By Russell D. Longcore
I’m tired of hearing the bleating coming from Washington and its willing accomplice, the Media, about jobs. Seems all we ever hear about is creating jobs. But sadly, we hear about it, from public school to public policy, like it’s government’s responsibility to create jobs in the private sector, as if a job was the product, not just a component of a product. Moronic politicians, and the other morons who seek office, argue about how they will create jobs when THEY get into office. Curiously, they seldom say HOW they’re going to do it.
But government does not create jobs in the private sector. So who does create jobs?
Individuals perceive a need for a product of service. That individual forms a business entity…a sole proprietorship, a partnership, or a corporation…to fill that need. The individual risks his own capital with the expectation of a profit on the sale of the product or service. The individual adds in his own labor to bring the product or service to market. If the individual and his business entity can fill that need alone, fine. If not, the business entity adds additional labor by contracting with other people in some manner to perform the labor component of that product or service.
A job is that labor component of a product or service. On paper it differs little from the material component required to create that product or service. It has a unit cost, just like materials do. And the unit cost of labor for a product or service cannot exceed a certain cost, or it causes the product or service to be uncompetitive in the marketplace.
If a person agrees to perform the labor component of a product or service for a certain period of time and for a certain amount of money, that can be called “wages.” And if that person can adjust his expenditures to live on the wages they earn from that single employer, that person could call his income a “living wage.” However, if that person requires additional income, he can (a) contract with different employer to perform labor at a higher rate, (b) add more units of labor to his schedule to earn more, or (c) increase his labor rate through education or experience.
So jobs are created in the normal supply and demand of the marketplace. And when government enacts regulations and taxation, it distorts the marketplace and affects supply and demand. And if the regulations and taxation are onerous, they can actually drive people out of business, making it unprofitable to continue or try to meet demand.
Businesses exists for many reasons. Making a profit is one of them. Seldom will you find a business that states their reason for existence is to provide jobs for people. If the business does not make a profit there will be no more jobs. Even not-for-profit corporations have to earn enough money to pay for materials and labor so the corporation can continue.
But in 2011 America, the free enterprise system has been turned into a fascistic state-run economic system. If you disagree, do this little exercise: think about everything you do every day…everything your life touches…everything that touches you. Then find me one second of your 24-hour day that is not regulated by government. You cannot even breathe without a Federal regulation on clean air in place.
And in this advanced state of fascism, the free market is not free, but entirely distorted by government. The real estate bubble, the 1980s Savings & Loan bubble, the Social Security Ponzi scheme, the dot-com bubble, the mortgage bubble, the inflation bubble are all distortions caused by government. And there is no realistic expectation nor honest chance that the level of fascism in America will be diminished. Certainly the three branches of the Federal Government will not shrink themselves, and the states have all abdicated their responsibility to control DC.
I contend that the American economy will NEVER recover, since the Federal Government will NEVER diminish itself willingly. All of the wild market distortions created by government will eventually be wrung out of the American economy, like dirty water out of a rag. But that process will be an involuntary process, done by Natural Law when the American economy collapses and the US Dollar is forsaken by the world as reserve currency.
So here are just ten reasons why America will NEVER recover as a 50-state nation:
1. Congress will not cut real spending and live within its means. When Washington spends $2 trillion in a budget year, it first must extract that money from workers and businesses. That means that $2 trillion was sucked out of the private sector and cannot be used in private economic activity. And when government borrows, it makes a claim on the future earnings of citizens, even people yet unborn.
2. Washington will monetize its debt with inflated paper dollars, causing hyperinflation.
3. Inflation destroys purchasing power and makes it impossible to know the future value of money. There is a good reason that the Coinage Act of 1792 specified (in Section 19) that the penalty for fraud or embezzlement by officers or employees of the mint for debasing or making the currency to be of less weight or value, “every such officer or person who shall commit any or either of the said offenses, shall be deemed guilty of felony, and shall suffer death.” (Notice that the Act does not say “prosecuted for a felony,” but “deemed” and executed. No trial here.) To issue a paper currency not redeemable in specie is a fraud. Issuing paper dollars with no underlying value steals the very value of the nation’s money. For this action alone, each Governor, officer and employee of the Federal Reserve Bank, Treasury officer and employee, each officer and employee of the US Mint, and each member of Congress should be deemed guilty and put to death. Otherwise, there is no justice in America.
4. The minimum wage law destroys jobs at the first rung of the job ladder. There are millions of jobs that go unfilled because the minimum wage is higher than the true cost of the work performed. And for those who are willing to trade their time and effort for an agreed amount of money, they are prevented by law from entering into a voluntary contract with an employer.
5. Regulations of every sort make lots of manufacturing too expensive to do in America. This is proven over and over by simply looking at the numbers of companies that have moved their manufacturing or other services offshore. The companies are meeting the demand for goods and services that exists here in America by avoiding certain US government regulations. And who can blame them?
6. Health care changes in Obama’s new law are still not clear, causing employers to lay off workers and resist new hiring.
7. Dozens of tax loopholes reward some companies for moving offshore. These companies are only following the law as written by Congress. And make no mistake…corporations exist primarily to provide a profit for the shareholders…not to provide jobs for workers. If going offshore for operations maintains or increases corporate profits, the officers of the corporation have a moral and a fiduciary duty to do so.
8. No one ever knows what new regulations and laws lurk inside omnibus spending bills, which causes even more uncertainty.
9. Taxation laws change regularly, businesses have a tough time making long-tem plans, causing more uncertainty.
10. The laws of supply and demand have been altered by Washington as it attempts to control an uncontrollable force of nature…economic activity.
Americans would like the economy to return to those thrilling days of the early 2000s, when unemployment was at about 4% and the economy was in overdrive. But that will not happen again in America. That boom cycle was a bubble created by government, and government has run out of tools to use to create the next bubble. The bust cycle we’re living through now will be the deepest ever experienced in America, effectively destroying the USA. Adam Smith’s “invisible hand” will move back into the capitalist system holding a sword, and will cut off the grasping hands of Washington at long last. Sadly, wringing inflation and socialism out of America will be catastrophic, with massive loss of life and a return to 18th-century lifestyles.
The state or states that secede from the Union and embrace capitalism once again will shorten the suffering and become the economic beacon of the planet. In the land of the blind, the one-eyed man is King. Said another way…if the rest of the world suffers under socialism, it should not be too difficult to offer a workable alternative. You don’t have to be a genius, just genuine.
Secession is the only hope for mankind. Who will be first?
DumpDC. Six Letters That Can Change History.
© Copyright 2011, Russell D. Longcore. Permission to reprint in whole or in part is gladly granted, provided full credit is given.