Obama’s goal to create good paying jobs may be genuine, but he is off target on several fronts.
Let’s start with the stimulus package. It provides money to build bridges, highways, high-speed rail and numerous other projects. What happens two or three years out when these projects are built?
Presumably people will have money to start spending again and things will return to normal. But by Obama’s own estimate, this huge expenditure will only create or save 3.5 million jobs. We have already lost more than 6 million jobs and are losing well over 1 million every two months. Not only that, but I believe that for the next generation, just like after the Great Depression, people are going to be very careful about how they spend their money.
What does this add up to? Jobs will be very scarce because there will be, just like today, too many stores, too many autos being manufactured, too many airlines, etc. What will Obama do then? Probably another stimulus package to be paid for by our grandchildren.
So what should we do about jobs? A recent study showed that between 1980 and 2005, a 25-year period that if there had not been any new startups there would have been no new jobs created. None!
We need new startups to build new things, not the same old stuff that we have too much of already. The hard working middle class is good at making the same old stuff, but it takes entrepreneurs who take big risks to create new products. Let’s give them an incentive instead of penalizing them! The middle class do not create jobs. Entrepreneurs and venture capitalists do.
Obama may argue that he is creating all these green jobs with solar and wind power and making low mileage autos, all of which will come at a higher price than we pay today.
The higher costs will make some businesses uncompetitive and cause others to go out of business. Still others will move overseas.
An economics professor named Gabriel Calzada at Juan Carlos University in Madrid, Spain, concluded in a 41-page study that for every four green jobs created, nine jobs would be lost. Yikes. Spain is a model Obama wants to emulate? Let’s give industry incentives such as lower capital gains rate and lower corporate taxes to make new products that people want and can afford and get government out of the business of telling industry what to make.