for Peeps of all Persuasions

Real Estate, Boatbuilding, Business, and Politics ....
Interspersed with Truth, Justice, and Insight into the Meaning of Life .....
for Nanepashemet Peeps of all Persuasions.



Saturday, September 10, 2011

Creating Jobs

Sorry for the gap in posts.  The short Labor Day week got wicked busy and my routine was thrown off.  Not that I owe you an apology or anything.  I have no official obligation to ever post anything in this pathetic Blog.  But morally, I tend to feel bad because of the intense suffering that you Peeps endure when you don't get your addictive Nanepashemet fix.
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But that's your Monkey... not mine.
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Anyway...
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Lots of people asked me what I thought of the Obama American Jobs Bill Speech.
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I think the program is brilliant, expertly thought out, devoid of political intent, and just what the country needs to get back on its feet.......    er... Not really.
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Let me say at the outset that I wish that Obama would succeed, but it seems that he is hopelessly adrift... more than even Jimmy Carter.    This sophmoric, lightweight approach to creating jobs... simply throwing money at government road projects and teachers.... misses the whole point of how real jobs and economic development occurs in America.
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It happens from the efforts of creative entrepreneurs and small business people.  People who create opportunities for business through initiative and their own creative thought processes.   That's right... people like me.... if I do say so myself.   If Obama could tap resources into that process, the result would be exponential.
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I'll give you a specific example.
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If Nanepashemet Project Management was given a government grant of $600k to hire three top rate business developement sales professionals, we would undoubtably win a half dozen major projects in the next year.   In order to properly manage these we would need to hire 12 to 18 employees.  And this is direct hires.... it doesn't take into account all of the subcontractors and 1099 consultants that the projects would require.
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And the higher volume of our business would allow us to maintain the three business development staffers.  So the $600K federal jobs investment would yield a minimum of 15 jobs for a cost of $40K per job.
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Each of these jobs would pay federal taxes and would stimlate local economy purchases for the forseeable future... say six years or so.
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Obama wants to hire teachers... an honorable objective.... but is it an economic stimulant that will create jobs?   $600K would buy ten teaching jobs... for one year... and that's the end of it.  That's 10 units of production for the investment.
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$600k granted to my entrepreneurial company would yield 15 jobs.... for at least six years.  That's 90 units of production.  And we would undoubtably grow larger with this base on our own efforts and investment.
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This is not to downgrade teachers... or construction road workers.   We desperately need them.   But funding them as an economic stimulis will only get Obama to the next election, and keep the country in a downward spiral.   Fund these jobs in an Education bill, or a Highway Infrastructure bill.   But don't characterize these as an economic stimulis, because they just don't carry out that purpose in a way that changes our economic outlook.
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Economic stimulis should be directed at the true job creation source of this country.... small business.
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The POTUS had a lot of time to think of this approach during his vacation... and he came up decidedly short.
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And by the way.... those 15 jobs, averaging $12k per year in federal income taxes for each job, would yield over a million bucks in tax revenue over the six year period.  For every $40k invested, $80K would be returned.   That's a 33% annual return on investment to the Federal Government for the $600K "grant".
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Big Daddy said...

So what you are looking for is a government handout?



1 comment:

  1. Big Daddy8:02 PM

    So what you are looking for is a government handout?

    ReplyDelete

Appreciate if you leave comments under your real name. Except for TL.

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