Saturday, June 4, 2011

Surprise, Surprise..No Jobs

Hilda Solis, Obama's Secretary of Labor, was trotted out yesterday to make the rounds on the news shows to explain how the economy could produce a mere 54,000 new jobs in the month of May. According to Solis, all we need to do is pass Obama's plans for "investing in America" in education and alternative energy and to pass the debt ceiling increase. These people must live in a cave! How would boosting teacher salaries, providing more subsidies to Obama's friends in the alternative energy space and providing a new lease on life for deficit spending do anything for aggregate employment?

Solis, along with her boss, needs a course in economics. If you want workers hired, what should the government do? Make them more expensive? Give them additional rights to sue their employers? Solis seems to think that businesses should hire folks simply to further Obama's political future.

Back to square one. Businesses exist to make money. If they expand their businesses, they will do it in the most efficient way. If the government deliberately makes one of the factors of production much more expensive, then, when businesses do expand, they will avoid using that factor of production. That, in a nutshell, is why no wants to hire people, whether they are expanding or not. If you are trying to make money in the modern economy, the last thing you want are more employees.

High unemployment is a direct result of Obama economic policies. They are reaping what they have sown. Presumably, they must have thought that some other outcome was possible. A policy of demonizing business folks and making labor much, more expensive for business has lead to staggeringly high levels of unemployment and no serious job creation in sight. Why is that a surprise to anyone?

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