Bain Capital

Wealth Creation Is Not the Enemy

Obama's critique of Romney's work in private equity betrays a misunderstanding of capitalism.

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President Obama accuses Mitt Romney of putting profits above people by striving to create wealth rather than jobs during his 15 years at Bain Capital. This critique of Romney's work at the private equity firm, which Obama says will be central to his re-election campaign, betrays a fundamental misunderstanding of capitalism.

While private equity firms are a "healthy part of the free market," Obama said at a press conference last week, "their priority is to maximize profits, and that's not always going to be good for businesses or communities or workers." By contrast, he said, "My job is to take into account everybody, not just some."

Anti-Romney ads amplify this theme, focusing on people who lost their jobs after GST Steel, a Kansas City company acquired by Bain in 1993, went bankrupt eight years later. "His experiences were about creating wealth—wealth for himself, his partners and his investors," Obama adviser Stephanie Cutter told reporters. "GST workers really lost out, and Romney and his partners did not."

Another adviser, Robert Gibbs, put it more succinctly on Face the Nation last Sunday. "He's very good at making money for his partners," Gibbs said of Romney, but "he's not so good at creating jobs." In fact, said former "car czar" Steven Rattner in a New York Times op-ed piece, "any job creation was accidental."

But as Rattner, who co-founded his own private equity firm, surely understands, that is true of every successful business. A company that sees job creation, as opposed to profit, as its goal will not stay in business long.

While the goal of making a profit leads a company to minimize costs, the goal of creating jobs means maximizing costs: rejecting every labor-saving innovation, shunning organizational efficiencies, and hiring people just for the sake of putting them to work, even if the work is not worth the wage. A company operated that way eventually would employ no one.

Since a private equity firm makes money by buying and selling companies, it has a strong incentive to make those businesses more valuable. That might mean an expansion that requires hiring more people, or it might mean cost cutting that includes layoffs. Sometimes—as in the case of GST, which was in serious trouble before Bain bought it and ultimately could not compete with low-cost foreign manufacturers—turnaround efforts fail.

Obama wants to avoid the pain that inevitably accompanies this profit-driven, competitive discovery process. To get an idea of the alternative he has in mind, consider his $840 billion stimulus package, the success of which he measured by jobs "created or saved," regardless of whether those jobs were worth doing.

Unlike a private equity firm's turnaround plans (or any other company's investment decisions), this approach prizes inefficiency. As far as Obama is concerned, the more people it takes to accomplish a given task, the better. The same employment-focused logic explains his embrace of the broken planet fallacy, which holds that global warming is an economic boon because it creates "green jobs."  

Obama's job fetish was also apparent in his response to Romney's recent remarks about the importance of increasing productivity, or output per worker. "The problem isn't that the American people aren't productive enough," Obama said. "You've been working harder than ever."

Hard work is not an end in itself. A farmer who tills his field by hand indisputably works harder than one who relies on machines. And because the old-fashioned method is less productive, it increases employment in the agricultural sector. That does not mean we would be better off with Stone Age farm technology.

Contrary to Obama's message, wealth creation is not just the obsession of rich investors; it is the key to prosperity. Precisely because of the discipline imposed by the possibility of failure, individuals concerned only about their own profits create more jobs accidentally than central planners who "take into account everybody" can hope to create on purpose.

Jacob Sullum is a senior editor at Reason and a nationally syndicated columnist. Follow him on Twitter.

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  1. “Profits over people” Glad to see this election will be about the issues and not just meaningless slogans. Seriously, this line should have been thrown out 100 years ago.

    1. When all you’ve got to run on is meaningless slogans you try to make lemonade.

      1. Just don’t you dare try selling that lemonade without first getting the proper permits, licenses, etc…

        1. Free the Lemons. Free the 5 year olds. Death to the health inspectors.

          Or something like that.

    2. So Obama’s (unintentional) criticism of Romney is that Romney is a good businessman.

      Um…

    3. I’d like to see “profits over people” go into retirement with “keeping our promise to seniors“.

    1. Good point!!

  2. aaaaarrrggghhhhhhh.

  3. “That does not mean we would be better off with Stone Age farm technology.”

