George L. Barnett: Government spending creates jobs

Published: Wednesday, January 19, 2011 at 1:09 p.m.
Last Modified: Wednesday, January 19, 2011 at 1:09 p.m.

More and more we hear how the differential between the rich and the poor, or even the rich and the middle class, has grown over recent decades. The rich have become super rich while the poor have become truly poor and the middle class has become smaller and smaller, as manufacturing jobs, once plentiful, have mostly disappeared, only to be shipped overseas. It is rare that you see a box of any consumer product that is not marked “Made in China” and we know that two thirds of the automobiles we drive are manufactured, if not assembled, outside of the U.S. The steel plants that used to drive huge parts of our economy have long since closed.

We still have many, many small businesses performing services for the public. They fix our plumbing and heating, do electrical work, install air conditioners, build houses, operate restaurants, and to some extent still operate those other retail stores (book stores and hardware stores and pet supply stores) not yet taken over by the huge chains. Their business is suffering in this economy and it promises to get worse as their customer base gets smaller. And their customer base will get smaller because unemployment, now in excess of 9.5 percent will not improve soon.

The customers who the small businesses used to count on were the people who used to man those manufacturing plants, who used to forge steel and assemble cars and who don’t any longer. And the people who now flip burgers and work for minimum wage can’t afford air conditioners and have to make do without fixing their plumbing and can’t afford pets. Nevertheless, for some reason that I cannot understand, the people who own and operate small businesses do not identify themselves with and do not support their customer base, the poor and undereducated, the unemployed and the underpaid who, if they were educated, if they were employed, if they were adequately paid, would have the resources and would have the income to frequent their small businesses and bring such small businesses more income and more success.

Private enterprise will not educate the poor, it will not quickly employ the unemployed and it will not increase the pay of the underpaid. Private enterprise will continue to find ways to cut costs by shipping jobs overseas to manufacturing in China and to call centers in India

where telephone technicians can barely be understood. But then, corporate headquarters does not really care anyway if you are frustrated and give up. The truth is that unemployment, education and fair pay can only achieved promptly by government intervention. And government intervention means government spending. And government spending means, heaven forbid, increased taxes.

Here are the choices as I see it: If you are a small businessman, you can vote against taxes and save a few thousand dollars per year, but at the same time as you save your few thousand, you save Ben Affleck $10 million per year (he admitted that on television a while back), Bill Gates maybe $100 million, Warren Buffet another $100 million (I’m just guessing) and a whole bunch of other multi-millionaires and the entire group of the billionaire Walton family maybe a half a billion dollars in annual taxes (again I am guessing) and a whole bunch of hedge fund managers and corporate CEO’s a heck of a lot of millions.

Now, you ask, what will that do? Well, I am not recommending reducing the deficit because that will just miss the point. What I am recommending is having the government invest the money in creating a high speed rail system (like France, Japan and others have) and a new electrical grid, and more wind farms and nuclear plants (using clean fuel like Thorium not Uranium) and repairing bridges and the interstate road system and financing inner city charter schools that don’t rely on teacher unions and tenure and that guaranty that their students will go to college. Those investments will very quickly increase employment and over the intermediate and long run increase the level of our educated populace which will mean that our corporations will be able to use American scientists and engineers and not Indian scientists and engineers to invent and design their new products and in general Americans will find higher paying jobs.

So, whose side are you on? Yeah, We all want to be on the side of the rich and powerful and get our names and faces in the paper, but the reality is that most of us are not rich and powerful and we need to think long and hard about what side our bread is buttered on. If a rich man is going to come into your store he will buy one air conditioner, but if you help 100 poor people get jobs you can sell a whole lot more air conditioners.

I know that the next Congressional and Senate elections are almost two years away, but between now and then you might want to consider all of the above, look behind the slogans and try to figure out who’s really on your side.

George L. Barnett,


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