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We Can All Become Job Creators

nytimes.com

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Re: We Can All Become Job Creators

#81

Post by brc »

eru wrote: post #64
nostromo wrote: post #52

Earlier quoted context omitted.

Your comment reminds me of my own personal frustration with our governance and current economy. I have a modest sum of money in various forms. The central bank in the US is basically said to me, "stop saving!" because interest rates are so low and inflation is likely to be high in the future -- there's no point. Saving is out. (You think we would have learned something...) So, let's look at possible investments. Real…

> So, I could find property to buy outright, but it seems that wouldn't being taking advantage of any real leverage. Why are you looking for leverage? Isn't 50% quite a lot of leverage?

Leverage is a returns multiplier. You might make 5-10% return on Real Estate, but add borrowing and you can increase the returns dramatically. As long as the returns are better than the cost of the borrowed money, everyone wins. If it doesn't, he loses because leverage works both ways. Leverage is vitally important in making money, whether it is through getting other people to work for you, or getting other peoples money to work for you. Any serious entrepreneur should have a deep understanding of the uses of leverage.

The problem is that artificial manipulation of the price of money (interest rates) gives a false signal for people to invest in an asset class, like real estate, because it artificially inflates returns. Real Estate investing contains many risks (the largest is lack of liquidity), so it doesn't make sense to invest large sums for a small return.

Re: We Can All Become Job Creators

#82

Post by brc »

hugh3 wrote: post #3

We need to stop talking about "job creation" and start talking about "wealth creation". It's easy to create jobs -- e.g. I can go round breaking windows with rocks and create jobs for glaziers. But creating jobs that create wealth -- that is, to create an opportunity for someone else to join their labour with my capital in order to build something that someone wishes to pay for, thus enriching all three of us... well…

I agree with you totally. The focus should be on increasing wealth through more production of everything.

Somehow we've ended up in a situation where everyone focuses on job creation at the expense of everything else.

Right now most families need two parents working in order to provide. I think many would be happier with one less parent working if they could maintain the same standard of living. That would be possible if one of the parents doubled their productivity. Yes, it's a crude example but shows that focusing on jobs, and jobs only is looking at the wrong metric.

Counting jobs is as foolish as counting lines of code developed rather than the output of the code. But because each job is attached to a person, we've all become blinkered to it, like a PHB counting lines of code and assuming progress is being made.

Wealth creation is simply the process of creating a better life through a combination of hard work and technology. When you live better you're more wealthy.

Unfortunately, just about every initiative I have seen from any government for the last 10 years has been about job creation, when wealth creation isn't even considered, or, if it is, in a distasteful manner, usually coupled with some reference to greed and profit. But the only way to create real jobs is to create wealth that people will willingly exchange their own labor for.

Re: We Can All Become Job Creators

#83

Post by brc »

qdog wrote: post #56
9999 wrote: post #31

Earlier quoted context omitted.

Hold your horses. Tell us more about this rock throwing, window breaking, glass making job creation plan of yours. This has been the most viable job creation plan I've heard of to date.

s/window/wealth holder's window/ It is often argued that the 'breaking windows' scenario is a fallacy because the capital redirected to fix the window would be used for something more productive, which is only true assuming a company or individual is utilizing this excess capital. So, you have to break windows where people are holding capital, ie: the owner of the window is wealthy. If you break a window at the local…

Yours is a common misconception of the Broken Window Fallacy.

Most people think the fallacy is just a statement about destroying things in order to create jobs.

While this is true, the deeper meaning of the fallacy is that every action has a consequence, both negative and positive. But the problem most economists and politicians have is that they only look upon the easily measured and obvious outcome (the work for the glazier). They fail to consider the non-obvious outcome, which is the tailor who sells one suit less, because the bakers money was diverted to the glazier instead.

The broken window fallacy is a tool to help us analyse all of the consequences of an action, rather than just the obvious ones. So, whenever a make-work government program is announced, all we hear about is the x,000 jobs it will create. What we don't hear about is the x,000 jobs that must not be created in order for those to happen. We don't hear about it because it's likely to be 1 job across x,000 industries, rather than x,000 jobs in 1 industry. The money for make-work programs must come from taxes, or from borrowings, which is just future taxes brought forwards. Thus, when people pay more tax, they must therefore spend less elsewhere.

This is not a request for a zero-tax environment, it is just a call to recognise the entirety of economic actions, not just the obvious ones. That is the broken window fallacy.

Re: We Can All Become Job Creators

#84

Post by Kliment »

amikula wrote: post #15
fleitz wrote: post #10

Earlier quoted context omitted.

At that point we've likely reached a point of abundance and can use the non-human labour we're using to provide a nice life for everyone. At that point the major metrics of the economy switch from something akin to GNP to Gross National Happiness.

Actually the people who had the wealth to build the non-human labor force become the rulers of our society. Their corporations will become the new governments and campaign against one another for control of resources. What happens at that point is anyone's guess.

This is a real danger. There are several ways to counter it. One is to make as much production technology as we can open source and ensure it is well spread. This is what the RepRap and Open Source Ecology projects are doing, and the progress has been tremendous over the past years. Publishing everything counters patent threats, GPL-like licenses prevent exploitation without contribution, self-replicating machines make the technologies both cheap and available. This is my favorite way of countering the threat.

