Government CAN'T Fix It (never could)

This is a comment I sent to William Katz at UrgentAgenda (which I highly recommend).

Hi William,

One of the interesting aspects of this latest Obama elitist flap is something you’ve mentioned a few times in passing: How he seems to be convinced that the government is the answer. Government should provide jobs. Or maybe just money. And he thinks the government should provide jobs while taxing the hell out of evil corporations. Isn’t there an intellectual disconnect there that is just incredibly difficult to overcome?

Government doesn’t “create jobs.” Entrepreneurs create jobs. Expanding businesses create jobs. All government can do to help is to get out of the way; less government intervention via taxation and regulation. But the people promising jobs want MORE taxation and regulation. Plus, they want to increase taxes on the “rich”, who have the means to invest in entrepreneurial (risky) enterprises. Take more money away from them, and they’ll want to risk less. How can government tax the sources of jobs more, and expect more jobs to be created?

Or, is Barack (and Hillary too) really saying that the pathetic losers in industrial states that have declined have only one hope, and that is that the government will take care of them, because they don’t have the drive, the intellectual capacity, the creativity, or whatever else it takes to create a better life for themselves. In most cases in the industrial states, the problem has come through government (high corporate tax rates and/or regulation), or through a quasi-government style anti-corporate bureaucracy called a “union” that has made it impossible for an industry to compete in a global market (or even a national market) while conducting business in that state.

My family comes from Hibbing, MN, once home of the world’s largest open pit iron mine. The unions killed the mining industry in Hibbing, because wages and benefits kept rising for workers who had less and less incentive to work or accomplish anything. Wages went up, productivity went down, and suddenly it was cheaper to import steel than pull it out of the ground in northern Minnesota. Hibbing nearly died (rescued only by the fact that it’s surrounded by beautiful lakes where people love to vacation in the summer).

The only positive thing the government could have done to help solve the problem would’ve been to act on the side of the steel industry by nullifying the union contracts and allow the companies to pay only those workers who were productive a good wage, and make the business competitive again, meaning that workers had to compete to be perceived as the most productive and the most deserving of the high wages, and the companies could have again made American steel competitive in the global marketplace (certainly competitive for the U.S. market).

I just find it interesting that people like Barack and Hillary think the government is the answer, when government has NEVER been the answer except when it gets the hell out of the way. How can they look at world history and still sell the proposition that a large unwieldy government bureaucracy can be the answer to anything? Particularly in the area of economics where creativity and competition is the only thing that truly drives expansion.

Thanks for you time and your blog. I really enjoy it.