One of yesterday’s most popular posts here on 3BP was about why the Jobs Crisis currently facing Ohio and the nation isn’t really going anywhere.
Well, an article featured in Bloomberg nailed that same theme once again.
The Right points to uncertainty over looming tax increases (aren’t death and taxes life’s two certainties?) and health-care mandates. The Left says the problem is banks aren’t lending.
The truth is a bit of both and something more basic. Small-business owners list “poor sales” as the numero uno problem. And the jobs tax credit for hiring new workers, proposed by President Obama and embraced by Congress, won’t do much to help. Employers aren’t about to pay a new worker $40,000 to earn a $5,000 credit unless that worker generates $35,000 of revenue, Dunkelberg explains. That’s Econ 101 (see “marginal revenue product” or “profit maximization”), a course most of our elected representatives seem to have missed.
The tax credit for hiring “has absolutely no impact on our decision-making,” says Phil Kenny, president of Trucks Unique, an Albuquerque, New Mexico, company that customizes pick-up trucks for commercial and individual purposes. “We have no tax liability to take a credit against.”
And that’s not all. A tax credit “is not going to make me hire when we don’t have work,” says Jim Henderson, president of Dynamic Sales Co., a 44-year-old construction and industrial supply company in St. Louis with seven employees. “I plan to sell my way out of recession, not wait for Washington to help me out.”
Our political leadership, both at the state and national level, are playing politics with the nation’s economy by proposing policy initiatives that wither under scrutiny, but resound with the common public.
America needs principled leadership, not opportunistic cowards.