One of the most interesting skills I learned going through Air Force survival training was how to build a fire. It comes in handy on camping trips, with fireplaces, and in post-apocalyptic scenarios that only a worrier like me could dream up.
You need three things to build a fire: fuel, heat and oxygen. In the right proportions, you generate warmth and light; but, in the wrong proportions, you’ll get neither. Too much fuel and you’ll smother the fire. Too little and it will die out. Too much heat and you’ll burn right through your fuel. Too little and you’ll have no fire at all. Too much oxygen and you’ll blow the fire out. Too little and the fire can’t grow.
Building a fire is more art than science. Having built quite a few over the last 22 years, I’ve learned how delicate the process can be. It seems simple in the best conditions–just throw some paper and wood together and light it. In the worst conditions, however–when the fuel is wet, the wind is blowing hard and it’s bitterly cold–a fire can be very difficult to build and keep going.
I couldn’t help but think of building a fire when reading recent articles about how to get the U.S. jobs machine pumping. Jobs growth, which is really just a derivative of economic growth, is like fire: it requires the right ingredients in the right proportions. The wrong ingredients in the wrong proportions will snuff it out before it can even get going.
In the best conditions–with a well-skilled workforce, property rights, labor flexibility, and readily available capital–jobs growth will seem to occur magically. In the worst conditions, however–a workforce trained for jobs the market doesn’t need, lots of rules and regulations preventing property protection and labor flexibility, and a dearth of capital–and job growth can be difficult to impossible to build and keep going.
It seems like the real job creators of the world–financiers, businesses, entrepreneurs–have been joined by policy makers trying to “help” get the fire going. The policy makers may mean well, but they’re simply preventing the right ingredients from coming together in the right proportions. Their incessant meddling is snuffing the fire out time and again.
Job growth requires economic growth. Economic growth will not occur by taking money from Bobby and giving it to Billy. Nor will it occur by printing money. Real growth occurs when capital is available, property rights are protected, labor can seek its own terms, and job skills match market demand. No magic is necessary, and jobs will grow and flourish in such conditions.
But, any attempt to meddle with ingredients or proportions, especially in bad economic conditions like we’re in, and you’ll see unemployment continue to stagnate or climb. If you want real–instead of illusory–job growth, its time to get policy makers out of the way.
Nothing in this blog should be considered investment, financial, tax, or legal advice. The opinions, estimates and projections contained herein are subject to change without notice. Information throughout this blog has been obtained from sources believed to be accurate and reliable, but such accuracy cannot be guaranteed.