Other methods include government intervention, revolution of the (ex-)workers, consumer boycotts (off the grid communities) and benevolent corporates. None of them are as effective, and very few of them can be worked on in the short term.

Re: We Can All Become Job Creators

#85

Post by nradov »

brc wrote: post #82
hugh3 wrote: post #3

We need to stop talking about "job creation" and start talking about "wealth creation". It's easy to create jobs -- e.g. I can go round breaking windows with rocks and create jobs for glaziers. But creating jobs that create wealth -- that is, to create an opportunity for someone else to join their labour with my capital in order to build something that someone wishes to pay for, thus enriching all three of us... well…

I agree with you totally. The focus should be on increasing wealth through more production of everything. Somehow we've ended up in a situation where everyone focuses on job creation at the expense of everything else. Right now most families need two parents working in order to provide. I think many would be happier with one less parent working if they could maintain the same standard of living. That would be possibl…

That wouldn't help. People's expectations for standard of living would rise, and both parents would continue working just to keep up with the Joneses.

Furthermore, in most families the main reason for needing dual incomes is to pay for housing. Increasing productivity does nothing for affordable housing. Real estate prices tend to rise right along with average incomes.

Re: We Can All Become Job Creators

#86

Post by kennyma »

Skillset wrote: post #69
tomjen3 wrote: post #46

Earlier quoted context omitted.

His plan is good but it only creates a limited amount of jobs and it is not especially environmentally friendly. My plan will create at least an order of magnitude more jobs, jobs for those with no education, jobs for the illiterate, the literate etc. It is simple to. Nothing needs to be broken. All you have to do is to outlaw electricity, gasoline and diesel as well as any other method of generating power except by…

It would also solve obesity, because they'd all be human-powered. I actually imagine a future where we could basically have gigantic power generation stations stocked with complex exercise machines.

The more I think about it, the more I like it :) genius!

Re: We Can All Become Job Creators

#87

Post by 6ren »

hugh3 wrote: post #3

We need to stop talking about "job creation" and start talking about "wealth creation". It's easy to create jobs -- e.g. I can go round breaking windows with rocks and create jobs for glaziers. But creating jobs that create wealth -- that is, to create an opportunity for someone else to join their labour with my capital in order to build something that someone wishes to pay for, thus enriching all three of us... well…

Define "wealth".

Re: We Can All Become Job Creators

#88

Post by rooshdi »

anon808 wrote: post #79
lupatus wrote: post #67

Earlier quoted context omitted.

I'll bite. Drug dealers/producers produce products that provide the user with exotic and novel experiences and which may increase the user's sociability. Similar to the travel industry and a personal life coach in a small form factor, drugs are good/service that many people seem to want.

If you believe that drugs add value to people's life, then you've chosen the world you want to live in. I chose to believe that (addictive) drugs are really a tax levied on people with weaknesses to be exploited (we all have weaknesses that can be exploited). The purchase of addictive drugs doesn't create value but redistributes wealth from the folks that are weak to the exploiters of that weakness. I don't value dru…

Values vary; the world you live in is only one planet.

Re: We Can All Become Job Creators

#89

Post by Tsagadai »

OstiaAntica wrote: post #19
redwood wrote: post #2

Interesting, glad to see, at the very least, a bit of patriotism returning to the idea of jobs. In big companies the push to outsource is strong and political correctness prevents much dissent. Would still like to see a government regulation help as well: e.g. perhaps companies with more employees per profit would have a tax incentive and companies with fewer employees per profit would have a penalty. This way you es…

Well, currently the government punishes companies that hire employees-- all sorts of payroll, worker's comp, and unemployment taxes, and also workplace legal liability that is extreme in the U.S. To the degree there is already a lot of central planning in U.S. labor markets, the government actively works against employment.

The US is an incredibly easy country to start a company in. Low tax (yes, even if the media doesn't believe it), easy bankruptcy laws (you don't go to jail for defaulting on debts and you can start again), low corruption, low barriers to entry, government support in many industries, very weak labour laws in most states, plenty of capital floating about, etc. If you think the US is a difficult country to start a business in, you need some perspective. Relatively, it is one of the easiest countries in the world and the easiest large country (over 50 million people) for investment.

Re: We Can All Become Job Creators

#90

Post by buff-a »

pitdesi wrote: post #28
hugh3 wrote: post #3

We need to stop talking about "job creation" and start talking about "wealth creation". It's easy to create jobs -- e.g. I can go round breaking windows with rocks and create jobs for glaziers. But creating jobs that create wealth -- that is, to create an opportunity for someone else to join their labour with my capital in order to build something that someone wishes to pay for, thus enriching all three of us... well…

Easier access to credit is a huge detriment to small businesses, in ways that we (startup-folks) don't think about... One example - the typical small business restaurant. It is a VERY different businesses than the startups that we create. You can't create a restaurant without any money, for example... You can bootstrap an online business by not paying yourself, but when you have to pay for a building and kitchen etc,…

You can't create a restaurant without any money, for example..

Or customers.

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