Seeking Insight From My Republican Friends

I know most of my left-leaning readers think I’m well informed and reasoned and balanced in my political beliefs.

I know most of my right-leaning readers think I only see things through my blue-tinted glasses and that my political beliefs are narrow, biased, and off base.  And above all, I just don’t know what I’m talking about.

And I know there’s some of you that are somewhere in the middle.

Well, I want to take an opportunity for my conservative friends to educate me on a matter that I find confusing.  This is me asking for help, asking you to help me see the light, and to do so without any name calling, please.  I just want to understand your perspective.

Republicans have often said that government does not create jobs, and Gov Romney has made a point of stating that in all the debates.

However, Romney wants to build more ships and subs for the Navy.  If he becomes president, the Navy itself won’t build those ships, but will contract that out to public corporations like General Dynamics, Northrop Grumman, or Lockheed Martin.  Those corporations don’t have immediate staff on hand to build these vessels, and will have to hire more workers.  So in this case, the government was able to create jobs when they requested more vessels for the Navy.  Not to mention, many shipbuilding jobs are in the swing state of Virginia.

Republicans and Romney also state that a change in tax policy will create new jobs, that lower rates will free up more income to help small businesses and corporations grow (that’s my over-simplified summary).  A change of tax policy is a government action, so in this case, I feel like he’s stating that government action will help create jobs.

So that’s my perspective.  I’d appreciate any insight on how government isn’t able to create jobs from my conservative friends.  And please be kind, after all, I’m reaching out to you.

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17 Responses to Seeking Insight From My Republican Friends

  1. Bill says:

    I used to be right-leaning, but not anymore. At the risk of sounding snarky and scaring off responses from your right-leaning friends (and if you believe this comment does that, then please feel free to delete my comment), it seems to me that Governor Romney is talking out of both sides of his mouth–

    First, he cites the President's promise that he would get the jobless rate down to 5.4%, and says he hasn't lived up to his promise.

    Then Romney says government doesn't create jobs.

    Then Romney says he will create 12 million jobs during his first four years. (Which, by the way, has been predicted no matter who wins the election.)

    So which is it? Does government create jobs or not?

  2. steve says:

    Do you create jobs when you order a cheese burger ? NO, McDonalds creates jobs by making a cheese burger that people want to order…….. Thats about as simple as I can make it…… And the easier the govt can make it on McDonalds i.e. less taxes, the more McDonalds can expand thus creating more jobs. Raising the cost of doing business i.e. more taxes , will only cause your cheese burger to go up. So simple, even a liberal SHOULD be able to understand

    • Geeding says:

      Thanks for taking the time reply, Steve, but I never questioned the concept of lowering taxes on businesses would work create jobs. I wanted to know if government can create jobs, and that's something Romney and the Republicans say isn't possible. Your answer seems to say that government can create jobs by working on tax policy, and that would contradict the message of Romney and his party.

  3. kim says:

    The current administration and Bernanke have done as much as they can (within a left-leaning context) to encourage businesses to invest and hire…but business doesn't trust Obama AT ALL. So they've been sitting on capital. If Obama wins, expect a huge selloff to convert capital to income this year….because everyone will be counting on higher taxes. If Romney wins, who knows? We can't lower interest rates or taxes, and they know it.

    Government does create jobs with direct investment (boats, planes, roads). But it's hopefully dwarfed by private sector job creation. Jobs would exist without the government, so conservatives believe we should get the government out of the job market as much as possible, i.e., lower taxes, less regulation, etc.

    The current administration screwed up by not copying FDR's employment programs (WPA, CCC) and by not punishing Wall Street at all. If he'd done that, he'd be a shoo-in for reelection.

    My problem with the left is that they believe that theirs is the side of angels. Democrat politicians are just as crooked, greedy and untrustworthy as Republicans. Democrats are rose-colored glasses optimists and Republicans are pragmatists. I'm very conservative, but not Republican. I can't for the life of me understand why ANYONE would vote for Obama, nor can I understand how anyone can stomach Romney. I did vote Republican today, mostly because I despise Pelosi and Reid more than Boehner and McConnell.

  4. shawnwilson says:

    I think the government can create jobs by how they conduct their business by changing tax policies, fair regulations, etc. I know personally I would love to see the Fair Tax as I think the government would bring in more money and businesses would have more money to use for expanding. I know I would love to see the income tax removed from my paycheck along with not having to pay per employee. There are lots of things the government can do to "create" jobs.

  5. Brokelyn says:

    I'm not in the conservative camp and I'm going to bite my tongue about my opinions. What I'd like to contribute to this discussion are some fact and these facts show that the Federal Government has been getting smaller through the years, both in terms of the actual number of people on the Government payroll and in terms of the portion of all citizens directly working for the Government. According to the Office of Management and Budget, here are the number of people (including full-time equivalents) who were on the Federal government payroll. There are three numbers for each line: 1) The number of civilian employees of the Executive branch

    • Brokelyn says:

      2) Total US population; 3) % of US population working directly for the Federal government.

