In a capitalist society like ours, where the invisible hand is destined to be the regulator, is it not a contradiction for both presidential candidates to claim that they are going to create jobs?
They market to the American constituent their ability to generate economic growth, jobs and economic stability, when in reality this is the private sector’s job. Republican Mitt Romney and President Barack Obama do not have the institutional flexibility or political capability to force the private sector to generate economic growth. All they can do is create the conditions through their policies.
Change in the path of the national economy lies in the hands of multinational corporations, domestic private enterprise and small business. Today we vote for candidates who are powerless. When it comes to economic growth, we should actually be voting for CEOs and other private leadership.
The candidates are competing for political power. That is what is at stake here. They are competing for the ability to curve and influence the path of policy. Obama wants to win in order to tilt policy toward greater social equality through government intervention, while Romney want to alleviate the system from greater government regulation and control.
Neither of the candidates can impede the private sector from sending jobs overseas, since this is the natural path of the expansion of capitalism. The American market does not guarantee long-term growth to the private sector. It represents just a fraction of a global market from which they, and their competitors, want to capitalize on. It is a sad reality to know that in order for our national economy to achieve steady economic growth, it must rely on the expansion of developing markets across the world. This is the true nature of globalization, and it is a reality that our political candidates are not willing to share with us.
It is easier to claim that you are going to keep jobs in America and that you are the solution to high unemployment, than it is to publicly accept that you have no control over this unavoidable reality.
Both candidates cannot influence the private sector’s business decisions since these are based on market research, efficiency, consumer behavior and profit margins. Therefore the future of unemployment rates in the United States lies in the hands of private decision makers who are concerned about their bottom line and not about the future of the American citizen.
Political leaders may influence temporary economic growth and employment by investing in public works and national infrastructure. They may play with monetary and fiscal policy in order to generate temporary economic growth, and may even use war as a means to improve the national economy, but these are all short-term solutions.
The election comes down to what the private sector favors and who they see as a guarantor of their interests. For the past four years, the private sector has remained speculative, sitting on trillions of dollars in revenue, waiting for the right time to invest. It is clear that the private sector does not feel confident under an Obama administration, which means that Romney’s opportunity to shine is right around the corner. It all depends on the American constituent; does it want economic growth or social justice and greater income equality? If it is the latter, then Obama will win the election, but if it is just economic growth then Romney is the ticket.
No matter the electoral result, we will continue to see American jobs shipped overseas, and we will continue to experience high unemployment until the private sector decides otherwise. Not much change will happen and we will continue to be the core of this ongoing capitalist experiment.
Stefano Tijerina is an adjunct instructor at the University of Maine and Husson University. He teaches Latin American history, Canadian history, U.S. history, policy and political economy.
Not a single mention of Government R&D funding in things like bio-sciences that the private sector is too risk averse to invest in, but ends up profiting from on the back end? I mean, in 2011, NIH investment by the federal government supported 432,000 jobs and generated $62.13 billion in economic activity.
My college freshman economics textbook had a more nuanced understanding of the governments relationship to economic growth than this piece.
Exactly!
Like with every issue, the President merely sets the tone. He cannot wave a magic wand. However, setting the right tone can have the same effect.
We need a president who supports businesses and celebrates success, not one who sues businesses, creates uncertainty with his policies, promises to raise taxes and demonizes success.
We also need a president who wants lower gas prices, not one who blocks pipelines and installs an Energy Czar who believes “gas should be $7 a gallon”.
We need a president who understands that jobs, not taxes, create revenue.
Do you know anything about the Pipeline? One, there isn’t even a route yet, just a planned area they want to go. Also Nebraska doesn’t want it. The legislation the republicans want to pass would force Nebraska to take the pipeline. So much for state rights. The president has already approved the building of the Pipeline, where they actually have a route planned out, not just well we want to go in this general direction. Also, none of that oil has to go the USA. It can all go over seas or else where. Most likely China, especially if they end the one child policy.
Edit: Cheesecake1955 reply was very interesting and seems like my data is out of date.
You are incorrect or are relying on old data.
Initially the route in Nebraska was a problem as it was planned to go over an aquifer, it has been rerouted.
http://www.upi.com/Business_News/Energy-Resources/2012/11/02/Nebraska-reviews-Keystone-XL-reroute/UPI-80351351861062/?pvn=1
My understanding is that all states have already had approvals done. The only thing the feds need to concern themselves with is the International border… about 100 yards of international legalities.
