Thursday, June 30, 2011

Getting the economy backwards

President Obama got it backwards, at his press conference. You don't use tax revenue (collections) to create jobs. Collecting revenue destroys jobs, it always has. The more you collect (the higher the tax rate), the more jobs you destroy.

You destroy jobs when you increase the cost of hiring someone, that should have been obvious decades ago, but I guess the news hasn't gotten to Harvard Law School. I bet B. Hussein Obama could have gotten a straight answer from the Business School at Harvard, but the Harvard Business School doesn't talk about socialism as much. Business schools tend more toward making capitalism work well.

For the government to get more revenue, they need to get more people working. See, businesses don't pay taxes, they collect them. Any tax the IRS takes from any business increases the cost of doing business, which means that the business charges its customers more, or has to fire an employee or three, so that it can show the owner a profit. Or the business moves out of town (out of the country), or closes.

This also happens when you make regulations that cost the business, such as the EPA's grand "let's shut down the energy plants by making them too expensive to build and operate" scheme. Burning coal and oil don't put as much CO2 in the air as the swamps (protected wetlands, many of them) put out methane, as methane is much more green-housey than CO2. Well, and then there is the whole Brazilian effort to tear down the rain forest to grow "sustainable" ethanol, and then China is busy stripping the rain forests of Asia for lumber and charcoal to heat homes and cook meals. Tearing down old-growth forests, now, seems to this farm boy a pretty sure way to change the "climate".

After the profligate oil and coal burning, not to mention gunpowder use of the 1940s (WWII), how did it turn out that the 1950s were reputed to be the mildest decade on record, if putting out CO2 is supposed to de-stabilise the atmosphere?

Take a million bucks. Spend it on entitlements, to, say, a thousand people. How many jobs did you create, outside the bureaucracy of administering the plan (requiring more tax spending to pay for careers, facilities, benefits, and pensions)? Now take another million bucks, not collected as taxes, from, say a big company. How many jobs are not threatened? Maybe four, maybe fifty, depending on salaries and benefits.

The US Government cannot spend money that creates a job, that doesn't dismantle the ability of American employers to maintain or create more jobs somewhere else, not when they tax employers.

Either President Obama lies when he says he wants to use the government to create jobs, or he is just plain ignorant. I am sure at least one person has been able to describe what increasing taxes means to jobs growth or jobs lost. So is it lies, or is it refusal to hear the truth?

President Obama yesterday held a so-called press conference, All questions were pre-approved, the reporters asking were allowed, by name, to participate in a pre-determined order. It sounded more like a rehearsed press release/propaganda presentation/re-election speech.

And B. Hussein Obama trotted out the waste of the corporate jet again. Like his disparagement of the ATM machine, the corporate jet doesn't represent too much profit -- it represents the jobs of the folk that built and maintain that plane, that operate it daily. And it represents, all too often, a cost savings to the company. I mean, corporations exist to pay profits to the owners, and spending too much on anything from CEO salaries to jets, etc., can be expected to get the company in trouble with investors.

When government increases the costs of corporations and other businesses by collecting taxes, by increasing regulations and the minimum wage, they increase the amount of money that that business has to take in, that comes from the economy. Which leaves the customers of that business, and all other businesses, with less money to pay taxes and live comfortably.

And that means raising tax rates, especially for those in business or wealthy, make taxes harder to pay for the working people and middle class and poor.

I could wish that the American President didn't sound like a college protestor from the 1960s, with the Marxist change of "destroy the military industrial complex". Because this President is doing what the anti Vietnam War protestors advocated. And that Marx prescribed, to prepare a resisting culture for Communist rule. Or even a Chicago gang boss would want to make himself rich.