    [insert ‘choom gang’ joke here]

  4. Another adviser, Robert Gibbs, put it more succinctly on Face the Nation last Sunday. “He’s very good at making money for his partners,” Gibbs said of Romney, but “he’s not so good at creating jobs.”

    You know…just because he stopped being press secretary doesn’t mean he stopped being a douche.

    1. Yeah, he should have stuck to singing close harmonies with his brothers

      1. That sounds like eliminationist rhetoric to me.

  5. I think Obama understands capitalism perfectly well. He also understands that embracing capitalism is not the way to get elected as a Democrat.

    1. I think Obama understands capitalism perfectly well.

      So do I, Obama’s not stupid, he gets it. But what he really understands, in depth, is Chicago politics. Long read from Steve Sailer:

      http://isteve.blogspot.com/201…..bamas.html

    2. I wouldn’t say anyone understands capitalism perfectly, but certainly the government’s job is not to maximize revenue, but it has had, for the last 75 years, a Keynesian role in increasing aggregate demand during a downturn.

      The author goes off the reservation though when he compares the modern American worker to a stone age farmer. US worker productivity has been increasingly incessantly since WWII, but wages have not. Even lower-order primates could figure out that’s a shitty deal.

      1. “See, to a guy like Josh the computer never happened. He’s still stuck in the fifties The racist, racist fifties.”

        1. The 50s, when everyone was too much alike, and people were “square.”

          People were alike because of high taxes on the rich.

          The 50s weren’t as racist as other times, before. Truman may have signed an order integrating the military, but Eisenhower, as President, actually made it happen.

          I was programming computers when I was 9 years old. Back then that meant BASIC on an Apple ][e.

          1. “Back then that meant BASIC on an Apple”

            And in your world, that’s still what it would mean.

            1. Did you somewhere get the idea that I was calling for the nationalization of the software development industry?

              C and UNIX came out of Bell Labs. The entire backbone of the internet is based on C and UNIX.

              They came from the monopoly ATT. How come private enterprise failed to miserably, while these computer technologies, developed in the 1970s, haven’t changed, in any fundamental way, at all.

              Must have been a fluke. A one time monopolist’s monkey typing out Shakespeare.

              Way to go out on a limb and sound retarded, alan_s.

              1. I thought Unix came from Berkeley. Along with LSD. At about the same time. Hmmmmmmmm.

                1. It came out of Bell Labs, and Berkeley quickly started their own version, called BSD. These two main versions became the bases for most future unices. There are still a lot of people who like FreeBSD, NetBS and OpenBSD, which are a lot like Linux, but based on BSD instead of SYS V.

                  1. “People were alike because of high taxes on the rich.”

                    Now we see your true colors.

                2. I agree with JoshSN. When I was at Berkeley, they had just recently acquired Bell Labs’ Unix and were hard at work on what would later be known as BSD. Bill Joy was a wunderkind grad student there. I saw him often in Evans and Cory Halls. Wozniak was still phone-phreaking (and unknown to me until he became famous for Apple I II, a little while later).

          2. It could have meant Pascal or Modula-2 on an Apple ][e. Even then, you had choices for increasing productivity, and elevating quality. Programming in Java or Python is a bit of an improvement, but only just barely, imho.

      2. Rising productivity means lower prices.

        What’s the point of higher wages if that means everything costs more?

        Wouldn’t it be a wash?

        1. That sounds like a fair point, if and only if all the gap between wages and productivity went into lower prices, and none went into higher rents, input costs, or profits.

          1. I find that “if and only if” is usually a setup for a false dichotomy.

            You did not disappoint.

          2. Please explain to me how the average poor person in this country has a cell phone, air conditioning, a flat screen television on which they watch cable and play video games, a computer, internet, and so much cheap food that they’re obese!

            I’d rather be a modern American living in poverty than an 18th century king!

            Your envy is pathetic.

            P
            A
            T
            H
            E
            T
            I
            C

            1. First you complain that a economic fact is somehow a false dichotomy, then you put forward the question whether or not I’d rather be in poverty today or an 18th century Monarch?

              Irony much?

              By the way, I don’t think you know much about poverty if you think most people below the poverty line near here (NYC) have all those things.