Oil going to the gulf has a destination for primarily the USA as most distribution is HQ’d in Texas. Look at the current pipelines.
That which is not for domestic use is destined for South America and Europe. China is a last ditch customer as the transit routes for supertankers take the Cape Of Good Hope route. Supertankers do not fit in the Panama Canal. Hence little to no oil makes it to China from Texas.
Thanks for the Article, its very obvious I need to get caught up on this. Thank you.
NP
The current president has lowered taxes. U.S. oil production has boomed under his watch. How he has not supported businesses, demonized success, and sued business (who have not deserved it) remains unknown by your comments. As for the elusive uncertainty, what wilting flower of an entreprenuer would allow presidential policies (which you may cite if possible) to guide his investment strategy remain also to be seen. This in an era of huge corporate profits. Most likely these fainting investors live in an alternative universe where the other presidential candidate’s policies are certain.
Mr. Tijerina is mistaken in his belief that presidents cannot create jobs. During national economic emergencies when the private sector has lost it’s ability or impetus to employ large numbers of the unemployed, temporary federal works projects along the lines of the CCC and WPA can and should be proposed by the executive. The fact that Obama has failed to adequately address the huge unemployment problem with similar programs, though GOP intransigence at every turn takes blame as well, should not be taken as proof that it is beyond his control.
Obamacare was the biggest tax increase in history and nobody knows what effects it will have or how much it will end up costing people. These taxes will hit the middle class the hardest, by forcing them to purchase insurance that is deemed to be expensive enough (“qualified premium”) by some government bureaucrats. (Uncertainty.)
Obama has promised to raise taxes on those who make over $200,000 per year. Since this will generate very little revenue, if any, he will be forced to raise taxes on the middle class. (Uncertainty.)
Obama has stated that he will push for cap and trade policies to fight global warming. Nobody knows how this would affect the economy. (Uncertainty.)
Obama sued Boeing to stop them from moving a factory to South Carolina. They then sued Gallup in an attempt to change their polling methods. He also sued Arizona because he didn’t like their immigration ideas. Who will he sue next for political reasons? (Uncertainty.)
Obama has stated that gas prices should be “gradually higher” to help wean people off oil. Why would anyone expect him to support any policies that might lower gas or heating oil prices? (Uncertainty.)
Everything that well lubricated weathervane Mitt Romney has ever said ever about anything (Uncertainty).
If no one knows how much Obamacare will end up costing (or saving) people, how can it then be assumed to be the biggest tax increase in history?
Since Obama extended all the Bush tax cuts in 2011, how can you assume he won’t conceed to GOP pressure and do it again, much less raise taxes on the middle-classs?
Since no one knows how cap and trade policies will effect the economy, how can you assume that it would be necessarily bad?
The Boeing suit was dropped by the NLRB. The Arizona immigration law has probably hurt their economy as similar legislation has hurt Alabama’s. Regardless, lawsuits that protect civil and labor rights are not bad for the economy if they help workers.
Oil is a limited resource. It’s increasing scarcity will inevitably lead to price increases even without government intervention. A long-term national energy policy that acknowledges this fact and promotes solutions that will make the transition to a non-petrolem based economy easier on consumers makes sense. China is eating our lunch in this regard.
In every case above, if the reverse is true and Obama’s taxes and policies are predictable to investors they should be able to factor them into any investment. You don’t seem to be bemoaning uncertainty as much as demanding certainty and alternative policies. Any investor who needs that qualifier to release his money wants a rigged game.
Obama ABSOLUTELY demonizes success. He seems to loathe the wealthy(remember, they “didn’t build that.” He hates them and wants to tax the people who already pay most of the taxes in this country even more. He has ZERO credibility and ZERO credentials to be president.
“We also need a president who wants lower gas prices, not one who blocks pipelines and installs an Energy Czar who believes ‘gas should be $7 a gallon’.” – Tag
Or found Osama?
Did you think Bin Laden would not have been found if somebody else was president? Really?
Gas SHOULD be $7 a gallon. Your private car is the most subsidized form of transportation out there, and people whine about Amtrak when a single train can take the place of 100+ drivers. If gas prices were allowed to rise to reflect the true cost of driving, more people would opt for the more sensible (and less expensive) options of carpooling, bicycling, walking, and public transportation. And before everyone jumps all over me, yes, I realize that in rural areas people need cars. But rural America is no more or less the “real” America than is downtown Bangor, or Manhattan, for that matter. On average, we drive too much, and the market has been rigged for too long to make driving seem cheaper than it is.
