The Job Creators

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Cosima___J
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The Job Creators

Post by Cosima___J » Sat Dec 17, 2011 11:12 pm

I've always like John Stossel. He cuts through the fog and presents a clear picture for everyone to understand. Here is his latest:

How 'Job Creators' Are Fighting Back
By John Stossel

Published December 17, 2011

Some politicians claim that politicians create jobs.

Senate Majority Leader Harry Reid says, “My job is to create jobs.”

What hubris! Government has no money of its own. All it does is take from some people and give to others. That may create some jobs, but only by leaving less money in the private sector for job creation.

Actually, it’s worse than that. Since government commandeers scarce resources by force and doesn’t have to peddle its so-called services on the market to consenting buyers, there’s no feedback mechanism to indicate if those services are worth more to people than what they were forced to go without.

The only people who create real, sustainable jobs are in private businesses -- if they’re unsubsidized.

Some CEOs are upset that people don’t appreciate what they do. So they formed a group called the Job Creators Alliance.

Brad Anderson, former CEO of Best Buy, joined because he wants to counter the image of businesspeople as evil. When he was young, Anderson himself thought they were evil. But then he “stumbled into a business career” by going to work in a stereo store.

“I watched what happens in building a business. (My store,) The Sound of Music, which became Best Buy, was 11 years (old) before I made a dollar of profit.”

In 36 years, he turned that store into a $50 billion company.

Tom Stemberg, founder of Staples, got involved with the Job Creators Alliance because he’s annoyed that the government makes a tough job much tougher.

He complains that government mostly creates jobs -- that kill jobs.

“They’re creating $300 million worth of jobs in the new consumer financial protection bureau,” Stemberg said, “which I don’t think is going to do much for productivity in America. We’re creating all kinds of jobs trying to live up to Dodd-Frank ... and those jobs don’t create much productivity.

Now, Stemberg runs a venture capital business. “I helped create over 100,000 jobs myself," he said. "Pinkberry and City Sports and J. McLaughlin are growing and adding employment.”

To do that, he had to overcome hurdles placed in the way by government.

“All that we get is grief and more hoops to jump through and more forms to fill out and more regulations to comply with,” complained Stemberg. “Fastest-growing investment segment in venture capitalism: compliance software,”

Compliance is the big word in business today. Every business has to have a compliance department. But resources are scarce, so these departments suck away creativity. It’s one reason that these successful businesspeople don’t think they could do today what they did in the past.

Mike Whalen, CEO of Heart of America Group, said he got started with loans from banks that took a chance on an unknown: “It is not an underwriting standard that can be dictated by Dodd-Frank with 55 pages. It’s kind of a gut instinct.”

But John Allison, who built BB&T Corp. into the 12th biggest bank in America, says that “gut instinct” is now illegal.

“It would be very difficult to do what we did then today. It was semi-venture capital thing. The government regulations (today) are so tight, including setting credit standards, particularly since the so-called financial crisis and since they ... changed the credit standards in the banking industry, making it very hard for the banks to finance small businesses.”

These successful businessmen realize that in one way, they profit from the regulatory burden. They can absorb the costs. That gives them an advantage over smaller competitors.

“Somebody who wants to compete with us can’t because we can afford to hire the guys that can read this stuff and to keep us in compliance with the law. They can’t,” Anderson said.

Politicians rarely understand this. One who learned it too late was Sen. George McGovern. After he left office, he started a small bed-and-breakfast and hit the regulatory wall he helped create. Later, he wrote, “I wish during the years I was in public office I had this firsthand experience about the difficulties businesspeople face. ... We are choking off business opportunity.”

Wish they learned that before leaving office.

http://www.foxnews.com/opinion/2011/12/ ... ting-back/

lennygoran
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Re: The Job Creators

Post by lennygoran » Sun Dec 18, 2011 6:36 am

>The only people who create real, sustainable jobs are in private businesses -- if they’re unsubsidized.<

I don't fully agree with this--what about government employees working at the local levels of government--I believe that's the biggest segment of government employees--jobs in public transportation, police, firemen, the bureaucracy, etc. Our cities and localities are hurting and a lot of it has to do with thoughts like that statement made above imo. Regards, Len

John F
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Re: The Job Creators

Post by John F » Sun Dec 18, 2011 7:57 am

The Republicans and their talking-head apologists would have us believe that all or most of the wealthiest 1% are "job creators," but I haven't seen any statistics to bear this out. Indeed, from various articles and editorials I've been reading recently, only a tiny fraction of small business owners make enough money to get into the elite 1% - and only a small fraction of those in the 1% earn their fortunes through ownership of companies which actually have been creating jobs over the last decade or so.

