Understanding why Democrat policies don’t create jobs

Before we take a look at why Democrat policies don’t crate jobs, let’s first make sure that Democrat policies don’t create jobs. As it stands, Obama policies have lost 3 million jobs and driven the unemployment rate to 9.7%. But let’s take a look at an example to show that his socialist policies failed to do what he promised (and I think he sincerely believed) they would do.

New Hampshire gets $413 million, creates 34 jobs

Now! Hampshire reports:(H/T ECM)

The stimulus package is working and has already “improve[d] the number of jobs” in New Hampshire, according to Rep. Carol Shea-Porter (NH-01) in a recent radio interview with WGIR radio personality Charlie Sherman.

“New Hampshire certainly has seen some jobs come and, actually, we grew jobs. We’ve actually had improvement in the number of jobs,” said Shea-Porter.

Shea-Porter’s comments notwithstanding, New Hampshire has lost roughly 16,000 since the beginning of the year and the New Hampshire Union Leader reported recently that the stimulus plan has thus far created only thirty-four fulltime jobs despite the $400 million plus dollars that have come into the Granite State from the federal government.

Obama is very surprised by this unintended consequence of his anti-growth, anti-business policies. He meant well. Aren’t good intentions enough to create jobs?

Democrats in Michigan

The American Thinker writes about how Democrats plan to create jobs to alleviate Michigan’s over 15% unemployment rate.

  1. “Hiking the minimum wage to $10 an hour for all workers.
  2. Imposing a blanket moratorium on home foreclosures for 12 months.
  3. Cutting utility rates 20% across the board.
  4. Requiring all employers to provide health care to their employees.
  5. Hiking, by $100 a week, and extending, for six months, unemployment benefits.”

Let’s take a look at these one at a time.

  1. If you force employers to pay more for each employee, and employers are still getting the same amount of production from each employee, then the employer will lay off the least productive employees and fewer employees who can offer better productivity for the higher salaries they are required to pay. Raising the minimum wage RAISES unemployment.
  2. If you force banks to not foreclose on homes, then banks will take huge losses and have less money to lend anyone else. Small businesses, new home buyers and existing homeowners will suffer, as well as bank shareholders.
  3. Cutting utility rates by 20% across the board will make consumption increase while supply decreases, causing a shortage. This would lead to blackouts, which is exactly what happened in California when the Democrats tried to do the same thing.
  4. If employers are forced to provide health care for all employees, they must pay more for each employee for the same amount of productivity. This will result in increased unemployment and reduced hiring as employers reduce their number of employees. The least productive employees are the first to go.
  5. Raising unemployment benefits will create a budget deficit that has to be filled by spending cuts or, more likely, tax increases. Tax increases cause the most productive people like investors and business owners to dial back their productivity. That raises unemployment.

Michigan is probably one of the worst states in the Union in terms of being run by Democrats who have no idea how jobs are created. You might as well give the job of running the state to a four-year old. Democrats just don’t understand anything about economics. Democrats are trying to fix problems on the basis of what makes them feel good about themselves and what makes people like them.

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