The purpose of governmenrt is NOT to ensure businesses succeed (I know some want it to be and wish it to be) .The purpose of government is to protect and promote and serve the best interest of the people. ( the REAL human people).Sometimes the interest of business and the people are in alignment; sometimes they are in conflict with each other. YES I expect government TO regulate TO protect me against the unscrupulous such as the financial sector, BP etc .
I didn’t realize Fox News was posting here, good to know.
It’s talking points mad libs at this point.
This garbage was written by a teacher???? No wonder kids know nothing about economics. The first sentence tells you this will be a fantasy piece. “In a capitalist society like ours, where the invisible hand is destined to be the regulator, is it not a contradiction for both presidential candidates to claim that they are going to create jobs?” The “invisible hand”? Is this like the headless horseman. Halloween Goulies. No such thing exists.
Presidents create jobs in many ways but they all boil down to increasing demand both consumer and government. No Dolly, changes in tax policy do not increase demand, grow the economy, or create jobs. Demand and only demand does. Presidents set policy that determines the ways in which trade are carried out with foreign countries. A free trade policy puts people out of work. Fair trade, we get as much as we give, grows the economy and jobs. A President hires several million workers. And a President with Congress sets the conditions under which commerce exists at all. A President with Congress controls to what degree business can shift its cost to society as a whole.
This article is either the most ignorant description of the economy or dumbed down to the point that our Governor might understand it. In either case is grossly oversimplified.
I find myself agreeing with much of what you are saying with a caveat. The government cannot create private sector jobs but they can prevent them from being created.
I have been say that all the time that the only companies will hire is if there is a demand for there product . All the tax breaks will not help all it does is play one state againt one another
You are correct, but that demand isn’t always created by a consumer buying something off the shelf. That happens later in the business cycle. Business to business sales is what needs to happen first and governments needs to stay out of the way of that happening.
It doesn’t matter whether demands begins here or there. Jobs aren’t created by tax cuts for “job creators”. That’s what’s being pushed now and it’s a lie.
Like Solyndra and all the other (puke) green industrys that Obama funneled campaign contributions back to?
Personally I would just as soon let business do its thing free of government interference. Making taxes equitable can wait but needs to be addressed in order to compete globally.
Well we need a funded government in order to compete globally as well. Your claims seem to be bunk as no one is proposing anything higher than what we had going on just barely over 10 years ago.
In the meantime taxes world wide have been reduced making us the highest taxed country in the world, save a couple non-industrial African countries.
In the current moment you’re being dishonest as you’re speaking about tax rates and not the actual effective rates. Our corporate tax rate in that case isn’t even near the highest. And corporate profits are the highest they’ve been in 60 years.
http://online.wsj.com/article/SB10001424052970204662204577199492233215330.html
“Total corporate federal taxes paid fell to 12.1% of profits earned from activities within the U.S. in fiscal 2011, which ended Sept. 30, according to the Congressional Budget Office. That’s the lowest level since at least 1972. And well below the 25.6% companies paid on average from 1987 to 2008.”
http://www.marketwatch.com/story/corporate-profits-share-of-pie-most-in-60-years-2011-07-29
Like I said, it’s just dishonesty from people screaming about crushing taxes.
Let me come back here.
It does matter where the cycle begins. Jobs are created through business to business agreements. Only then is there enough money in circulation get the cycle moving.
Quit squirming. There is going to be no job creation if there is no demand for the product or service.
consumers determin the economy. Consumers are not buying.
Yeah, like all those tax cuts “job creators” need so you can go buy a pizza (your words) and stimulate the economy? These memes are so phony.
The Pizza reference was of course to the Leftist Pizza shop owners that wrote an op-ed that had no problem raising taxes. If they want me or anyone else to buy a pizza now and then the money is better off in the hands of consumers than the government to accomplish that.
Sounded like entitlement sentiments though. You deserve a tax break as a “job creator” not to create jobs (you admit that tax cuts don’t do that), so you can have more take home money to spend.
Basic economics… I have more money to spend, that leftist pizza vendor sells one more pizza and is that much better off. How is that “entitled” to spend my own money supporting local business?
Because you were arguing for tax cuts for the wealthy, not tax cuts for everyone. Because you are a “job creator” you think you are entitled to contributing less than your fair share (like what was contributed in the Clinton era).
As the owners of Maine’s largest private sector employer know very well, the government can and does create jobs, even private sector jobs. Where was the first place Senator Collins went after congressional Republicans created the bogus and damaging debt crisis of 2011? Bath Iron Works, that’s where. Why? Because that’s where the government has created and maintains thousands of private Maine jobs.
