record-low interest rates of 0%, and more than $1 trillion in liquidity pumped into the banking system.
Given this record, the only real reason for a jobs summit is to appear to be "doing something" about the labor market implosion. After all, 2010 is a midterm election year, and the Democrats' ability to continue their leftist tinkering with our once-mighty economy hinges on voters giving them another chance.
Well, they don't need a summit. Job creation closely tracks investment in plants and equipment. So anything the government does to remove barriers to business investment — whether by cutting regulations, slashing taxes or reducing government spending — will lead to more jobs.
Of particular importance are small businesses, which — as a new report from the Kauffman Foundation noted — created virtually all the new jobs from 1980 to 2005.
Today, small firms suffer the most damage from congressional incompetence. The newly passed health care bill, for example, slaps families with more than $500,000 in income with an added 5.4% tax. But, according to Congress' Joint Tax Committee, a third of this will be paid by small, family-owned businesses.
The government's fiscal insanity hurts everyone. The Congressional Budget Office reckons that government outlays will grow at least 67% over the next 10 years while public debt more than doubles to $14.3 trillion. In short, not an ideal time for entrepreneurs.
Meanwhile, as Americans in the hundreds of thousands lose their jobs each month, the government continues to siphon off badly needed investment capital, waste money to keep failed companies afloat, discourage personal savings and erect barriers to hiring.
If this continues, don't expect the "Sorry, not hiring" signs to come down very soon — summit or no summit.