              1. You seem to be missing the point, Josh. You made the claim that wages have not been rising while productivity has. Sarcasmic is making the point that nominal wages are not the issue. The issue is total compensation and whether the life of an average American is better today than it was in your idyllic past.

                And on that issue, there can be no argument. While nominal wages may not have risen all that much, their purchasing power certainly has. Cell phones, computers, televisions, electric appliances, airline tickets, etc etc etc. All instances of the hard-earned money going further than ever.

                And mortgages certainly aren’t the counterexample you claim them to be. Historically, the Case-Schiller index has tracked inflation pretty damned well. It’s only in the last few decades of fucked up federal housing policy that mortgages skyrocketed.

                1. Current events demonstrate that the fucked up policy at the fed and fannie-may only resulted in a bubble — and everyone who bought a house in the past 10 years has been screwed. Market 1, Fucked up Fed 0.

                2. No, I think you are missing the point.

                  sarcasmic’s argument only makes sense if a few things are true. First, the savings from reduced wages must reflect lower prices, and not increased rents, input prices, profits, or sales promotions. Otherwise, the stagnant wages won’t be able to buy the equivalent basket of goods.

                  We know this isn’t true, though. For example, you point out that although wages have been stagnant, Case-Shiller has been way above that for the last few decades. This impacts both the rents/mortgages of the workers and the price paid by the manufacturers for the goods they purchase.

                  And don’t be an asshat and say I’m pointing to an idyllic past. You are the ones putting out this totally bogus choice matrix.

                  Wages can be stagnant, with all sorts of new things to buy, or they could be rising, with all sorts of new things to buy. Those are the two choices, and worker productivity is rising either way.

                  You guys are fine with lower wages. Fine, that’s you.

                  1. Wages can be stagnant, with all sorts of cheaper new things to buy, or they could be rising, with all sorts of more expensive new things to buy. Those are the two choices, and worker productivity is rising either way.

                    -ftfy

                    1. You seem like a great employee, sarcasmic! You are hired.

                      No matter how much better you get at your job, no matter how much more productive you become, you’ll argue that you can’t accept a wage hike, because it will increase the cost of the goods and services you want to buy!

                      What a champ!

                    2. Straw men are made of straw.

                    3. Also, stagnant wages != lower wages.

                      If my employer upgrades the machine that I operate, resulting in more efficiency, why should I get a raise? What did I do to help the company?

                      If I become more productive through experience and education, then the employer should reward me with higher wages. That creates an incentive to better myself and better the company in the process.

                      See the difference?

                    4. In that first case I still benefit. Assuming other wigit factories are also upgrading their machines, then prices will drop.
                      My wage may remain stagnant (stagnant does not mean lower, it means stagnant), but the stuff I buy is cheaper. That means more money for other stuff.

                      Save money. Live better.

                    5. There was no straw man.

                      If all increases in productivity were simply based on capital improvements, you’d have a point. Even granting that half are, you are in a hole.

                      And your asshat comment “See the difference” sort of proves I’m dealing with someone quite average.

                    6. If all increases in productivity were simply based on capital improvements, you’d have a point. Even granting that half are, you are in a hole.

                      I’m not making that argument. Therefore your arguing against it is a straw man.

                      And your asshat comment “See the difference” sort of proves I’m dealing with someone quite average.

                      You follow up your straw man with an ad hominem.

                      Go fellate some fallacies.

                    7. Also I never said anything about lower wages. You did.

                      All you’ve got is well practiced arguments against men of straw.

                      I’ll make a mental note to ignore you in the future.

                    8. I’ll go slow, just for you.

                      You say that, by preventing wage increases, we all benefit, because the costs of goods and services will be lower.

                      This is only true if the other costs of production are also kept from increasing. This is, in fact, not happening. Someone brought up Case-Shiller, which shows that land costs have gone up a lot more than the rate of inflation.

                      Feel free to ignore me, though, because so far, as far as I can tell, you’ve contributed nothing.

                    9. You say that, by preventing wage increases, we all benefit, because the costs of goods and services will be lower.

                      No, that is not what I said. I said that when the costs of production decrease, and wages do not increase, that we all benefit from cheaper goods.

                      I said nothing about preventing anything. You’re making shit up so you can argue against it.

