On Tuesday, September 20, 2011, The Early Show had a segment on Dave Ramsey in which he stated that the tax cut of $1500 was only for the short term and if he was going to hire someone it would be for 5 – 10 – 15 years or more; and, that what the Government really needed to do was take away all the regulations which caused financial burdens on the small businessman - that was the real culprit in preventing jobs growth in this country. Dave Ramsey is credible both as a successful businessman and speaker/lecturer and would be correct if the marketplace was self-regulating as Adam Smith envisioned it, in his Wealth of Nations book; unfortunately, it is not.
Invisible Hand is a term used by Adam Smith to describe the natural force that guides free market capitalism through competition for scarce resources. According to Adam Smith, in a free market each participant will try to maximize self-interest, and the interaction of market participants, leading to exchange of goods and services, enables each participant to be better off than when simply producing for himself/herself. He further said that in a free market, no regulation of any type would be needed to ensure that the mutually beneficial exchange of goods and services took place, since this "invisible hand" would guide market participants to trade in the most mutually beneficial manner.
Every time the Government has backed-off on its regulations, the marketplace has responded in a greedy manner; for example, remember the Wall Street and Real Estate recent debacles and how many corporations have reported record high profits? Unless, I am mistaken, recent events do not demonstrate a mutually beneficial manner, as described above.
I applaud what Dave Ramsey is saying but there are too many businessmen out there who are “greedy apples,” and have spoiled it for the rest of us.
5 comments:
I agree although I know some of the regulations on the smallest businesses make it difficult for them to operate in a cost effective manner. And I'm sick of the repukes saying regulations are what keep small businesses from hiring. Excuse me, small businesses might hire like 5 people, whereas huge corporations might hire thousands. Small businesses are not what drive the employment in this country. I'm for more regulations, because without, we are at the mercy of the greedy!
The government "regulations" that are making it difficult for businesses to operate were put there for a reason. The main reasons are for product safety (of food and drugs for example), worker safety, enviornmental protection (against polution and contamination), and then those to prevent "greed". The greed one we know all too well, esp. us here in So. Cal when they deregulated the power companies starting with SD. We got ripped off immediately with rates going up 1000 percent!! Of course bush's buddy ENRON was in on that big time. We need those government regulations. Sorry. As much as I love and respect Mr. Smith.
Terry: Small businesses ARE the core of our economy as far as jobs are concerned. So lets split the discussion between small jobs and corporate jobs. As far as corporations are concerned there is not much government can do to help them create jobs. Lowering the corporate tax rate "might" work, but I doubt it. Most corporations would keep that money for increasing profits, not hiring, but a lower rate does attract more companies to set up and do business in the U.S. Now as far as the small companies, they DO need help and the government(s) DO get in the way. All of the regulations for just setting up a business are a job killer right off. Something has to be done about this on all government levels (not just the feds). Most small businesses are going to lose money for the first few years of getting started. Government tax breaks/incentives, whatever it takes needs to be in place to help small "start up businesses". As for ongoing small business they could use a break somehow on their taxes (that would not apply to corporations or individuals). One of the tangled areas is that many small businesses end up on a personal return and subject to personal tax rates; and for many that is a higher rate than what corporations are paying. This is where the tax code needs to be adjusted "long term" giving those people a break on their business earnings (and not dividends or capital gains; I am talking business profits). The tax break on SS Taxes is good but needs to be long term as well. I think Social Security is healthy for now and easily adjusted down the road when it isn't. A good place to give small business a break. And ONLY small business start ups (first 5 years). Amen.
Businesses use weighted capital costs when figuring investments or expansion or hiring new employees. So, regardless of the economics, they have a strategic plan that they are going to execute. Using the economic climate as a way of getting the Feds to back off is another way of having businesses force us all into the Indian tribe: BOHICA
BOHICA? I've heard of Figouwe tribe.
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