Killing job-killers
From the Washington Post:
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With unemployment stuck around 10 percent, President Obama has . . . End federal protectionism and price supports for sugar. . . In 2006, the Commerce Department estimated that the sugar program cost three confectionery manufacturing jobs for each job it saved in sugar growing and harvesting. . . . Repeal the Davis-Bacon Act. Passed in the 1930s to “stabilize” the construction industry . . ., this law requires employers to pay the “prevailing” local wage on federally funded projects. . . . Reduce the federal minimum wage. [AO: It is true that President Obama has pledged to take every responsible step to accelerate the pace of job growth. However, job growth without an attention to attendant effects is not wise. The latter two suggestions, repealing the Davis-Bacon Act and reducing minimum wage, may well create more jobs. But it does so at the cost of lowering the salary of existing workers. This will not necessarily lead to an economic recovery. As has been explained on this site and by economists elsewhere, a key missing ingredient in the recovery is consumer spending. It’s down . . . way down. Consumers are not spending because many consumers are unemployed and others are concerned that they may loose their jobs. The latter two suggestions would slash consumers’ salaries. The effect will be to split a salary that would otherwise go to one person between multiple employees. This will not lead to increased spending by consumers. Indeed, the effect of the latter two suggestions may be increased employment numbers attended by no change in consumer spending because the economy is effectively not being grown. What we need is to create jobs without slashing the salaries of existing workers. The first suggestion, ending sugar policy, is more likely to be successful. However, one must be careful. Just because the price of raw materials (here, sugar) is reduced doesn’t mean that business owners will necessarily employ more individuals. They might simply save the increased profits. If this happens, the economy will not receive the short-term boost in spending it needs. One reason employers may not employ more individuals is that they already are producing the maximum amount of product that the economy will purchase.] |
Read the full opinion HERE.
pledged “to take every responsible step to accelerate the pace of job growth.” Here’s a thought: Instead of trying to “create” jobs by tweaking this tax break or increasing that spending program, why not stop doing things that destroy jobs?
There is nothing normal about an economy in which the federal government takes over giant automakers, bails out too-big-to-fail banks, buys up nearly all mortgages, keeps short-term interest rates at zero and prints over a trillion new dollars. . .
It is not normal for our soldiers to endure three, four, five deployments to war zones in Iraq and Afghanistan. Our military is stretched to the breaking point and our wars are unwinnable. . .
Ways Obama can tend bonds with India: President Obama must balance a short-term need for progress in Afghanistan and Pakistan without losing sight of our equally important long-term ambitions with India. [
Biotech bills give drugmakers too many years of exclusivity: The long-awaited Biotech bills emerging from the House and Senate give too many years of exclusivity to the original makers of biotech drugs [
An Obama gray: Where is the man who once demonstrated keen moral clarity? [
















