Jobs Bills are Legislative Wishful Thinking

(David Mansdoerfer) – In the recent debate between Mark Amodei and Kate Marshall, Ms. Marshall accused Mr. Amodei of failing to pass a jobs bill during his time with the Nevada legislature. What I find most distressing about this statement is that Ms. Marshall, and most of her liberal counterparts, believe that government is responsible for job creation.

Ideally, government, on all levels, should play little or no part in the private sector. However, due to ever increasing federal regulations, reactionary legislative overreach by both federal and state legislative bodies, and loopholes in the tax system, the U.S. free market system is looking more like the good old boy market. Instead of letting producers and consumers dictate how market resources are allocated, the system has switched to who has the best relationship with their local congressman, senator, or state representative.

This, my friends, should be distressing to all of us. The market, as we all know, is driven by profit and loss. If a company is profitable, they will succeed and look to grow their profit margins. If a company is losing money, they will have to adapt or fail. Yet, when poorly performing companies get bailed out, inefficiency is allowed to continue and the inevitable failure of these companies is only prolonged. Due to this, a precedent is set that dictates that companies can take risks and make poor decisions without the punishment of failure.

What happens, then, when government takes it upon itself to craft job creation legislation (AKA Jobs Bills)? These bills, which take the form of either government spending or tax cuts, tend to be reactionary to the current economic climate. Yet, much in the same way bailouts create an inefficient marketplace, these jobs bills are nothing but legislative wishful thinking.

Wishful thinking almost always leads to bad public policy. Remember the Community Reinvestment Act which legislated homeownership? Look where that has ended up. But, more importantly, these bills usually complicate the already complicated tax system, which leads to more money wasted on compliance, and spend money on short-term projects.

Instead of reacting to economic conditions, which usually leads to more tax loopholes and spending, the government should work on reforming the tax system to decrease compliance costs and even the playing ground between all businesses. Job bills constitute legislative wishful thinking that further muddies a free market society.

(Mr. Mansdoerfer is the Director of Federal Affairs for Citizen Outreach)