      1962 (Kennedy) 2.48 million 186.5 million 13.3%
      1964 (Johnson) 2.47 million 191.8 million 12.9%
      1970 (Nixon) 2.94 million* 205 million 14.4%
      1975 (Ford) 2.84 million 215.9 million 13.2%
      1978 (Carter) 2.87 million 222.5 million 12.9%
      1982 (Reagan) 2.77 million 232.1 million 11.9%
      1990 (Bush) 3.06 million* 249.6 million 12.3%
      1994 (Clinton) 2.9 million 263.1 million 11.1%
      2002 (Bush) 2.63 million 287.8 million 9.1%
      2010 (Obama) 2.65 million+ 310.3 million+ 8.4%+

      To your point, Keith, the government increasingly pays private companies to carry out certain functions previously done by Federal employees, so that does explain some of this decline. So it confuses me too when I hear the argument that Government needs to shrink, though I suppose the point of those making this argument is that the Government needs to shrink its spending. The economic principle behind this argument shows that every layer of interference between those who buy and those who sell goods creates monetary friction, and this friction represents lost productivity (like when you use your brakes, all the speed you lose is permanently gone–the gasoline you used to generate your speed has been burned, but you no longer have the mileage to show for it). Taxes and tariffs are primary sources of friction. Conservatives believe that by minimizing this friction, less money will be wasted (by the government) and therefore more will make it back into the economy, which will drive growth and jobs. That's trickle-down. It's Darwinian. It's Capitalism with a capital "C" and perhaps a few more capital letters too. It's absolutely fantastic in economics classes, but fails to translate well to the human condition. I better stop now.

      • chuck says:

        Please explain to me Brokelyn, if I have a extra $150.00 each month in my household because of reduced taxes, how that will not help the economy? Every person, will spend at least a bit of that money, minimum $5.00 I bet…..most right wingers will save it. I do not understand your logic, and I took economics in college…..150M (1/2 of 310M)people spending $10.00 each per month….18B of extra domestic or foreign goods bought by the people of this country in one year…please tell me where I am wrong in thinking we can not grow jobs without the gov't…

        • Brokelyn says:

          Chuck that's a great question. Classical economics (Chicago school/trickle down) suggests that your scenario is the right one. Put money in the hands of people and they will spend it, thereby creating money velocity and economic growth. It makes sense. EXCEPT…when people are deep in debt. If we can agree that mortgage debt/credit card debt/student loan debt/etc. is a problem, perhaps crisis, in the country right now, then the following analysis will illustrate why the scenario you suggest will fail to stimulate the economy.

        • Brokelyn says:

          The US household savings rate is currently 3.7% (people put away 3.7% of their paycheck in the month of August). Since 1959 (earliest date the statistic was tallied), the average rate was 6.9%. So we're saving a LOT less then we have, on average, over the past half century. Here's the thing. During the "boom" days we saved as little as 1.0% (April 2005). That spending spurred inredible economic growth in the country. Growth, we now know all too well, that was unsustainable and that left terrible scars on our financial stability. Since then the savings rate has fluctuated a great deal, but the key trend has been up. In other words, people are socking away their savings instead of spending it and because we are still well below the historical average, it is likely that people will continue to save rather than spend. In the long-term, that savings is generally healthy, but this is not the time for it. Every dollar saved by households today slows the recovery — which is the opposite of what your conclusion suggested (even though your idea makes perfect sense to me).

        • Brokelyn says:

          (part 3)

          I think we can reduce the role of government spending (as my previous posting showed–this has been the long-term trend through Democratic and Republican Presidencies), but timing matters. The hole we're in right now was dug over many, many years, and in order to climb out it requires very strategic, and sometimes counter-intuitive, decisions. The "free market" approach will get us there, but it will create a lot of other unintended consequences such as deep (much deeper than current) regional financial harships, concentration of labor in fewer, more centralized locations, the reduction of vital long-term R&D in any number of fields, increased burdens on the sub-productive (elderly, homeless, children, etc.). My data, by the way, is sourced from the St. Louis Fed (PSAVERT data set).

    • Brokelyn says:

      darn it, the bulk of my posting was cut off 🙁 Sorry. Feel free to delete.

  6. Stefanie says:

    My understanding from Romney (right conservative) is that the FEDERAL government should be small in our daily lives. So, his approach is to cut federal spending on entitlements and job programs (such as building highways, involvement in eduction, etc). That's very different from the military spending because military is an agreed upon federal function since it collectively protects all of us as a whole. Now, this doesn't mean he's against entitlements and job programs. It just means he believes these should be STATE government expenditures. So, it's more about whose balance sheet should have which items.
    So, when I hear Romney say the government shouldn't be responsible for creating jobs, I've always thought he meant the federal government should not have job programs. It's sort of the same policy he has on health care – that it should be managed at the state level, and not at the federal level. He's not against job programs…he just doesn't think this is a function of the government at the federal level. Versus, when I hear Obama say government can create jobs, it's about the federal job programs. Now, there, the method could be the funding state run programs but that funding is under discretion of federal policy and control.

