I am actually not a rabid, knee jerk, Obama basher/birther type. Let me disabuse you of that supposition straightaway. I basically have good will toward presidents because when they do well, we do well.
That said, the administration's "green jobs" and small business initiatives are misguided.
First, "green jobs." Green jobs is the kind of economic program someone who has never been in business would devise. Here's how it works. Certain entities (I am thinking of Microsoft, Intel, Apple, Google, Boeing and Amazon.com but you can think of whoever you want) make money. They're innovators. They have mastered the difficult task of investing in new technologies to create products that both please customers and turn a profit. These companies, and the experts who make them work, make the economy stronger by creating lasting businesses that employ people at high wages and at the same time provide for retirements and nest eggs everywhere. The government takes money from those entities, preventing them from reinvesting it. Instead the government spends it to pay people to do things that a rational investor or business manager or homeowner or whatever would ever pay for. Why won't people pay to have these green things done? Because they are not worth it. You wouldn't pay $50 to save $10 in heating bills would you? But if it's "green," then the green jobs program will pay for that. By paying for this green work, the government has turned the $50 it took from the innovating company, that would have gone to fund a new business, and turned it into $10. Like magic! The economy is now smaller and instead of creating jobs for more engineers to start tomorrow's businesses, we have trained more insulation installers...no offense.
I am sure that the green jobs program is very popular in high schools or generally in places where no one is very familiar with business. But it will hurt our economy. We should invest in green jobs when their are green technologies that actually create value.
Second, disproportionate favoritism for small business. Obama has announced lower capital gains taxes for investments in small businesses, plus graduated deductibility for small business investment in plant and equipment, plus $30 billion for community banks to lend to small businesses. I like the idea of reducing capital gains taxes in general, but government should not try to point capital in any particular direction. without government interference, capital where it will generate the most wealth for our economy. if it is going to create more value today to invest in a big business, let's let people do that. And if tomorrow it is time to buy plant and equipment and invest in small business, let them do that. If you mess with that flow, in the immortal words of Ned Beatty (well actually the writer Paddy Chaefsky) in Network, "you have meddled with the primal forces of nature, Mr. Beale." Or more plainly, you have taken money from successful companies and used it to distort make our national investment flow less rational and less effective. We all come out poorer for it.
My advice? Stop. Stop spending. Resist the impulse to come up with increasingly clever ways to pump up this and that. Take a breath. Take a little vacay. Let the people who know how to create value for the long term keep their money so that they can create value and good jobs for the long term. Find something presidential to do that does not involve the economy (or maybe foreign policy, but more on that another time).
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