In the fall of 2008 Senator McCain and Senator Obama suspended their campaigns and ran back to Washington to do what? Pass stimulus legislation to, if not create jobs, then to reduce the loss of jobs in the economy. You may recall the headline back then “We’re All Keynesians Now”. When the brown stuff hit the fan it was Keynes they (including Republicans) followed not Adam Smith and his “invisible hand”.
Also, the Federal Reserve System (whose head is chosen by the president)determines the supply and affects the velocity (turn-over) of money in the economy. Too little of either and there won’t be the flow of dollars needed to develop the demand that allows businesses to create jobs.
The economy is a man made system. For instance, the dollar bills you carry in your pocket were not minted by an “invisible hand”, or God. That’s the US government you’re carrying around. All parts of the system have an effect on the others, including government and government’s most powerful person, the president.
One good thing I thought would come out of the recent and continuing economic crisis was the final understanding by all that government has a major and potentially beneficial role in the economy. Mr. Tijerina has proven that at least one hasn’t yet learned the lesson obvious to most.
It seems proof to me that someone understands the economy if they predicted the economic crash of 2008 as Professor Paul Krugman did. He has also predicted the slow recovery we are in. He also predicted the current economic slump austerity measures have caused in Europe.
You can read his opinions on line at the New York Times each week. His predictions, if listened to carefully, can make you a lot of money as they have me.
http://www.nytimes.com/
” Neither candidate can impede the private sector from sending jobs overseas…”. No, but the American consumer can. A little patriotism at the cash register would turn our economy around and rebuild our middle class faster than ANYTHING the Democrats or Republicans have in mind. We can’t keep walking out of WalMart with bags full of cheap Chinese crap and wonder why no one has a job, it makes us look foolish as Americans. The best way to show our displeasure with the big money interests and their political lap dogs is to kick them in the wallet. The best way to kick them in the wallet is to buy American. They are counting on everyone to keep jumping on the cheap Chinese crap like a bunch of sea gulls on a french fry. Let’s screw them good and buy American.
The G8 and other international financial institutions have been hijacked by large corporate advocacy groups. This makes it politically difficult to pass a tariff policy that levels the playing field for American businesses to compete with low-wage unregulated foreign made products. Conservatives would have us race to the bottom in further lowering wages and gutting regulations obstensibly to promote competition, but with the bonus result of lowering the living standard. Both parties support the Trans-Pacific Partnership agreement, which is NAFTA on steroids. Your solution is the most effective, but requires U.S. consumers to shop with something other than the bottom line in mind. A tough sell to a nation ingrained with consumption and short-term cost saving.
The “invisible hand” is simply the metaphor for the market mechanism, as coined by Adam Smith. Just as important as the markets are the regulatory frameworks in which they must be made to function. What we have witnessed in recent years is that inadequate regulation can lead to runaway markets and in such an environment any president is indeed left relatively impotent in preventing the economic fall-out. Other countries and trading-blocks with which the US must compete are often more diligent about such matters, which can make the US vulnerable. Corporations will always exploit differences in regulations around the globe and as long as Americans will fall for the anti-regulatory hype they will find that jobs will continue to be exported and earnings accumulated offshore. Presidents certainly can influence employment levels when given the necessary policies and tools. Allowing corporations to dominate the policy debate as they have, in an increasingly complex and competitive global market environment, is akin to having the fox guard the hen-house.
Economic growth IS social justice. Only those who want something for nothing use the phrase social justice as the war cry. A strong economy allows for people to be successful for themselves and their families and not have to take from others or wait for the benevolent govt to support them.. The govt cannot “create” any job without confiscating money from someone else. But as one poster already stated…it sure can stifle job growth and prevent the creation of jobs in the private sector. If a President actually could eliminate cronyism, then they would really accomplish something.
“The election comes down to what the private sector favors and who they see as a guarantor of their interests.” That assumes a false pretense —- that the ONLY thing that matters to people is the private sector.
It is true that the ONLY thing that matters to those who are TRYING so hard to influence the outcome of this election with their MONEY, is the private sector . That doesn’t mean that they DO matter in this election . For them the private sector is all that exists. It has become their ( false) GOD. They have one view of the world. And that view is not American or loyal to AMERICA or her other values, in an increasingly global economy.
