Andrei Cherny, the chairman of the state Democratic Party and unsuccessful candidate for state treasurer, believes he has finally cracked the code for creating those new jobs that have proved so elusive to members of his party.
Cherny, although not a member of any legislature, has nevertheless proposed the “Steve Jobs Act” to stimulate entrepreneurial activity. Writing in The Atlantic, he claims that his bill would give “a sense of larger purpose and direction” to an “America struggling to find its way in a bewildering, humbling world.” Wow.
But despite the pretentiousness, the bill itself is a hodge-podge of formerly bright ideas that have been thought of before and some that have already failed. The centerpiece is the National Innovation Bank, charged with providing funding to entrepreneurs deemed especially likely to create jobs. Unchastened by the experience of Solyndra, Fannie Mae and dozens of other government attempts to outwit capital markets, Cherny soldiers on in the mistaken belief that government aid is the key to entrepreneurial success.
Not all of Cherny’s ideas are bad. He touches on reforming retirement benefits, unemployment compensation and health care, where lightening the burden of Obamacare on small businesses would undoubtedly help.
He sensibly suggests excusing small businesses from the onerous demands of Sarbanes-Oxley, although it isn’t clear why larger companies should still have to comply. Sure, they have the lawyers and accountants on board, but those overly complicated accounting requirements cost us all plenty and have little demonstrated benefit.
But the point is that Cherny misses the point. Entrepreneurs don’t depend on special favors or subsidies from government. They mostly just need government to get out of the way and let businesses rise or fall on their own merits.
For example, take that famous entrepreneur, the real Steve Jobs. Near the end of his life, Jobs was invited to dinner with President Barack Obama, whose political future hangs on more Americans finding employment. Since he’s spent a thousand billion or so with no results, Obama decided to seek advice from people who actually do create jobs.
But what Steve Jobs wanted wasn’t the Steve Jobs Act. His particular issue was that he wanted to government quit making it so hard to find qualified engineers. Jobs told Obama that Apple alone exports 700,000 factory jobs to China because it can’t find the 30,000 engineers here needed to operate the plants. Meanwhile, the government insists that foreign graduates educated here return to their country of origin.
Obama’s answer was that he would not consent to loosened visa requirements without “comprehensive” immigration reform. So let’s get this straight. The president is willing to hold millions of good jobs hostage to his goal of turning illegal immigrants into voting Democrats.
So tell me again, who’s the bad guy here? No wonder that Jobs and the Facebook, Google, Cisco and Oracle execs at the meeting were put off by politics once again trumping sound economics.
Obama is almost comically clueless about the nature of job creation. In his mind, government actively creates jobs by manipulating, stimulating and cajoling business leaders into serving the common good.
But Jobs and the others realized their success hardly came from bureaucratic direction or subsidy. These are risk-takers and innovators who are already highly motivated to create products and services consumers desire and that naturally require workers to produce. They need a few basics from government — predictable laws, private property rights, access to labor and capital markets — but not much else.
Even President Obama agrees with economists that the explosive growth of regulation is a barrier to job creation. Yet on his watch thousands more pages of regulations have been added to the already crushing load.
A recent econometric analysis by the Phoenix Center in Washington showed that a 5 percent reduction in regulations — nowhere near the growth in the Obama years alone — would result in $75 billion of economic growth and would create 1.2 million new jobs.
Obama should call off his frantic, impoverishing search for jobs. The answer is right under his nose. Government needs to stand down and let Americans get to work creating jobs and wealth, like we’ve done so many times before.
• East Valley resident Tom Patterson (firstname.lastname@example.org) is a retired physician and former state senator.