You may be following the Obama initiative - Start up America. It is making great press. It will have a white collar group of business executives on board. The same executives who managed the biggest companies in America. You know - the companies that were too big to fail, took obscene bonuses and gave tens of thousands of people the right to collect unemployment.
I was initially impressed with the Start up America initiative. I became less impressed when I compared it to the old Save America initiative (TARP) which Obama poured more than a trillion into, dollars that is. I was even less impressed when I noted that the white collar Start up America board will have executives from companies that received $billions from the Save America Obama initiative. You may recall that AIG got almost 200 billion of those Save America dollars, none of which has truly been accounted for so far. But who cares when the Washington talks transparency, but walks obscurity.
The Start up America initiative will have less than 0.5% as much as Save America, a puny $billion or so. I guess it takes a lot more to save us than to get us going again. What I am bothered about is if we are saved now, why do we need to get started again? Didn’t the trillion dollars take care of that? Apparently not.
My forecast is the Start up America initiative will be a fly in the ointment, much ado about nothing. It will sound good for awhile then pass away into yesterday’s ideas. Why? Because Obama and the democrats in general do not seem to understand that governments do not start businesses and create jobs. People do.
To repeat an old saying, cut the capital gains tax to zero for 5 years and private money will flow into new businesses like water over Niagara Falls. To make it even more fascinating, cut the capital gains tax on investments in start up businesses to zero for ten years. Wow.
Government should not try to become a full time player, but stick to improving the playing field for capital, entrepreneurship and labor to meet in the birthing canal of new businesses, which will create the new jobs we solely need.
Is it really that complicated?
The only thing missing from the Start up America program hyper-launch is background music from the Rolling Stones. Think about it.
Overall I doubt that Jeff Immelt has any better idea how to create jobs in America -- beyond platitudes like "better education" than most other folks. If the government wanted to start manufacturing dishwashers and wind turbines, sure, those are what he is good at.
ReplyDeleteTARP was a GWB initiative, not Obama. Same with taking over Fannie and Freddie. Obama's policies were the car companies and the stimulus.
If I am interpreting the post correctly, the author would have been more impressed with the initiative had Obama given it a trillion dollars of funding? I can't believe that you would have forwarded something like that.
I also highly doubt that there are zillions of dollars of capital just sitting on wonderful entrepreneurial opportunities that are being deterred by a 15% capital gains tax. Most small businesses are funded on credit cards and pay a lot higher than 15% for startup money, so there are already plenty of opportunities not being realized. According to the NFIB survey, small businesses complain about lack of demand and government intervention. I personally suspect that state and local regulations are a lot more intrusive than federal but that is a different issue. I can tell you from trying to run a nonprofit in DC that the IRS was actually easy to work with -- we got our EIN within minutes, when we misfiled our 990 they were very helpful in having us correct it -- while the DC government has been a nightmare of red tape.
If I were in charge I would cut the corporate income tax rate to zero and equalize the capital gains and income taxes. Money earned is money earned, whether it comes from investing savings or one's own time and labor. We shouldn't subsidize one form of production over another -- equalize it and let the market sort it out.