                      Feel free to continue to slay men of straw.

                    10. Wages are a cost of production.

                      Amazing logic skills you have.

                    11. a != the

                      Amazing lack of logical skills you have.

                    12. I’ll bet spittle flies out of Josh’s mouth when he types the word “profits”.

                    13. CORE-POUR-RAY-SHUNS!

                      AAAAUUUUUGGGGGGHHHHHH!

                    14. Well and succinctly stated. Thanks for increasing the light/heat ratio.

                    15. My “well and succinctly stated” reply was to Sarcasmic’s post of 5.30.12 @ 3:10PM. The server squirrels positioned my remark in such a way that people might have taken it as ironic or sarcastic, but I was sincere. Good point, Sarcasmic.

                3. Fifteen years ago, the Dallas Fed published a great essay, “Time Well Spent,” which compared TIME taken by workers to earn a living in past decades vs. the present. As I recall, their basic conclusion was that, by most measures, we were living better and working fewer hours to earn that living, than at any time in America’s past. I wish they would revisit that topic and update their essay — perhaps for its 20th anniversary?

                  Here’s a link to the original: http://dallasfed.org/assets/do…..9/ar97.pdf

      3. This is public domain data massaged by LBO

        Massaged how? The problem with increasing aggregate demand during a downturn is government has to get the money from somewhere. They can print it, borrow it (deferred taxation), or from taxation. This reduces money available by citizens to spend as they see fit. The other issue is that during the upturn, government never pays the debt down.

      4. Not really, if those same wages can buy you more and better shit on account of the productivity increases.

      5. Gee, I wonder if the increased American productivity has more to do with increased capital investment, given the abysmal education our work force is getting and the continuing sense of entitlement. Just sayin’

      6. “US worker productivity has been increasingly incessantly since WWII, but wages have not. Even lower-order primates could figure out that’s a shitty deal.”

        Think about the definition of “productivity.” One common way to put it is “worker value out / worker value in.” That is, productivity increases when more units of value come out of the worker than previously, assuming equivalent input before and after. If wages (one component of value-input) were to increase in step with an increase in value-output, then value-based productivity would tend to remain constant. If value-input were REDUCED while value-output stayed the same, productivity would also increase. Only when the growth in value-output outpaces the growth in value-input, do you have net productivity growth. So, for wages to increase appreciably while productivity rises, value output must increase much more appreciably. If US value output has been going way up while value input remained more or less stagnant, then I agree that someone has been getting a raw deal. Do the data support that idea?

    3. This, exactly. It was the same way with his speech in Canada when we all briefly wondered whether he had completely forgotten Marbury v. Madison, or the dozens of times that the SC has overturned a law passed by Congress and signed by the president: he wasn’t speaking to people who know better, he was talking to the idiots marching around with insipid protest placards.

    4. Re: some guy,

      I think Obama understands capitalism perfectly well.

      Just like he gets submarine apes well.

    5. Right in the first sentence, wrong in the second; He understands that wealth creation gets in the way of his making America a Third World Nation on a par with Kenya – too damn many white people making money out there when they should be living in huts!

  6. Dude makes a whole lot of sense man, Wow.

    http://www.Anon-Software.tk

    1. And I’m sure those words were prepared, which makes the ignorance much worse.

    2. You’d think he would have learnt after announcing the cancellation of missile defences in Poland on the 70th anniversary of the Soviet invasion of Poland.

      1. You can’t have it both ways. The whole point of that missile shield, if we are too believe the Bush administration, was to defend against a Middle Eastern missile attack. They repeated, over and over, that it couldn’t come close to stopping a Russian attack.

        But now you want to make it sound like he somehow empowered Russia, or gave some green flag to a Russian invasion of Poland?

        Fuck you.

        1. A ‘fuck you’ to defend a president that’s not worth a fuck. That’s commitment to a cause.

          1. Attack the President when there is good reason, when he tramples civil liberties in his effort to be more mendacious than Bush/Cheney.

            Don’t make up stupid shit, it undermines everything else.

            Unless it happens to be completely hilarious stupid shit, in which case, we all get a laugh.

