Timothy P. Carney‘s latest column in the Washington Examiner explores presidential press secretary Jay Carney’s recent pronouncement on the relationship between the White House and job creation.
A presidential press secretary has never spoken a truer sentence than Jay Carney’s admission last week: “The White House does not create jobs.” This is a rare and welcome expression of humility from a White House that has promised everything from “remak[ing] America” to stopping the oceans’ rise. It’s also an opportunity to get Washington out of the way and lay out a jobs agenda that can succeed.
Free-market advocates know that the best formula for prosperity is low tax rates, neutral tax laws, low regulation and small government. Cutting government spending and eliminating distortions in the tax code will allocate wealth more efficiently and strengthen the economy. But that’s a long-term proposition. It seems that liberals, with their John Maynard Keynes-inspired stimulus notions, are the only ones offering credible (if ultimately mistaken) ideas for short-term boosts. Interventionists always have more tricks in their bag for providing immediate benefits to selected groups. The free-market argument — that these government programs provide narrow and short-term gain while inflicting broad and long-term pain — seems less relevant when economic pain is so acute.
Carney goes on to discuss how “bad government policy” provides an opportunity for positive reforms.
Most of what Congress could do to spur job growth is to stop penalizing hiring so much. Forget these gimmicky one-time tax credits for new hires or short-term reductions in the payroll tax. Hiring someone is a long-term investment, and so employers look at long-term costs of a hire. Instead of payroll tax holidays, pass permanent payroll tax cuts and otherwise reduce the government-imposed costs of hiring people.
Workplace regulations are a huge penalty for hiring. Many regulations, such as Obamacare’s employer mandate, have exemptions for small businesses. Sometimes these rules exempt companies employing fewer than 50 people, and sometimes the exemption is as small as four people. The number of employees set by Congress in these exemptions is arbitrary, so why not double — or triple — all of those thresholds? You’ll see plenty of businesses that are just below the regulators’ radar grow once they know they can do so without getting OSHA, the Department of Labor, or Health and Human Services breathing down their back.