Seeking Liberty

Liberty is the Fruit from Which All Progress Grows

Reverse Course to Right Our Economy

Can we just admit that the Stimulus was an $800 billion mistake that did absolutely nothing to help the economy or stimulate jobs?

Can we admit that Keynesian economics are, at best, a scalpel being wielded as though a they were a machete?

Can we admit that no centralized government planning will ever lead to greater economic prosperity?

Because if you really can’t admit that, you really haven’t been paying attention.

For the past several years, we’ve been told that America needs more regulation, that the wealthy need to pay their “fair share,” that free market economics aren’t enough any more.  We’ve been told some companies and some banks are just “too big to fail,” and that we the taxpayers have to step in and “save” them from their failures.  We’ve been told that the managers of these companies, even the ones that have righted their boats, don’t deserve the high levels of compensation they earn.  That if these wealthy people weren’t so greedy, we’d all have more.

The media and the Democrats will tell you that the the CEOs and senior executives of these big corporations are giving themselves big bonuses and big pay-raises.  There’s just one problem with that concept:CEOs and senior executives don’t set their own pay.  They negotiate their payment contracts with the Board of Directors, who are elected by the shareholders (that is, the company’s owners) to represent them.  Lower-level executives, particularly senior managers and sales executives, negotiate with the senior management.

In every case, executives and other employees get bonuses based upon performance.  Meet goal “A” and get so much bonus.  Meet goal “B” and get so much more.  Goals, as anyone who has just passed an exam on Organizational Behavior or Strategic Management will tell you, must be both reasonable and achievable, but they shouldn’t be too easy, either.  The Obama Administration and the Democrats made a big deal about the A.I.G. bonuses, but the fact is those executives achieved their stated goals as set forth in their contracts.

In an environment where pay scales become a political football, what sane business executive will look at hiring more people?  Rather than helping the jobs environment, all this focus on executive pay scales and profits (which are, after all, the whole reason to start a business) has left business managers uncertain about what to expect in the future.  Add in taxes on health insurance plans, employer mandates and the impending expiration of the last decade’s tax cuts, and business managers simply see more and more costs being added to their bottom line.

This is not an environment where business managers and owners want to hire people.  This is a period where they want to reduce overhead.  The economy is flagging and the government seems to want to punish any form of business success.  The president has proposed tax credits for small businesses that hire new employees; unless this tax credit is both permanent and dollar-for-dollar, it will not do any good.  Businesses do not hire workers to get tax credits.  They hire workers to do profitable work.  If these businesses do not feel their profits are safe from the government, they will not hire those workers.

It is past time to look to the government for new laws and new regulations and new spending.  Such activities continue to fail our economy and the American people.  Offering hope and change simply isn’t good enough: People want jobs, and we know how to get the economy moving again.

Reduce uncertainty.  Reduce the overhead that is government taxation.  Eliminate the unnecessary regulations.  Stop the rhetoric that demonizes business leaders and owners.  Stop using tax policy to punish success and “redistribute wealth.”

The American people need real solutions, not socialist dreams.  Real economic reforms, not more arbitrary regulation.  Real change, not the Chicago Machine.

One might call it “proactive passivism:”  The government acts in a proactive manner to get out of the way of business.  When business managers and owners see the government is going to reduce its burden upon them, reducing their overhead and increasing the certainty of the system, they’ll begin to invest in their businesses.  A while after that, they’ll begin hiring new workers.  If we wish to right our economy, we must make our political environment one in which institutions and individuals feel comfortable investing.

Originally posted at RedState.

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