JOB CREATION
I started Investment Rarities in 1973. We had a brief run in 1974 when gold and silver jumped up but by 1975 it was over. The first energy crisis had dawned and we survived by developing and selling the Sierra Wood Burning Stove. We began to publish the Wood Burning Quarterly publication, which sold in fireplace stores. In time, we changed the name to Home Energy Digest and wrote extensively about solar energy, wind power, biomass and other forms of alternative energy. The government was pouring money into all of them in the form of grants, subsidies and tax breaks. Nothing much came of it. The government wasted a lot of money.
One day I got a call from an engineer who read our magazine. He made an appointment to see me. During his visit he explained that he and 70 others were being paid by the government to come up with solutions to the energy crisis. It had been two years and thus far they hadn’t hit upon anything. My advice was to develop an energy-saving product that people would buy. Apparently that had never dawned on them because he thought it was a great idea. My distaste for government solutions went up a notch after this meeting. I knew they would never come up with anything and the government was wasting money on endless projects like this across the nation. Today they are force feeding billions to create green jobs. I’ve seen this act before. It doesn’t work.
The government thinks if they take enough money from the people who earn it and subsidize a bunch of people this will create millions of jobs. How dumb are they? Let me tell you what it takes to create jobs. Someone has to turn their back on their financial security, step away from a regular paycheck and risk everything on a business venture. They have to undergo days and nights of racking anxiety, work and struggle for months without gain and skirt the edge of failure while finding the will to persist.
If they can survive this relentless adversity and be creative enough to develop a product or service that people want they can begin to break-even and eventually hire someone. That creates one job. No matter how many employees a company eventually has, that’s how it starts. Is there anyone in Washington who understands what it takes to create one job?
For every new business that succeeds there are fifty that don’t last five years. Those who survive and begin to make a profit are in for a rude awakening. The precious capital they’ve managed to earn gets quickly taxed away by the government. This is money that would otherwise be used to create growth and employment. A business strives to gain a financial cushion that will help them survive a slump or downturn. However, state and federal taxes take half of their profits thereby stunting employment and killing jobs.
There’s a formula for job creation. Let businesses keep more of what they earn. Most especially let business startups go without taxes. For an immediate turnaround cut all business taxes to the bone. Make it highly profitable to take risks that create jobs. Unleash the entrepreneurs and get the government out of the way.
