Sunday, December 1, 2013

The Reason Dismal job Creation Will Continue

Expect dismal job creation to continue, today many forces are coming together that tend to make this the new normal. Over the years as we have become able to produce more with less labor we have seen the fruits of our work improve the lives of many people. Today we enjoy being able to have far more goods and luxury's then at any time in history, but soon we will find ourselves competing with robots for jobs and see many of our options for earning a living swept away. This comes at a time when America looks back at all we have built in recent years and suddenly finds all these things aging and increasingly calling for expensive maintenance.

It does not help that the President and most of Washington lack solid backgrounds in both business and the economy. Obama has displayed this on more then one occasion such as when he validated the job crushing model of "job shifting" by visiting and praising a new Amazon distribution center and by giving kudos to the way Amazon's website works to fill customer needs, this constitutes free advertisement for a damaging business model. While trying to aline himself with big business and what appears on the surface to be a success he cuts away at those that do the real job creation. When we cannibalize and promote one sector of the economy at the expense of another we harm our ability to grow and compete.

Today many people forget that small business is the backbone of America, this is the real job creator and the place where people "with skin in the game" do real work. This is where useful training takes place, where skills are learned and honed. Main Street was built by locally owned family businesses that competed on a level playing field. Giving small business a fair chance has added diversity and strengthened the fabric of our communities.  We need a private sector that builds and maintains things here in America, a private sector developed and grown from small business and "hands on owners" that are rewarded for the risk they take. Real job creation will languish until credit is again given to this key sector of the national economy and the vital resources they provide. 

Over the last several decades a "bigger is better" mentality that often yields huge competitive advantages to larger firms has taken hold. This business model also contains several flaws and is unbalanced.  It tends to suck all the air out of the room killing its competition and using them as its primary fuel for growth. If people do not produce and earn money they cannot consume or pay taxes. It is easy to connect the dots on how this relates to big government and promises made to providing certain benefits to people through what is known as entitlement programs. When things become unbalanced the system can no longer be sustained.

The so called "new economy" risk being no more than a transfer of wealth using a deficit spending government as the conduit. An economy fueled and based on a 52 billion dollar infusion into things like the NSA collecting data on average Americans does little to create sustainable jobs or promote long-term growth. Programs where educational money is spent on providing third grade school children with I-Pads made overseas is not the ticket either. Fact is the whole concept of buying an wireless phone or computer from China then spending on a monthly data plan tend to transfer money into an area that does little to promote a healthy economy.

Many people fail to internalize and consider that the "past cost" of government if not paid results in a carrying cost that is also known as interest on the debt. This can become substantial if allowed to accrual. When it rises beyond a certain point it begins to act as a drag on future growth and the ability to move forward. Often how we view the economy is based on prior performance, if it is not growing each year the momentum is gone. The exploitation of small business through a constant flow of new laws and regulations from Washington comes at a high price that we will be paying for many years.

  Footnote; Your comments are welcome and encouraged. If you have time check out the archives for other post that may be of interest. Below is an article that focuses on how society must allocate the rewards of our labor, and also a post about how robots are replacing workers.

1 comment:

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