Now that government is getting all the press we see a reversal of the process by which jobs are created. The government is dictating what kind of jobs and who will be favored as it votes money for its favorite constituents. This is not how an economy works. This is how money chasers instead of entrepreneurs wreck an economy.
A person that starts and runs a business has an idea and designs a way for that business to thrive and grow. That person figures out how the business will make money and presents this idea to his lender, if he needs financing, and when approved sets the plan in motion.
Contrast that with the government approach. Money is appropriated for projects determined by government to be desirable ( for political advancement) and then doled out to those who don’t care about what kind of business they run as long as they can get money from the government to get started. The thought and the design are no longer a part of the process as the new owner must adjust to whatever some politician has determined the money is can be used for. For instance money going to certain auto manufacturers must include automobiles that meet new government regulations. Whether the cars will sell or not is not an issue as the funding is the criteria. Likewise bankers who get money from the government must make the loans the government wants them to make whether the loans will be repaid in the banks judgement or not.
This approach to job creation and business destroys the entrepreneur and rewards the money chasers. Money chasers are ambitious welfare seekers who capitalize on government handouts for business creation and sell their soul for the handout. They have no driving passion to create a vision of a product or service but simply a way to get some free money. As there is no desire for a reputation based on a quality product or service of personal standards, only the adherence to the government standards for funding is paramount.
This is why the “stimulus” nonsense the government is foisting on the nation is bound to fail. What we will end up with are money grabbers moving from project to project as the money gets shifted from one area to another. As the money voted for bridge and road repair ( doled to the states) dries up, the move will be to the next favored category of government stimulus (whatever that may be) and the money chasers will move in that direction simply on the incentive of getting the money they now have the connections and money acquisition expertise to acquire. Quality goods and services will be rare.
The method outlined where government does not set the standards and the products and services is the way of the free market. This is also why the government tries to trash the virtues of the free market and blame economic distortions the government has instigated on a lack of regulation. Look at the nations of Zimbabwe ,Iceland Venezuela and tell me the free market is what ruined these nation’s currency. The collapse of the government of Venezuela demonstrates quite clearly who was at fault and in justice who should have collapsed.
The method of creating business without government interference is what leads to surpluses. Government created jobs and businesses only lead to deficits. The government has no surpluses and necessarily has to take money from the surpluses of the entrepreneur’s coffers. This reduces the profits and capital of the entrepreneurs and transfers it to the money chasers and the dole recipients. This is a lose lose strategy that suits only the politicians, the money chasers and dole recipients. But only for a limited period of time. Eventually the deficit spending turns into roaring inflation and as the money chasers dodge and hide to try to keep the funds they have acquired the government not knowing what else to do either tries to stop inflation, ignore it, not report it accurately or spend with no regard of its coming existence. That is what we are seeing the government doing today except for trying to stop inflation.
No one is saying inflation is not coming. There is only a blind hope that it will not be soon and will not be as bad as it most probably will be. This is like the child wishing he won’t get punished even though he knows he will be caught for stealing from the cookie jar. It is a false hope and it is cowardly to pretend the law of cause and effect will be suspended. Our political leaders know the time is short but as always they hope it will not arise during their tenure in office. The next election is the only benchmark they recognize. Meanwhile they shudder in fear they will see the mobs of Venezuela arise in this country. They are willing to live with the chance it won’t happen because they haven’t seen it yet and they have always spent beyond their means, encouraged by their disillusioned economic advisors and their apathetic constituents.
One could say it is time for America to wake up and shake up the political charlatans who promise what they can never deliver but that its a futile cry. Americans have become passive and accepting of the most outrageous government dictates and like the Venezuelans will only point the finger where it belongs when there is nothing left to blame the economic crisis on but the government which created it.
Americans could realize that government only screws up the economy and has no way to correct its distortions except to withdraw them. When the government proposed making housing affordable for all they could have recognized such an approach would distort the lending institutions and pulled back from what they knew would eventually make too many bad loans. They decided instead to hope that would not be the case and went full steam ahead with a stupid plan that was doomed to failure. The leading newspapers endorsed this stupid plan as did many of the major mainstream media. Those pointing out the dangers were scoffed at and ignored. Watch Barney Franks defense of Fannie Mae and Freddie Mac for conclusive proof.
The promise of jobs is an empty promise by the government. The government is not advocating encouraging entrepreneurs to fulfill their dreams. They are advocating job creation around government priorities most of which are simply spending schemes for political pandering.
The CCC jobs are gone and so will the “shovel ready jobs” be gone as soon as inflation tears a hole in the purchasing power that will disappear.Tags: Entrepreneurs political pull welfare