    Again…without any emotion or opinion in that…this is how I've interpreted the job creation policies. Of course, this is also all tied to taxation, as well.

    And, apart from the candidates themselves, this has always been my understanding of the main difference between Republicans and Democrats (without all the political rhetoric thrown in, obviously).

    When evaluating a candidate, I first make my stance on the role of government. Then, I listen to the party platform. Then, I listen to the candidate mostly to learn which policies I know they are going to target. If they aren't talking about it, they will probably leave as-is.

  7. Heath says:

    Keith, the video I've posted is a real unbiased look at our budget problems.

  8. Steve Hayes says:

    I'm not sure that any Republican thinks the government can't create or at least help create jobs. Romney is, after all, running on a platform that claims that he will create or help create more jobs. So, when you hear Republicans complain about the size and scope of the government, it mainly has to do with things that the government is doing that make it more difficult to create and maintain jobs.

    When our tax rate on businesses is higher than most other countries, that's a job killer. When companies that deal in finance or energy or manufacturing are over-regulated, that's a job killer. When the average citizen can't work on his or her own house without the obstruction of permits, taxes and fines, that's a job killer. When low income families are being subsidized by the government and are living on welfare and food stamps, there is no incentive for them to work, and that's a job killer.

    The government can and should help create jobs, but it should not be the primary source of sustenance in this country. Right now there are 22 million people who work for the government, and 67.3 million people who receive government subsidies. The federal government spent more taxpayer dollars than ever before in 2011 to subsidize Americans. The average individual who relies on Washington could receive benefits valued at $32,748, more than the nation’s average disposable personal income ($32,446).

    At the same time, nearly half of the U.S. population (49.5 percent) does not pay any federal income taxes.
    In the next 25 years, more than 77 million baby boomers will retire. They will begin collecting checks from Social Security, drawing benefits from Medicare, and relying on Medicaid for long-term care. As of now, 70 percent of the federal government’s budget goes to individual assistance programs, up dramatically in just the past few years. However, research shows that private, community, and charitable aid helps individuals rise from their difficulties with better success than federal government handouts. Plus, local and private aid is often more effectively distributed. These numbers are staggering, and it's simply crazy to think that the situation we are in is somehow sustainable. So, Democrats seem fine with those numbers, and have no plan, as far as I can tell, to deal with this problem. Republicans have at least shown an interest in trying to deal with what is plainly unsustainable and out of control. For that they are viewed as heartless and lacking compassion.

    I think what Romney and others are saying in this campaign is that the government needs to step back and work in a balanced way so that people have opportunity to better their lives by their own initiative rather than by the long arm of the government. Initiative built this country, and it will sustain this country. In my opinion, Democrats are robbing this country of initiative and replacing it with bailouts and handouts.

    So, when Romney says the government does not create jobs, what he means is that the government's primary job is not to create jobs for you and me, but is instead to help support initiative and make it easier for the private sector to participate in the glorious pursuit of life, liberty and the American dream through the vehicle of capitalism.

    • Brokelyn says:

      Steve, I work in the financial services industry. We NEED to be regulated.

      When a single person can influence how billions of dollars are invested in any particular moment, there is a clear incentive to push the rules of engagement as far as possible in order to maximize returns. Free market proponents think this is a good thing. "Let the markets balance themselves." As an insider, let me tell you that it is not. It is terrifying.

      By the way, I influenced the movement of nearly $600 million of a single stock today. It was a routine thing. Were we playing by different rules, the things I could have done with that trade would have made you feel sick. It makes me sick thinking that some of my less-honorable competitors do in fact exploit the fact that the SEC is not well-funded and therefore misses a great deal of fraud and securities crimes. In theory, regulation creates friction and therefore slows growth; however, for the same reason why we have cops on the streets, we need cops on Wall Street.

  9. Brokelyn says:

    Please try not to think about these things in sound bites and from campaign slogans (from either camp). Look at the facts. For example, this argument about corporate taxes. According to numerous reports, 10 public companies have relocated outside the US since 2010. What doesn't get equal air time is that since 2010, Toyota and Honda have invested $34 billion in the US and now employ over 40,000 people at 29 plants and 33 R&D centers. 70% of Toyota's auto sales in the US are sourced from North America and they shipped 145,000 vehicles from the US to other countries last year. I'm citing only two companies here, but there are MANY other foreign companies that have moved their businesses to the US. The reason why we hear corporations bellyache about taxes is because they want to keep more of their money! It's their JOB to fight taxes–they are supposed to drive shareholder value. The fact is that if the US reduces rates, corporations will repatriate foreign income at a faster pace. That will bring cash back to the US, BUT it also provides GREATER incentives to companies to generate profits overseas (which gives them incentive to hire workers overseas). Unintended consequence!

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