Government's job: stay out of the way

Jobs and WorkplacePoliticsCompensation and BenefitsMarketingOccupy Wall StreetWarren BuffettRepublican Party

For the current election cycle, "jobs" is the new black. It's the buzzword that transcends the left and the right. From the parties of Occupy Wall Street to the tea parties of last year, and from the Republican Party to the Democratic Party to the Worker's Party (which claims they are a right), "jobs" is the one thing everyone can agree on.

Trouble is, there remains much disagreement on the creation of said jobs. With so many divergent points of view converging around jobs, it's important to understand what a job is.

At its most basic, a job is a voluntary transaction between two entities — a buyer and a seller. It is a transaction that, when both parties live up to their expectations, betters both entities. The parties each agree to an exchange: the skill/talent/labor of the employee for the wealth/compensation of the employer, at a mutually agreed upon price. If it did not benefit each of them, they would not agree to the transaction. When the situation stops benefiting either party, either is free leave the relationship.

The question is, where does government figure into the job-creation equation? The president has proposed a $447 billion piece of legislation to "create jobs." Short of returning all the money to its original owners (with interest), the jobs bill will have very little chance of living up to its name.

Contrary to what the Worker's Party and some others declare, a job is not a right. The pursuit of a job is a right. At least, it should be. Unfortunately, the government seems most efficient at creating barriers for the transaction of jobs to occur.

The government has no money of its own. The only way it gets money is by confiscating it from others. In doing so, government diminishes the ability of individuals and companies to create jobs. Payroll taxes hinder the creation of jobs. Excessive business regulation and meddlesome permitting hinder the creation of jobs, no matter how well-meaning they may seem. Compulsory insurance and health care mandates — including the future threat thereof — hinder the creation of jobs.

Other government-sponsored barriers to job creation include the minimum wage law (which prohibits the poor from offering their services for less than the competition and thus gaining access to the employment ladder), and the criminalization of free-market activities regarding private matters (the companionship of prostitution, the mind-altering choice of intoxicants and the health benefits of unpasteurized dairy products).

Government cannot legislate the poor into prosperity by legislating the wealthy out of prosperity. It cannot tax the rich into creating jobs for the middle-class or poor. A job is a voluntary transaction that betters both parties. Very few people — including Robin Hood wannabe Warren Buffett, who made $63 million last year — choose to pay taxes voluntarily.

The government cannot create jobs because the government has a net negative effect on wealth; it cannot give anything to anybody that it does not first take from somebody else. (And government has a massive cost of operations.)

So, what can the government do to encourage jobs? It can remove the barriers that prevent or slow job transactions from occurring. Short of that, the government will almost always have a net negative impact on wealth, especially for the lower and middle classes.

If the president's proposed legislation spent all $447 billion on nothing but rolling back government regulations, simplifying the tax code or even paying Congress to stay out of Washington for the next 18 months, then the jobs bill might have a shot at living up to its name. Alas, it doesn't. And so while jobs is the new black, when you hear it coming from Washington, it should leave you seeing red.

Dan Reed is an advertising copywriter in Baltimore. His email is dan.reed@blakesleeadv.com.

Copyright © 2014, Los Angeles Times
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