- September 7, 2012
Are We Better Than Four Years Ago? THE BLS SAYS NO!
With both conventions concluded it appears that the Democrats won the battle of speeches. Beginning with the spirited keynote from mayor Julian Castro and continuing through Michelle Obama, Bill Clinton, Joe Biden and President Obama, the convention hall rocked to persuasive claims of: a) 4.5 million new jobs created b) a reinvented auto industry and 1 million jobs saved and c) plans to cut the deficit by $4 Trillion. But are these claims factual and are we really better off than four years ago?
Evidence shows the contrary. Our national debt just passed $16 Trillion for the first time in our history! Of that $1.16 T and $1.12 T are held by China and Japan respectively. Furthermore, the Bureau of Labor Statistics (BLS)http://www.bls.gov reported today that only 96,000 new jobs were added in August (67,000 less than the previous month) and the unemployment rate at 8.1% was the 43RD straight month of 8% or greater, which is an all-time record since record since BLS started record keeping in 1948!
Past U.S. attempts at big government and new society programs have mostly failed dating back to 1791 when our first treasury secretary, Alexander Hamilton, prodded the federal government to add about $18 million to our domestic debt of $65 million after taking on states’ debts from the Revolutionary War. Furthermore, they have failed worldwide, which is why the Soviet Union collapsed and countries like Greece are now in trouble.
Instead: what is needed is to think small, as in doing more to cultivate small businesses, which have historically generated almost 80% of the net new jobs and have produced 13 times more patents per employee than large firms according statistics by the Small Business Administration. Politicians cannot create jobs. When they try, they actually stifle jobs creation by draining scarce resources from the real jobs engine, small businesses (e.g. Solyndra).
Many of my clients are begging to add new jobs, but are scared away by all the red tape and uncertainty created by President Obama. His lack of business acumen rings loud and clear in his policies, which stifle the main job creator, small businesses.
If the government does want to help, one answer may be to substantially expand successful mentoring programs like SCORE (Service Corps of Retired Executives, a counseling arm of the Small Business Administration). It has a specific mission and a proven track record in instructing small business owners how to better succeed in their chosen field of endeavor. This unleashes the time tested “Invisible Hand” of Adam Smith to create more jobs, which will more quickly drive our economy out of its malaise than anything the government can do directly. Another is to focus on balancing the budget and drastically reducing our national debt, which is at dangerously high levels!
The alternative is to be cast into the abyss like Greece!