The Economy and Jobs

There was an article in the Sunday, November 6, 2011, New York Times on-line.  The title of the piece was “Can Anyone Really Create Jobs” by Adam Davidson.  The author laid out many of the same points we have presented in the past especially in our October 24th posting:  “The Economy - We Need to Something Radically Different.”

Mr. Davidson noted that “Every politician has a “jobs plan,” very often a list of vague proposals filled with serious-sounding phrases like “budget framework” and “regulatory cap” that are designed, for the most part, to mean both everything and nothing at all.”  He is spot on.  We believed and have advocated that this country and its place in the world has changed creating a new equilibrium, the new-new, that we have referred to. 

Mr. Davidson referred to two schools of thought the Keynesian and the fiscally conservative University of Chicago School. In the Keynesian school, the adherents mostly Democrats believe we have to stimulate our way back to economic health. He goes on to say that the goal in the Keynesian school “is to goad consumers into spending again. And President Obama’s jettisoned $400 billion jobs package, hard-core Keynesians argue, is nowhere near what it would take to persuade them.”  This stimulation comes by increasing our deficit.

Then Davidson goes on to note that both schools agree on one thing.  This is an important thing that he claims politicians will never admit at least not in an election year. “An economy is truly healthy only when its people know how to make and do things that others will pay them a decent amount for. Jobs, in other words, are not the cause of a healthy economy; they’re the by product. And that’s another thing most national politicians know but will never say.”

He is absolutely correct.  We have to create products that people want to buy. He does not point out that we have to create products that appeal to global customers and markets.  We are still focused like we are the greatest and end all market in the world.  Consumer product companies have long known to look globally. Companies like Proctor & Gamble, Unilever, Kraft, and Colgate are in every major market in the world. As they grow, it is not likely the jobs growth will be in the US. The growth will be elsewhere in the world where the markets are.

The only hope for growth here is that if transportation costs increase enough, it will make sense for companies to make products here and thus increase jobs.  Even then it is likely states will compete like crazy to attract new manufacturing facilities.  Who is advocating for the nation as a whole?  Who is worried about the citizens here and their long term well being and growth? The multi-nationals will worry about job growth and good citizenry here when it makes business sense.

Comments

[Sybil Wieners]

"Can Anyone Really Create Jobs?" Well I guess before thinking of employment problems, the government must first work on strengthening the economy.