            1. This is absurd, Josh. The Soviets were extremely opposed to the missile defense system even when the administration was claiming it would only protect against missiles from the Middle East. They knew that it’s a hell of a lot harder to build a missile defense that will protect against Russian nukes from scratch than it is to upgrade an existing infrastructure. Both technically and politically. The Middle East missile defense system was always about the long term goal of defending Europe from any missiles.

              1. Absurd or not, we all know that any Polish-based missile system would have been utterly useless against a Russian (the Soviets are long gone, bud) attack.

                1. Sorry, dude. I forgot that those Soviet-made weapons actually belong to Russia (the Russians have done little bomb-making of late). Way to be a pedantic (what’s your word) asshat.

                  1. I mentioned the Soviet/Russian thing as an aside. The main point is that it would be utterly worthless in a Russian attack, so whether or not it was withdrawn on the anniversary of a Soviet invasion of Poland is comparably utterly unimportant.

        2. Pretty sure the point was the cultural insensitivity, not the cancellation of the missile shield.

        3. Josh, we know why you liberals hate missile defense: You believe once an enemy has missiles, they have the right to be able to hit their targets unfettered.

    3. I think the only good thing George Bush ever did, internationally, was ban Margaret Thatcher’s son, Mark, from entering America, just as Monaco gets a point for kicking his ass out.

      1. I’m kind of amazed by this. A statist like you doesn’t love Medicare Part D?

        1. Medicare Part D was used as a stalking horse to privatize Medicare (the “Medicare Advantage” program that the ACA cut a lot from).

          And, anyway, I said “internationally.”

          Domestically he did something nice about banning engines from a National Park (Yosemite?) and helped create the largest natural protected area in the world (somewhere near Hawaii).

          There are a couple other things he did OK, but they are all pretty minor.

          But kicking out Maggie Thatcher’s kid, just as he was planning to move to Texas, that was actually just. Almost nothing Bush did was just.

          1. Sorry. Misread “internationally” as “intentionally”.

            1. Wow. Was Mark Thatcher going to invade America and take it over?

              Good thing Bush stopped that terroristic threat, what?

  7. I have asked this a thousand times and will ask it a thousand times more, for all people who think companies should not be about profits but hiring people what is stopping you ?

    It really is not that difficult to start your own company and hire as many people as you want.

    1. I don’t think asking it here one-thousand times is going to be the most effective arguing point.

    2. It really is not that difficult to start your own company and hire as many people as you want.

      Right. Witness TSA.

    3. I figured with a name like “Not Sure” you’d be some sort of Mike Judge fan.

      It takes capital to start any business, whether its financial or intellectual. Most people don’t have either.

      1. Had to look up just now who Mike Judge was, can’t say I like Beevis and Butthead.

        Yes it takes capital to start a business, so where does this capital come from ? Do you think things like the industrial revolution started because some wise government determined that this was the way to go, or was it because some individuals were driven by the profit motive ?

        1. “Not Sure” was the lead character in Idiocracy. It’s a crass movie, for certain, but basically 21st Century Fox made the picture, saw it, and decided to spend $0 advertising it. It’s a powerful message.

          1. I took this name because it was first thing I could think of.

            1. He brought up Mike Judge as a reference to Hank Hill, whom he was comparing you to, redneck-style.

              That’s how liberals roll.

      2. No, it’s just you who doesn’t possess any intellectual capital.

        99.7 percent of American businesses are small businesses.

        1. How does being a small business not imply there was a capital requirement for starting it?

        2. And employ less than half of the workforce.

      3. There’s your slick comeback, NotSure: “it’s too hard.”

        1. Raising the funds to start a car company? It’s easy, just ask “Trespassers W.”

          1. Jesus Christ. There are business models other than GM and Google.

            To start a small business, you need little financial capital. You need little intellectual capital for some kinds of businesses. Unless you think it’s all billionaire geniuses running food trucks and landscaping businesses.

            Anyone can start and run an unprofitable business; anyone with a little financial capital can create a job. Maybe not for long, but at least you’re putting people over profits, right?

            1. Forbes thinks it costs 100 to 300 thousand dollars to start up a small restaurant, including greasy spoons.

              You are right, most people are just lazy, and sitting on their 100s of thousand of dollars doing nothing.

