Thursday, June 3, 2010

David Rosenberg: economic trends and how to create more jobs

I received an email the other day from someone whose brother-in-law is a nominee for a congressional seat in a Midwestern state. The question was “Have you seen any good analysis regarding specific proposals you believe could be implemented to stimulate sustainable job creation? Alternatively, have you ever given thought to “If David Rosenberg were in Congress......” not that I would wish that on you. I don’t expect easy answers.”
To which I answered:
Large tax cuts for small businesses. Payroll taxes are a disincentive to hire.
A coherent energy policy that weans us off imported oil — nuclear, wind, and especially natural gas. We need a permanent reduction in energy costs.
We need retraining and skill retooling for long-run unemployed.
Cuts to jobless benefits — these create disincentives to work. At least FDR, unlike Obama, did not pay people to be out of work.
Finally, eliminate the minimum wage. We are not in the dark ages any more in terms of labour protection. Let the market work — it’s amazing how demand for labour would respond to the end of minimum wages (my advice: don’t run a campaign on this message).
Reductions in marginal personal tax rates — find other ways to raise revenues (sales taxes? user fees?) than taxing income, which in the final analysis, is taxing the work ethic. Believe it or not, but there was no federal income tax until 1913 (1917 in Canada).

Breakfast With Dave 060310

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