The private sector and thoughts of them are barely in my mind. They are only in my mind when I shop and I have significantly reduced my shopping, so they are even LESS in my mind. I never consciously think about the private sector . They are irrelevent to my life and most voters lives 23/24 hours a day.
I am glad they are there on the occaision that I do want to buy somethiong BUT the private sector is actually more dependent uopon MY BUYING then upon their selling .They are more dependent on ME , then I am on them. I can and have chosen NOT to spend, with millions of others.
. Those who are spending gazillion to influence your vote and mine , think of nothing BUT the private sector. They think of nothing but the almighty buck. For them it is the be all, do all ,of LIFE itself.
Most of us are much more rational and balanced than that. We value our family and friends, our neighborhoods ,our schools, our sense of community and much more . WE value materials things less and less , especially after being slapped up side the head by near economic collapse. We actively changed OUR priorities…sometimes actively and willingly…sometimes by having our economic security directly threatened by the economic collapse–loss of job, loss of homes, loss of credit ,loss of investment , loss of pride . And yet we weathered the storm…AND we the people, NOT we the private sector, are the ones who STILL have the vote . And WE, not the private sector, will decide on OUR future; Not theirs.
The private sector is totally irrelevant to my life 23/24 hours a day . And sometimes it is irrelevant for days at a time. It hardly ever touches my life .The importance of the private sector is way over blown. My world does NOT revolve around it
I have already voted and the private sector and their needs played NO part in my vote or how I voted.
Well maybe it did a little BIT. I resent their having played a part in throwing a bomb into my life and the lives of so many other hard working Americans. I resent the part they played in destroying the middle class in MY COUNTRY and the middle class lifestyle. and building it in someone else’s country. I resent their greed and their making MONEY their GOD. I resent their trying to buy MY vote and MY elected officials votes. I resent a supreme court That gives them permision to do so and who reinterpret what “we the people” REALLY means!! I want MY country back and voted to do so. The private sector’s needs was NOT a part of MY vote . MY needs were.
A rousing rendition of the Internationale would have been a great way to end your paean to the collective.
Here is a quote from an economist famous at least in conservative circles. It’s quite long, but economists are not necessarily known for writing economically. Care to guess the economist?
“There is no reason why in a free society
government should not assure to all, protection against severe
deprivation in the form of an assured minimum income, or a floor below
which nobody need descend. To enter into such an insurance against
extreme misfortune may well be in the interest of all; or it may be felt
to be a clear moral duty of all to assist, within the organised
community, those who cannot help themselves. So long as such a uniform
minimum income is provided outside the market to all those who, for any
reason, are unable to earn in the market an adequate maintenance, this
need not lead to a restriction of freedom, or conflict with the Rule of
Law.”
This came from “Law, Legislation, and Liberty”, a book written by the economist Friedrich Hayek, an economic beacon to Paul Ryan and, possibly, Mitt Romney. Of course for Mitt Romney that would be this month. Next month it would be someone else.
There is no free market. There is a highly taxpayer subsidized one.
What a steaming heap.
Bush was a job destroyer.
Obama was a job creator.
Trickle-down does not work.
Obama’s Stimulus saved us from a Great Depression and created millions of private sector jobs.
Fact
Yessah
Go ahead, drink some more cool-aid. I’d say you do a good job at creating a steaming heap. But then again, looking at this nations issues from a socialist’s point of view, I guess I understand why you would see it that way.
You have all the talking points in order. Well done. :)
The number 1 thing that creates jobs is demand. I have said this forever and will continue to say so. This bull of lowing taxes on the job creators is exactly what I just said “it BULL”. Even the Congressional Research Service has said so, but the Republicans did not like what the CRS published so they requested it be taken down. To read the paper go to http://www.dpcc.senate.gov/files/documents/CRSTaxesandtheEconomy%20Top%20Rates.pdf
You can find info on the CRS on Google or Bing, it is what Congress uses to find facts. Don’t like the facts get rid of it, the Republicans answer to things that don’t agree with their theory’s.
The economy is controlled by the consumer. When you buy American made products, you create jobs in America. When you buy Chinese products, you create jobs in China. I make it a point everyday to not reward any of those treasonous dirt bags that packed up their factories and moved to communist China. They turned their backs on the American worker. We should turn ours on them, period. Thanks to the internet, all the greedy little worms are easily identified, and easily avoided. Do business with companies that had the patriotism, loyalty to workers, and guts to say no to the juicy cheap Chinese labor and stayed here. Buying American will turn our economy around faster than anything the Democrats or Republicans have to offer.