Software Nerd

Saturday, December 05, 2009

The Jobs summit

The President held a "jobs summit" on Thursday, supposedly to get ideas on how to increase the number of jobs in the country.

The answer is: get out of the way. Some ideas:
  • Slash the minimum wage: This will put a few people back to work.
  • Stop extending the duration for which people can receive unemployment relief. One senator wants to extend this in 2011. Some states have started borrowing money from the Feds to pay even the non-extended portion of relief.
  • Remove all mandates on health-care plans. Allow plans to cover whatever they agree to with their client. Also, remove the mandate for hospital emergency rooms to treat all comers with non life-threatening conditions)
Instead, the government will probably come up with some type of tax-credit that will necessarily misdirect resources. Even a simple credit for hiring would be disruptive. Worse, the government is likely to give special incentives to certain types of hiring: e.g. anything they consider a "green job".

The government is responsible for prolonging this recovery. When the government acts to backstop failing businesses, falling home-prices, rising interest rates, and so on, they act to lessen the depth of the downturn. Any such attempt to lessen the depth of the downturn does two things: it lengthens the duration, and it sets things up for a future downturn.

If the government had not acted to "save" us all, unemployment would likely have fallen further and deeper, but we would likely have bounced back and would have been better off today. Instead, the government has bought a less deep downturn at the cost of prolonged misery for some citizens... ... and, the cost of this is in the trillions of dollars!

The main person responsible here is any American voter who thinks the government should "do something" about jobs.