Intuitively this makes sense to me - indeed, it's what I've been thinking all along. But I'd like to see impartially gathered and soundly evaluated statistics to support or refute the Republican assertion. If there are no such statistics, then there would appear to be no objective basis in economics for the Republicans' claim, and no good reason not to raise taxes on the wealthy who can so readily afford to pay them. Or is there a non-economic argument that has been overlooked?
Last edited by John F on Sun Dec 18, 2011 8:12 am, edited 1 time in total.
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jbuck919
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Re: The Job Creators

Post by jbuck919 » Sun Dec 18, 2011 8:09 am

Excessive barriers to small-business entrepreneurship are a real problem in some states including New York, and probably do have some impact on job creation. However, the author of this piece is intentionally identifying that particular situation with an agenda of small government and across-the-board deregulation. The Germans have a saying for it: das Kind mit dem Bade ausschütten.

As far as "real, sustainable jobs" are concerned, anything one does in the way of work for which one is paid is a real job, and the current global economy is offering numerous examples of how the private sector also offers little promise of a sustainable job. Nobody thinks that a government jobs program should be a guaranteed permanent living for anyone. The point is to get people to work (on something that needs to be done anyway) so that they have money to spend so that the private sector can get into high gear and start hiring so that there will be enough paid workers putting tax money in government coffers to continue infrastructure projects so that, etc., in the opposite of a vicious cycle. A jobs program is intended to give things a boost when if nothing is done, there will be, as there is now, an indefinite period of unacceptably high unemployment. Don't blame the entire inability of the private sector to create all these jobs on the fact that living_stradivarius ran into disincentives to a start-up in New York.

There's nothing remarkable about it. All one has to do is hit the right keys at the right time and the instrument plays itself.
-- Johann Sebastian Bach

Ricordanza
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Re: The Job Creators

Post by Ricordanza » Sun Dec 18, 2011 8:11 am

lennygoran wrote:>The only people who create real, sustainable jobs are in private businesses -- if they’re unsubsidized.<

I don't fully agree with this--what about government employees working at the local levels of government--I believe that's the biggest segment of government employees--jobs in public transportation, police, firemen, the bureaucracy, etc. Our cities and localities are hurting and a lot of it has to do with thoughts like that statement made above imo. Regards, Len
In the world of John Stossel, the public sector is evil. Just consider the language he uses for the government, just dripping with contempt:
Since government commandeers scarce resources by force and doesn’t have to peddle its so-called services on the market to consenting buyers, there’s no feedback mechanism to indicate if those services are worth more to people than what they were forced to go without.
All the activities you list, Len, public transportation, police, fire, and others you don't list, education, child protection, building inspection, etc., are all considered "so-called" services by Mr. Stossel. And what about consumer protection? Well, that's another evil, since it kills productivity.

lennygoran
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Re: The Job Creators

Post by lennygoran » Sun Dec 18, 2011 8:32 am

>you don't list, education, child protection, building inspection, etc., are all considered "so-called" services by Mr. Stossel. And what about consumer protection? <

Yes I'm so glad you adding those! Regards, Len

Dennis Spath
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Re: The Job Creators

Post by Dennis Spath » Mon Dec 19, 2011 6:11 pm

Those so-called "Job Creators" would become highly motivated by an increase in their Tax Bracket, as their accountant explained the Tax Benefits of expanding locations and/or hiring more employees....thereby increasing operating expenses and capital investment writeoff opportunities which serve to reduce taxable net profit.

The same is true for a proposed "Surtax" on those with taxable incomes greater than one million a year, which would work equally as well to motivate new hires and new capital investment in order to get the Taxable "Net" of those threatened high rollers under a Million. Not a bad problem to have, really, although I sure wouldn't wish it upon any of our friends here at CMG Forums!!
It's good to be back among friends from the past.

RebLem
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Re: The Job Creators

Post by RebLem » Mon Dec 19, 2011 6:32 pm

lennygoran wrote:>you don't list, education, child protection, building inspection, etc., are all considered "so-called" services by Mr. Stossel. And what about consumer protection? <

Yes I'm so glad you adding those! Regards, Len
If you think it is ideal to have a country without building codes or building inspections, you should move to Haiti.
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