              1. You’re missing the point that startup capital is not enough. Unless you only wish to hire startup workers for a short period of time. In order to continue to employ those workers, you need income.

              2. Josh, this is ridiculous. Since when does small business mean small restaurant? You’re cherry picking an industry here.

                I’ll do some picking of my own. My girlfriend started a private tutoring business right out of college. Her business model basically consisted of hiring tutors as self-employed contractors, finding them students, and taking some of the cash. Startup costs were about $1000 to purchase requisite textbooks on Amazon Marketplace and a ton of time doing marketing. She now has 40 tutors and brings in a bit more than $10k a month. There’s a $100k business for you started on basically nothing.

                Btw, if you wanna choose a good industry with high startup costs, why not talk about all the small business doing micro and nanofab shit? Semiconductor tools eat up millions.

                1. Damn! Just realized that Trespasser had already laid out some good examples of industries with low startup requirements.

                  1. Its ok DJ, Josh did NOT get it when Trespasser gave him an example either. Yo cannot fix stupid

                  2. Food trucks are cheaper than restaurants, but they aren’t cheap.

                    Definitely $40K to get going.

                    Landscaping? I live in NYC, so, that, of course, would never have occurred to me.

                    And we are all proud of your girlfriend, however, there is no way she didn’t use some money on her own rent and food until the money from all the people she put to work started rolling in. Whether it was you who covered her costs, or her mommy and daddy, someone was paying the bills.

                    1. You’re full of it Josh, you clearly suffer from a lack of life experience, and your above statement is deeply insulting to anyone who has done well for themselves by virtue of their own efforts. Just because you lack the imagination to conceive of such people, it doesn’t mean that they don’t exist.

                      I have been self-employed since my early twenties. I never had any startup capital, nor did I have backers, be they friends, family, or otherwise. In fact, I distinctly remember at the beginning, having a grand total of 7 dollars to my name, a cupboard full of ramen noodles in the apartment I split with a friend, and the title to a prematurely rusted-out Oldsmobile Firenza. You work a regular job during the day, save as much as possible, deny yourself luxuries — in other words, you do what it takes.

                      But I’m just one more inconvenient anecdote, right?

                    2. As an anecdote, it lacks a lot of the details which would make it useful to prove your point.

                      Did any start paying the bills so you could abandon your day job?

                    3. Which part of having seven dollars do you not understand? That is the salient detail. At that particular time, I used the last of the fuel in my tank to go and change in coins I had laying around for cash — which was enough to tide me over until paychecks would start from the job I’d just started. This is how things work out there in the real world.

                      And your second sentence shows you really do not grasp the requisite thought process — ‘quitting your day job’ does not necessarily even occur to a person who’s going to be successful. That is not the goal — if it is, you are in it for the wrong reasons, and will likely fail.

                      You don’t do it to quit your job — you do it because you have some kind of vision and a passion for seeing it happen. You most likely even have qualms about leaving your job, since you understand it might be a hardship on the person who’s been employing you, if that was a small business too. But at some point, you just don’t have the time to do both anymore; once that happens, it’s not difficult to predict what you’re going to do next. Small employers are well-acquainted with this; some employees, you know are forever, while others, you know the first day, they’re not going to be around for long — they’re too good, and you know that eventually, they’re going to realize that.

                      But to answer directly, no, nobody has ever picked up my bills. With respect to parents, and others, it has been quite the opposite at various times.

                    4. Well, in your imagination, not based on anything I’ve said, you are certainly the conquering hero. HAIL!

                      You, motherfucker, said you started a business with the capital you raised from your day job. Was the goal to work two jobs, or to work on your business? The idea is to “quit your day job” to put your full efforts into your business.

                      I never asked if anyone picked up your bills, I asked if any of these businesses you started paid your bills. You already said you had a regular job to cover the costs during the start-up phase.

                      So, you imagined a lot of horseshit that I didn’t ask, and never answered the question I did.

                    5. Pardon me, I misread that as “did anyone start” — my mistake. To answer your question, then, I’ve been required to file schedule C for around twenty years, and have been solely self-employed for the last fifteen or so. The goal was not, and often is not, as black and white as you seem to want it to be: I’ve known very few people who started with a fully-formed concept of what their business would eventually become; most start as something on the side.

