Thursday, September 01, 2011

Sanity, Ignorance, Ignorance, Sanity/Ignorance, Intrusion, and Intrusion with a Dash of Ignorance

How else can I describe the six cost-efficient ways that our ex-Governor and ex-First Gentleman have laid out to help this country create jobs?

We Michiganders are fully aware of the skill set that Jennifer Granholm and her trophy husband, Daniel Mulhern, brought to the Michigan statehouse.

Under Granholm's leadership the state became a wasteland of vacant homes and shuttered storefronts. The only good good news was that business was brisk in both the outbound moving van and Michigan Works! staffing sectors of the economy. For half of her time in office, Michigan led the nation in unemployment and was the only state in the union to actually lose population during the decade that contained her administration.

And this is the experienced perch from which Michigan's dynamic duo will point out to the rest of us 'six cost-efficient ways to create jobs.'

Before we explore the list, can we not at least ask an important question? If these two were so smart when they had tens of thousands of state employees and agencies at their beck and call, why didn't they use some of their expertise to, you know, actually help get Michigan's economy moving?

The answer to that question can be found within the six cost effective solutions they forward. They just don't get it--never have, and never will.

Here is the list.

1. Give global companies, which have parked more than $1 trillion in earnings offshore to avoid U.S. corporate taxes, incentives to "repatriate" those foreign earnings.
Of course, this is a borrowed stroke of genius from conservative economists and business leaders. One cannot plausibly argue with point one. It is the earmarking these two want to do with the repatriated funds that gives me pause.
2. Put half those proceeds toward a blockbuster "Jobs Race to the Top," modeled on the highly effective Education Race to the Top.
First of all, one would have to be two points shy of lucid to say the Education Race to the Top has been highly effective, but that is not the point. Secondly, has there ever been a scarier word than "blockbuster" ever attached to a government spending initiative?

Granholm and Mulhern do not recognize what private sector jobs are--they are a byproduct of a successful and profitable business, they are not the purpose of a business. Such failed logic is seen within the solar energy industry (one of the Mulherns' favorites) today where heavily subsidized companies are still going belly up because of the inherent inefficiency--not just the relative inefficiency of solar energy physics, but also because of the economics involved. As hard as it is to believe, solar industry leaders have been known to brag about their sector creating more jobs per Megawatt produced than any other energy sector. Hey dipsticks, this is not a feature, it is a flaw.

Imagine Henry Ford's success if he had tried to bring his product to market while employing more people per car produced than any of his competitors. (No, that an innovation of the UAW some decades later.) How many early model Fords would have been sold with such a claim to fame? How could the cars have become accessible to the American consumer if they were more expensive than any other car on the road? No, Henry went in the opposite direction and tried to produce more cars per employee rather than the other way around.

The solar energy industry has everything exactly bass ackwards.

If you really want to incentivize job creation, make profit more achievable. Leave cleverly disguised intrusions into the free market at home.
3. Invest the remaining proceeds toward capitalizing an infrastructure bank, broadly defined — construction for roads, bridges, technology, grid upgrades and schools.
Great, then lets spend the rest of the windfall in the same manner that was wasted on our other stimulus boondoggles--namely slathering money onto the Democrat Party's favorite monolithic voting constituency. But hey, if the hundreds of billions of dollars that have already been spent on supporting union jobs haven't been successful, what could a few billion more hurt?

Why can't we just use the windfall to pay down our huge debt? That would lower our debt obligations, strengthen the dollar, lower the costs of commodities, and maybe make it possible for me to eat a hamburger once in a while down at the restaurant. Why do socialists believe that every boon to the economy has to start with the spending of billions of taxpayer dollars?
4. Lower the nation's corporate tax rate from 35 percent to 25 percent, and pay for it by streamlining the tax code and eliminating loopholes.
America's corporate tax rates are among the highest in the world. Even the socialist paradises of Europe have significantly lower income tax rates on corporations. So, what could my beef be with this?

It is once again a complete misunderstanding of economics. Lowering of tax rates helps grow the economy--as such, they all but pay for themselves. Letting anal retentive Democrats rewrite tax laws in order to pay for tax cuts will not turn out well. Just cut the tax rates to a level that is competitive with the rest of the world, and watch our economy grow.
5. Modernize our unemployment and workforce training systems.
Government funded job training programs are misguided, inefficient, and completely outside the responsibility of government.

How can Granholm and Mulhern ever possibly discern what jobs our evolving economy will need unless they also believe they can nudge this economy toward their own favored outcome? No person, not even a brilliant Harvard educated Canadian lawyer, can interject herself into an economy and determine what industries of the future will be successful. Corn ethanol anyone? Solar panels?

No, lets let consumers determine what products they will want in the future, and lets let business provide those products and train their own workforces to produce those products.
6. Adopt a federal clean energy standard to proclaim to clean energy businesses — which can locate anywhere — that a market exists here for their products.
And here you have it. Granholm and Mulhern believe the best way to achieve inexpensive job creation is to further regulate the American economy so that inefficient energy sources can compete with efficient ones. I wonder how much that will cost.

It is just another angle to the failed Keynesian principle that you can create wealth by destroying it.

I will not be buying the book by Granholm and Mulhern. Its a brand new book certain to contain glossy terms to describe the same tired old ideas. Ultimately, all we really need are the proper puppet masters to pull the right strings.

Granholm and Mulhern should be available shortly after the book is released.

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