Prof. Friedman visited China in the early 1960s and was taken by a government official to see a public works project. Chinese workers were building a canal. Friedman was struck by seeing everyone digging the canal with shovels. Friedman asked the official, "why no heavy earth-moving equipment?" The official said, "oh, this is a jobs program." So Friedman then says to the official, "then why don't you just give them spoons instead of shovels to create even more jobs?"
- Obama's "fake" job strategy: His veiled attempt at jobs creation through his $787 billion stimulus package was actually an orchestrated strategy of disguised income transfer, i.e, "share the wealth" vs. "create wealth". It has and will fail to create jobs simply because it has mostly only redistributed wealth to Obama's trade union supporters through federal and state construction jobs. To Prof. Friedman's point, employment does not in and of itself create wealth, production does.
- Obama's governmental intervention: His stimulus package does nothing to encourage private sector expansion, production and long-term sustainable economic growth and jobs. His stimulus plan has essentially crowded out private sector expansion and job opportunities for the unemployed. The Obama stimulus plan is not encouraging the private sector to expand and create productive new jobs, re-train the work force and foster wealth and expansion.
- Obama's hostile business environment: the Obama administration has created a hostile business environment causing business uncertainty as to new and higher taxes, health care costs and "cap and tax" regulations. As long as this uncertainly persists there will not be long-term sustainable economic growth.
- Obama placating interest groups: Mr. Calabria notes that shortly after Obama convened his "jobs summit" his Labor Secretary, Hilda Solis, said her agency will seek to enact an array of 90 rules and regulations next year aimed at giving more power to workers and unions. Several business executives said they opposed expanding disclosure requirements. The president of a small trucking company in PA responded to this onslaught of new regulations by saying, "If I have to consult a lawyer on how to handle unionization so I'm not making any missteps, I don't see why I have to disclose that". This recent development is indicative of the hostility the Obama administration has toward business owners, i.e., placating his union supporters at the expense of business owners and economic growth and expansion. He speaks to attempting to create jobs in the private sector, but imposes additional punitive hardships on the business environment.
- Obama's disconnect with private sector: the Obama administration has a fundamental disconnect between his advisers and the private business sector. Mr. Calabria highlights that the Obama administration has the lowest % of senior staff advisers who have actually worked in private industry. His jobs summit adviser make-up was composed of academia, non-profits and trade unions (who have no incentive to create new jobs). Mr. Calabria notes that the extent of academia's experience with creating jobs is that "the government gives them a check and they hire someone". Are we not surprised then by the lack of understanding by the Obama administration as to how to create new jobs?