OPINION:
President Obama brainstormed at the White House Wednesday at a forum on “insourcing American jobs.” The administration’s greatest political vulnerability is sky-high unemployment. The basic idea that trickled out of the session was America must “bring back” jobs from overseas by raising taxes on companies that invest abroad. That’s a bad idea.
The president’s economic advisers think they can wave their legislative wands to make bad news disappear. They give no thought to the consequences of having bureaucrats select winners and losers in the market. They don’t consider the downside of layering more red tape around an already complex tax system. If Mr. Obama were serious about bringing down the unemployment rate from its current 8.5 percent level, he would work on reducing the regulatory and tax burden so industry could spend more time creating wealth and less filling out paperwork. Mr. Obama’s selective tax incentives will be as useless as his Keynesian stimulus spending binge that left the country a trillion dollars poorer.
The left refuses to move away from the tired, discredited ideas of the British economist who inspired FDR and Jimmy Carter. Contrary to the main premise of Mr. Obama’s forum, jobs aren’t something bureaucrats can “bring back.” A market system is dynamic; the number of jobs isn’t fixed. Investment shouldn’t be made to go backward toward typewriters and horse-driven carriages, having moved to cloud computing and automobiles. When government attempts to create jobs or redirect the market, it fails. Government isn’t the channel for job creation - the private sector is.
The proper function of government is to provide a legal framework that allows for peaceful, orderly private exchange to take place. These market exchanges are what enhance both welfare and wealth and create gainful employment. Private investment will only take place when property rights are respected, the regulatory environment is fair and transparent and tax rates are reasonable. All of these conditions are increasingly hard to find in the United States.
This country continues to hold the dubious distinction of having the highest corporate tax rate in the 34-member Organization for Economic Cooperation and Development. Cutting this burden will do more to attract U.S. capital back home than any industry-specific tax incentive - and it would be far less distortionary overall.
The United States continues to fall in the annual rankings in the Fraser Institute’s “Economic Freedom of the World” report. Attempts at micromanaging the economy will push us further down this path, and we’ll have no new jobs to show for it. It’s time to step back and realize once again what the proper role of government is - and isn’t - when it comes to creating jobs. Washington needs to just get out of the way.
The Washington Times
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