State of California has an excess of 500 agencies

by Jefferson Pinto

Sept/Oct Sp 2011, VIEW #40: As kids, we would go to birthday parties and wear the standard issue cardboard cone party hats with the elastic bands that wrapped around into your jaw. Inevitably we would play the obligatory game of musical chairs. You know, the one where each round has one less chair than participants.

For a moment, think of how much fun it would be if there were 10 chairs and 1,000 participants? Now you know what it feels like looking for a job in this economy.

The two businesses that seem to be thriving are career coaching and resume writing.

Job Creation? The government keeps recycling and chanting “Job Creation! Job Creation!” It’s not that simple folks. The government, state, federal, local, has proven it knows how to create jobs – Government jobs. The government has clearly demonstrated its ability to create government jobs. Take the State of California for example; it has in excess of 500 agencies.

As this country has prospered over the past 100 years, our government has become bloated. In good times, with U.S. global dominance, we could afford to pay for the bureaucratic blubber. However, in the world of today, taxes at the individual and corporate level are embedded in the cost of every good and service and are hindering our global competitiveness.

"I randomly picked up 20 items throughout the store and observed 19 out of 20 were not made in this country."

Consider this: The largest number of new jobs are created by small business – one at a time. But it’s big business that has wiped away thousands of jobs with the stroke of a pen. In reality, our job base has been eroding for some time. The largest portion of job losses have been in the manufacturing sector. The real estate boom masked much of the erosion. But when the boom went bust and the dust settled, the mass erosion was obvious, sort of like a famous movie star’s home teetering on the cliffs above Pacific Coast Highway in Malibu after a storm.

"The government needs to create an environment that is at least equal to our counterparts."

I’ll Get By with a Little Help from My Retailing Friends, Maybe? The other day I went into my local national big box retailer. I did a little study. I randomly picked up 20 items throughout the store and observed 19 out of 20 were not made in this country. Not a scientific study, but I’m guessing the manufacturing jobs aren’t coming back anytime soon.

"The playing field includes: litigation environment, tax environment, regulatory environment, labor laws, etc."

What’s Wrong with this Picture? Business people are inherently greedy; they will not appease their shareholders with altruistic U.S. nationalistic pride. As is already illustrated, big business that can get it cheaper, easier, or better outside the U.S. will do so.

The government needs to create an environment that is at least equal to our counterparts. The playing field includes: litigation environment, tax environment, regulatory environment, labor laws, etc. Sadly, many foreign goods are produced and shipped less expensively than their U.S. counterparts. Small business is also driving overseas growth at the expense of this country by purchasing goods made abroad.

"With 1 in 8 Americans out of work, the unemployed don’t buy stuff and the economy doesn’t grow very quickly."

It sort of reminds me of an old Public Service Announcement de-marketing tobacco products. It showed a group of men at long conference table in a smoky room. “Gentlemen, every year we lose half a million customers. Well, technically they die…”

The companies that lay off U.S. workers not only lose employees, but ultimately customers too. With 1 in 8 Americans out of work, the unemployed don’t buy stuff and the economy doesn’t grow very quickly. Add to that, government indecision and media that has been chanting “double dip recession” for the past two years. To get Americans back to work, it’s going to take a whole lot more than President Obama’s proposal of one-time hiring tax credits, road infrastructure investment, and short-term tax credits to incent the long-term investment in U.S. factories and employees.

by Jefferson Pinto

Jefferson Pinto is a retired CPA, and holds an MBA from one of the finer accredited universities in the country.