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The Horseless Carriage

 

J. D. Pendry

 

Get out your canteen cup and fill it with C-ration (MRE for you youngsters) coffee.Youíre going to need a jolt to get through this one, but you need to get through it Ė twice if you donít get it the first time around.Since we are outsourcing all of Americaís jobs to third world slave labor markets, itís imperative in this general election year that we are able to separate bovine scatology from fact.

 

Using shock and awe marketing techniques, Senator Kerry produced a campaign ad for those of us that are economics challenged.Whenever a politician does this, I develop a headache sorting through it, but then I get to pass the headache to you so it evens out.

 

The Senator tells us that heís going to create 10,000,000 new jobs after we make him President.If you want to attract attention to your product, promise amazing results.Give them the Veg-o-matic thatíll make dinner and mow their lawn while they snooze on the back porch.If this is the best product of the Senatorís college educated political science majors, Iím concerned Ė you should be too.We can dissect this one with elementary school arithmetic.According to the Bureau of Labor www.bls.gov our countryís civil labor force (16 years old and up) is 146,471,000.Of them, 138,301,000 are employed.That leaves 8,202,000 people who are not working.The math tells us that weíll have to import 1,798,000 people to fill those jobs or our employment rate will be at Ė1.2%.Maybe thatís how he intends to deal with the illegal immigrant problem.

 

Indulge me for a minute while I take the Senatorís plan to its logical conclusion.Suppose that he can create 10,000,000 new jobs (I know, be polite, stop giggling.) without losing any, which seems to be what he implies.We would have more jobs than we have people with which to fill them.Please recall the basic principle of supply and demand.If there are not enough employees (supply) to fill jobs (demand), employers will have to pay higher wages to get and keep the workers they need.Does that sound good to you?If it does, consider the equation that follows.Higher wages = higher cost to produce goods which = higher product prices which = equals inflation which = higher interest rates all of which serve to decrease demand for goods, reduce the flow of cash and ultimately reduce the size of the labor force and cause corporations to outsource labor into cheaper overseas labor markets.Please, do not accept any job creation claims until youíve seen some substance to support them.(And donít accept what I have to say either until you checked me out.) Just remember the adage, if it sounds to good to be trueÖAnother fact the Senator doesnít mention in his promise is that in an economy such as ours you should always look at the long-term.When you do, youíll discover there are usually as many jobs lost over a period as created.That explains our stable unemployment rates.For example, we may lose a manufacturing job to technology while creating a higher paying technical job - which likely increases our production.Production in the US continues to rise.

 

http://www.bls.gov/news.release/prod2.nr0.htm

 

It is true that we are outsourcing jobs.Itís also true that we have been doing it since the 1980ís and are doing it at a lesser rate now than we did in the past.Itís also true that we are insourcing jobs.Weíve lost some manufacturing jobs here in Wild Wonderful.But, as they say here. ďJust up the road from here, is a big olí Toyota plant.ĒOne thatís expanded its operations within the last couple of years.The Japanese figured it out.Itís easier for them to compete and sell products on the US market if American employees manufacture them in the US.

 

The jobs at this plant require a good amount of training and skill.US businesses have discovered that if they outsource low paying jobs that require little training or skill, for example sowing shirts together, to Sri Lanka they can import the product back into the US and still give it to American consumers at a cheaper price than if the shirt was sowed here.This keeps a high standard of living in our country and actually raises the standard of living in Sri Lanka Ė something the liberals should rave about.

 

Our economy is in constant transition.Itís the horseless carriage story.The guys that might have shoed horses now put new tires on SUVs.Last yearís assembly line worker is this yearís IT professional.To protect jobs, people have to move themselves forward.The governmentís job is to provide the means for them to do that rather than provide them a job.For example, a community college program that provides someone with a job skill that is in demand in the community.Imagine if our Armed Forces failed to constantly modernize.We saw the effect of that when Civil War leaders used the linear tactics of the Revolutionary War.Casualty rates were amazingly high when lines of soldiers marched into the face of weapons decades more advanced.

 

Remember, the only way a politician can create jobs is by increasing the size of the government workforce.What a politician can do, however, is create an environment thatís conducive to growth and programs that help people acquire skills that are in need.What plans do the contenders have?

 

 

 

The results of the Presidentís plan are in front of us to see.

 

We might want to be wary of Kerry (poetry not intended).Hereís why.Do you know of any ďnotĒ rich guys who create jobs?Figures show that small business owners create 70-80% of the jobs in this country.Many of these business owners pay taxes at the individual tax rate.Taking additional money from them reduces what they have to put back into a business or hire an extra employee.I heard one liberal commentator say that this is irrelevant because only about 3 percent of small business owners fall into this income category.Thatís fine, until you try to bring that number into a context that can be understood.For the sake of argument, letís assume that 75 percent of our jobs belong to small businesses.75 percent of our employed workforce is 103,726,000.How many of them have jobs because of the 3 percent that got a tax break?How many of the 500,000 new jobs realized in the first quarter of 2004 are attributable to this 3 percent.I havenít found that number yet, but Iím guessing itís significant.Allow me one last point on this.When someone in my income range has a little extra cash, he might buy a new lawnmower or television set.Increased purchases of these durable goods improve the economy and the job market as production increases to fill the demand.When someone in the ďrichĒ group has more money, he buys a big boat, another house or expands his business.The people who make boats and build houses appreciate the business Ė others appreciate the jobs this creates.

 

When we are looking for reasons that jobs go away, it shows shallow thinking to point to the President and say he did it or to point to a candidate and say he can fix it.State governments lose or gain more jobs for their states than does the federal government.Right here in Wild and Wonderful, we have what many believe is an out of control Workerís Compensation program.If you recall, so does California.Old businesses have left because of it and new businesses avoid the state for the same reason.Wild and Wonderful is ďTort HellĒ because of a liberal court system.Ambulance chasing lawyer commercials on television are nearly as frequent as fast food and car dealer commercials.This increases medical costs and the cost of providing a medical benefit to workers; many of the claims are for medical malpractice.When you consider all of these issues and others, businesses will choose to locate where they stand to make the most profit.Because thatís what businesses in a capitalist system do Ė produce wealth for their shareholders.Most of us shareholders would want to fire a CEO that didnít manage the business in a way that provided us with the biggest dividend check.

 

No politicians were abused in the production of this article.A couple of old brain cells were.Study so that you can make an educated choice in November.