I think it’s time to end our 10-year experiment with faith-based economics. This country is in desperate need of jobs and the invisible hand of the marketplace has been, pun intended, a no-show. The stock market has had so many twists and turns this week that Six Flags could do well to name a new attraction “The S&P 500.” This economy needs some direction and it needs a few million jobs right now.
Businesses are sitting on more cash than ever, with the lowest effective tax rates in 60 years and so little legislation coming out of Congress that regulatory “uncertainty” is a fairy tale invented by the U.S. Chamber of Commerce. Every check box in the arsenal of libertarian economics has been filled and still employment is stagnant. As great as this economy can be, it can't start churning out jobs until someone — or something — first primes the pump.
That something is the U.S. government.
The long-held belief that the government doesn't create jobs is one of those fallacies that, oft repeated, appears true. If we consider that the private sector hires when there is an actual or realistic expectation of demand for goods and services, which is what we are going through right now, businesses are going to sit on their hands for a while. No amount of regulatory relief, tax incentives or prayer is going to change that.
On the other hand, the U.S. doesn’t have to wait for demand to pick up before putting people to work. Discretionary employment, where jobs are created as a tool for economic recovery, is something that only government can pull off.
One of the ironies of this economic mess is that the only safe place to park money is in the U.S. treasury and we have rarely paid so little for the privilege of getting it. We could build freeways, high-speed trains, airports and green energy plants employing hundreds of thousands of people for quite some time and do so on the cheap. Not only would we pump much needed growth into the economy, growth that will help pay off that cheap money down the road, but we would end up with something we could really use.
I have yet to find a school or a bridge funded by a tax cut or a weakened safety regulation and I might not trust an overpass that was. But a freight transportation hub built with a government contract by a qualified contractor, designed by a California-based engineering and architectural firm, assembled by seasoned and well trained equipment operators driving John Deere earth movers manufactured in Ohio, with materials forged in Pennsylvania using money that costs peanuts to borrow from Wall Street investors who are too chicken to build anything themselves — that is a solution that works. Literally.
Being angry about the position in which we find ourselves is easy. Blaming the government for not fixing it, not regulating it or not having the foresight to prevent it is understandable. But neither helps. And no amount of begging or pleading “pretty please with a cherry on top” is going to get the private sector to create jobs without any evidence of strength on the demand side of the economy.
It is the one thing about government that libertarians and Tea Party advocates hate that has the power to turn this economy around. It’s size. In this case, size matters, and Uncle Sam needs to put on its size-50 American-made Thorogood steel-toe work boots and kick this economy square into shape.
MICHAEL TEAHAN lives in the Adams Hill area of Glendale with a clear view of the Verdugo Mountains so he can keep an eye on things. He can be reached at firstname.lastname@example.org.