                      For instance, a friend of mine started a sheetrocking business while we were still in high school; by now, that has turned into his being among the largest home builders in our metro area. He didn’t get any help either — his family couldn’t have helped him if they wanted to. I still remember when his dad quit his job to go and work for his son, followed by his mother, sister, brother, and I don’t know how many of our friends from high school.

                      So what you read as arrogance is not that at all: I relate this to counter your assertion that people require help to succeed in building a small business. That’s not the case — anyone can do it if they don’t have someone like you telling them they can’t.

            2. I started my business with a $100 line of credit from a hardware store. Paid it back a week later, and built on that.
              But I never hired someone because he needed a job. I hired people if I had work for them, and could make a profit using them.

      4. Here’s a business that requires little financial or intellectual capital: go to Home Depot, buy a shovel, and pay someone minimum wage to dig holes in your yard.

        It’s not a profitable business, but you’re creating jobs, which is what’s important.

      5. Let me guess. You’re a millenial, arent’ you? Most other people don’t think they were somehow or another shafted because Mommy, Daddy, or Uncle Sam didn’t buy them a company.

        1. So much for your guessing skills.

          I’m 40 years old. I live in Manhattan. I direct a small program that a multi-billion dollar company has purchased our company for.

          1. And yet you end a “sentence” with a preposition?

  8. Dear Progressives,

    Jobs are not an end in and of itself. Thank you.

    1. But…but….men in hard hats*! Jobs! Green Jobs! The Inscrutable Chinee!

      *Fun Fact: The hard hat was invented by Franz Kafka.

      1. Circa 2006, an otherwise intelligent friend of mind advocated using the most man-power intensive means possible to get people to work in Iraq to distract them for getting all Jihady and blowing Americans and each other up. This was in my proto-Libertarian days so I did not have the arguments to rebut this ridiculous proposition.

        1. Later, to stop the violence, we just started paying, for pretty much absolutely nothing, the Sons of Iraq.

          We just put our enemies on the payroll.

          Your friends idea made more sense.

          And, that, not the “surge,” is really what ended the violent period in Iraq, 2006-2007. That and Petraeus is a General while Casey is a sock puppet.

          1. From a tactical miltary point of view there is some merit to either paying the SOI or finding “make work” jobs for Iraqis to do. The intent was to drive up the cost of doing business for AQI (which IMO was pretty well nutered after Zarqawi got blowed up, but still a threat) or JAM. The idea was to pay your “casual” jihadi more to do little to nothing than they would make burying IEDs.

            Outside of that very narrow strategic perspective either idea is and was dumb. Busy work is rarely productive, the costs are usually higher both in the initial construction and there are additional costs in repairing the inevitablely poor work that is the result of such projects.

            1. The worst year was the year after Zarqawi died.

              There was a ton of work we could have managed in Iraq to make it far more livable. Street sweeping. Dentistry. The whole works.

              1. So, you wanted someone else to pay the Sons of Iraq?

      2. “*Fun Fact: The hard hat was invented by Franz Kafka.”

        Oh, the retrospective irony.

        Back in the day, as a finish carpenter working on a row of cookie-cutter townhomes, it was part of our contract to install 24″ plastic Levolor-style blinds in the bedrooms. This happens during ‘final’, which is when you come back and install door knobs, etc, meaning that the state of the jobsite is that of a finished home, with occupants slated to be taking up residence within a week or so. You’re working on carpet and finished floors — you do the job in socks.

        At some point, OSHA came on site and told the general contractor that in order for us to hang those blinds, we had to be wearing hard hats.

        1. That’s when you drop a Levolor blind on the OSHA inspectors head then ask where his hard hat is.

    2. Re: 35N4P2BYY,

      Jobs are not an end in and of itself. Thank you.

      The problem is that the political narrative has turned into a job-creation contest, as if job creation was an end to itself.

      People forget or don’t want to see that their labor is a COST. It is NOT the end of productive efforts, it is only part. The end of productive efforts is the PRODUCT, not the labor that went into it.

      A job has to add value. This is what many people in the left (and many in the right) do not understand. If labor – which is a cost – does not lead to a product that others want, then that labor is WASTED.

