Under the Microscope: Job Creation

Since I called out Obama for not knowing how to create jobs, I guess I should tackle this issue.

My main beef with Obama is that he's using fiscal stimulus to try and create jobs. The way he's spending just isn't working. The economy continues to suffer even as he's spending billions of dollars "creating jobs:"

What’s clear, however, is that the Obama Administration badly needs a re-start after a(nother) disastrous August that saw the president’s numbers drop to record lows and the country descend deeper into economic pessimism.

Assuming that the jobs report shows in the neighborhood of 60,000 jobs created, it would provide fodder to Obama’s Republican critics who have long argued that not only are his policies not working but that the administration has little idea what else to do to make things better.

Despite this, it seems that President Obama wants to do more of the same:

President Barack Obama signaled Monday he'll propose a major infrastructure program and an extension of a payroll tax break in the jobs speech he planned to deliver Thursday before a joint session of Congress.

While the state of this country's infrastructure is a topic for another day, at what point will Obama realize that "creating" construction jobs is creating work not jobs. Once these projects are completed, there's nothing left to do unless you spend more money on improving infrastructure. It's just a spending spiral that he's creating. You can't do that.

The GOP has not made job growth a priority:

But issuing a call for jobs isn't as simple as it may seem. While the new jobs numbers present the GOP with an obvious issue with which to hammer the president, Republicans in Congress and out on the campaign trail have spent much of the year focused on a different economic area: fiscal austerity and proposals to pare the big federal budget deficit.

However, it seems that it will become a more contested issue. Mitt Romney outlined his plan today:

Standing in front of a large banner that read “Day One, Job One,” Mr. Romney detailed the 10 actions he would take the first day of his presidency. Five of them are executive orders, and the other five are pieces of legislation that he would send to Congress and request action on within 30 days.

“The right course for America is to believe in growth,” Mr. Romney, a former Massachusetts governor, said at McCandless International Trucks. “Growing our economy is the way to get people to work and to balance our national budget.”

The way I see it, in terms of the difference to approaches, Romney is putting the money back into the households and to the businesses, while Obama is using that money to spend on creating jobs. Clearly it's more efficient Romney's way. I'm not convinced that how great an effect it will have.

Jon Huntsman had an op-ed in the Wall Street Journal this morning:

Our entrepreneurs are harmed as much by overregulation as by overtaxation.

I believe that this is more the way to go.

Henry R Nothhaft had this to say yesterday:

We know, for starters, that 100% of net job growth in the U.S. comes from entrepreneurial start-ups, as a Kauffman Foundation report documented in 2010. If you took start-ups out of the picture and looked only at large or incumbent businesses, job growth over the last 35 years would actually be negative. In the words of Kauffman's Tim Kane, "When it comes to U.S. job growth, start-up companies aren't everything. They're the only thing."

While big companies may have to hire or fire people from time to time, they're, for the most part, mature companies. They're not going to continue to grow. The new technologies that are born and the new jobs are spurred by small businesses:

As I noted in an article last year with retired chief judge Paul Michel of the U.S. Court of Appeals for the Federal Circuit, which handles patent appeals, simply clearing the patent backlog could create up to 2.25 million jobs by 2014. And it wouldn't cost the taxpayer a dime, since the patent office is the only self-supporting agency of the federal government.

The problem with the current government is that they're not spending money right. I don't trust a government that is going to take tax payer money and misappropriate it in misguided band-aid programs.

While I'm not satisfied with the Republicans' plans thus far, I feel their plans will better alleviate the troubled economy because it will allow households and firms to choose where to spend that money. Deregulation has been mentioned by several candidates, but there hasn't been a specific plan laid out. Hopefully, as the election trail heats up, the candidates will be pushed to come up with specific ways to fix the economy and to create jobs.