American Elephants

Why Liberal Governance Never, Never Works! by The Elephant's Child

There are strange gaps in Liberal thinking or understanding.  Take ‘Profit,’ for example. They seem to think profit is somehow bad, or at least ‘unfair,’ and business really shouldn’t be insisting on making a profit — without any understanding that the only reason for a business to exist is to make a profit.

And they really, really don’t get what happens when a business does not make a profit. Much was made in the last election that in Mitt Romney’s successful career of creating businesses, he sometimes cut back on employees, or closed parts of businesses and people lost their jobs. Obviously mean.

President Obama, from his first days in office, has promoted infrastructure, and crumbling roads and bridges as the source of bountiful new jobs, without the slightest understanding of the planning, zoning, environmental impact studies, and legal hurdles before the drafting and engineering would ever take place. An important project could take five, or as long as ten  years  or more, before actual construction ever began. Remember when he sheepishly admitted that perhaps there really weren’t any shovel-ready jobs.

Much has been made of the fact that the construction jobs involved in the Keystone XL pipeline are “temporary.” Yes. All construction jobs are temporary, and a worker who has learned new skills on one job can take them on to a better position at the next job.

Economist Allan Meltzer, in a recent essay, pointed out that the Federal Reserve tried to resolve real economic problems by printing money, which is not possible. The Obama administration insisted on imposing costly regulations on firms and industries. They supported stronger labor unions. They opposed tax reduction — and then they didn’t understand why the recovery was the slowest in history.

By creating enormous uncertainty in businesses about what new regulations might be imposed next, they limited expansion and start-ups as business hunkered down to wait it out.

The minimum wage, which is meant to be a starter wage for beginners, is regularly attacked by Liberals as not being enough to support a family. A raw beginner does not have the skills to be worth even a minimum wage. If they learn quickly how to make change, respond politely to customers, learn where things are and how to use them and can do so without much supervision, they begin to be worth the beginners wage. When they become skillful, see and pick up things dropped on the flood, notice, without being told, when customers need attention or tables need to be cleaned, have learned to be friendly to unpleasant customers, they have skills that can be taken on the next higher paying job. People aren’t supposed to stay in entry-level jobs, that’s why they are called “entry-level.” They are not intended to support a family. You are supposed to climb the ladder of success by learning.

When extra costs are imposed on a business, something has to give. Their prices can be raised, some employees can be laid off, the product or service can be cut back (see 1 inch narrower toilet tissue), or some part of the business can be automated. (See self-service gas stations, self-service hardware and grocery check stands, and Bank ATMs). Robots of one kind or another are replacing jobs once done by fallible human beings, who demand time off, sick leave and more benefits.

Every action taken by government creates incentives of one kind or another. ObamaCare is full of incentives, most of which seem never to have occurred to the politicians who devised the health care insurance in the back rooms of Congress. The Democrats have been surprised or astonished to find out what has been caused by the incentives they created, and they still mostly don’t understand.

An easy example is the Medicare Drug Benefit. Deplored by Republicans as too costly (statins have been very successful in helping seniors to avoid costly heart surgery, for example). Democrats were outraged by the  “donut hole” which  provided a  major incentive for seniors to use a generic drug instead of a named and more costly prescription of equal quality. The Drug benefit has been a shining example of  a bill that did not cost more than projections. Democrats have stripped out the “donut hole” incentive as “unfair,” so costs will go up, astonishing Democrats.

Many prominent Democrats have never done anything else but politics, Chuck Schumer, Harry Reid, Nancy Pelosi and Joe Biden come to mind. Those who bring other skills, doctors, military service, or simply the ability to read a balance sheet can be valuable. Making laws is about more than making speeches and appearing on TV.

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