      Job creation is a canard. Any idiot can create a job. The question very few posit (either because of ignorance or obfuscation) is if the jobs are productive. That’s the key.

      1. ^This to the umpteenth^

      2. Bingo! I would actually posit that most of our elected officials, with a few notable exceptions, subscribe to the belief that full employment is the desired end. This delusion is held by a disturbing number of politicians of all political stripes.

  9. Obama’s job fetish was also apparent in his response to Romney’s recent remarks about the importance of increasing productivity, or output per worker. “The problem isn’t that the American people aren’t productive enough,” Obama said. “You’ve been working harder than ever.”

    Basic misunderstanding of what “productivity” means. If you can get all your work done in less time, your more productive and you work LESS, not more. Less productive people work harder to make up the difference. More productive people have the option of sacrificing increased earnings for more leisure time.

    1. Yup. I have basically the same job I had in 1988. I’m just making an educated guess here, but I would say I do 3 times the work I did then, almost never travel anymore, and have more leisure time. And, maybe this is even more important, revenue per employee is 10 or more times what it was then – in inflation adjusted dollars.

      1. Barry meant to say “workers control the means of productivity”.

  10. alt-text: “Excellent.

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  12. “Profits over people”

    Most people place a moral judgment on profit-seeking because they do not understand this economic concept. Not only is profit-seeking not immoral, it is a moral imperative to seek profits. Why? Because profit-seeking is what drives people to improve their situation. It is what turned a host of savages roaming the plains of Africa into humans. It is what differentiates us from the lowly beasts of nature. It is what makes us humans find the better path, the most productive path possible. It rises people from poverty.

    As long as profits are obtained through voluntary and free exchange, they will always be moral.

    What IS immoral is to steal, enslave or kill, which is what government does in the form of taxation, conscription/forced schooling and war.

  13. My job is to take into account everybody, not just some.

    OK, Daddy-in-Chief, thank God we have you watching over us childr…, urm, I mean, citizens.

  14. Someone needs to start a company which employs its workers to dig holes and fill them back up. Nothing more. Then, when it goes bankrupt, that person can pretend to be some concerned citizen who makes a political ad lamenting all the jobs that were lost at Dig n’ Fill. Since all people seem to care about are jobs, rather than economic value, I think the ad would be a winner.

    1. You joke, but for instance, I do recall reading comments (not here, but elsewhere) suggesting the outlawing the use of various types of heavy equipment on government infrastructure projects. Naturally, I felt like responding with the old “why shovels and not spoons?”

      1. I know. Instead of delivery trucks, workers should be using oxcarts. More people to move product, and all. Bring back the typewriter. Outlaw the internet. Anything to save jobs!

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  16. Leftists and Regressives quawk nonstop about people putting “profits over people”, yet they traditionally put ideals and sollipsism over people, frequently with catastrohpic (and often genocidal) results.

    1. Isn’t that the main complaint against libertarianism, that it’s all about ideology, regardless of what is good or bad for everyone?

      1. Libertarianism is about not initiating force to achieve political or social goals. What is good or bad for anyone is up to the individual. That this is a complaint says all you need to know about the gov’t school system.

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  18. one who relies on machines. And because http://www.ceinturesfr.com/cei…..-c-14.html the old-fashioned method is less productive, it increases employment in the agricultural sector. That does not mean we would be better off with Stone Age farm technology.

  19. to avoid the pain that inevitably http://www.lunettesporto.com/ accompanies this profit-driven, competitive discovery process. To get an idea of the alternative he has in mind, consider his $840 billion stimulus package, the success of which he measured by jobs “created or saved,” regardless of whether those jobs were worth doing.

  20. “…individuals concerned only about their own profits create more jobs accidentally than central planners who ‘take into account everybody’ can hope to create on purpose.”

    I believe this to be true, but I have seen no actual scientific studies or experiments that reach this conclusion, only very good explanations and thought experiments. Are you aware of any such research, Jacob? I’d love to read the associated papers, if you can point me in the right direction.

  21. One of the first ways of beginning that process would be to repeal all of the anti-opportunity legislation that has been foisted on the American people in the past few years.

    Thanks,
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