With elections coming this fall, candidates will all be handing out pamphlets citing their commitment to jobs and the economy. The problem is that candidates and government do not create jobs. They never have. They never will.
The jobs that government “creates” all have to be paid for with private sector tax dollars. That means by a private sector job. The only available option that politicians have to positively affect the economy is to remove the undue burden that government has placed upon the economy. Regulations, workman’s comp cost and unemployment insurance here in Maine are far above the national averages. Our state and federal government are choking the entrepreneurial spirit of the people. The growth of government is killing private sector employment. The result is high unemployment and a contracting economy.
At the heart of this problem in Augusta is the failed understanding of the effects of private sector spending versus government spending. When the government grows it has to come at the expense of the private sector; it cannot be otherwise. We know that over the last decade government growth in Augusta has outstripped private employment. This unsustainable trend found its logical conclusion when the recent economic downturn happened – but Maine was already declining BEFORE the Recession. At the heart of all the current budget gaps is the reality that government spending can never create economic growth – only the private sector can.
When politicians tell you of their commitment to the economy, I have no doubt they are sincere. The real question is, do they favor the failed approach of higher taxes and more government spending that got us in the mess we are in, or do they favor the time-proven approach of reducing government spending and freeing the ideas and energies of our greatest asset, the people of Maine?
The same spirit that built our state and country is alive today. It is just reeling under the burden of an over-regulated, over-taxed State. Remove this weight and jobs will begin to appear. Not because the government spoke them into existence out of thin air but because the people put ideas into action without the weight of a bloated bureaucracy to stifle them.
When the private sector begins to grow faster than the government, we will all be better off. This time-proven sustainable approach is what will allow us to help and serve all people. And the employment opportunities that private sector growth creates will mean that our ability to help the neediest within our society will be better served. As John Kennedy once said, “A rising tide lifts all ships” and as Ronald Reagan said so well the “best social program is a job.”
So when you see a politician who tells you how much he or she wants growth and jobs, take the time to ask them how they intend to achieve this result. The answer might tell you if they are serious or not.
Nice words Lance. I applaud your bringing this topic to light in your article, but I’m sure everyone reading this would like to know more about your plan to get our economy moving again. Entrenching oneself and just saying no is a passive approach to economic development that simply does not work. There’s a reason the phrase “it takes money to make money” exists. Mostly, that’s because it’s true.
I have to be candid and your article just seems to illustrate the fact that, even after a year in office, you still have no plan whatsoever. Picking on the big, bad government makes for nice sound bites, but doesn’t offer anything constructive. I know we would all greatly enjoy hearing what you have in mind other than cutting DHHS and providing one-way bus tickets out of town to our children. Seriously Lance, other than slashing programs that hurt the elderly and our children and saying no to just about everything else, what is your plan to help craft a solution to our economic doldrums?
Yes, government should be efficient, but it exists to provide a structure within which an economy can exist. In fact, the “Celtic Tiger” (i.e., Ireland’s economy) you so often talk about as a model for success would never have roared without government intervention.
I look forward to hearing more ideas from both sides of the aisle in the coming months!
numbers to think about.
In August of 2009, Cato published an analysis of wage statistics from the Bureau of Economic Analysis, a branch of the U.S. Commerce Department. According to those numbers, the average wage for 1.9 million federal civilian workers was $79,197, compared to $50,028 for the nation’s 108 million private-sector workers. (The analysis leaves out combat military personnel on the theory that there aren’t equivalent jobs in the private sector.)
Individual jobs using the most recent Bureau of Labor Statistics employment data (from 2008), found many federal salaries were indeed higher. It’s worth noting that the BLS’s overall average for federal jobs is $68,740 compared to the private sector average of $42,270, so it reflects the Cato Institute findings.
examples:
A government-employed nurse makes about $74,460 on average, while someone in the same position working for the private sector makes about $65,130. A cashier working for the government makes on average $34,470 while a cashier working in a store only makes a mean of $18,880 annually. And a public-relations manager working for the government makes about $132,410 a year compared to $101,220 in the private sector.
i am certain this applies to the state level in hundreds of jobs.
http://www.maineopengov.org/
LANCE,
You are an elected official so I am asking you: How will you create jobs? Which regulations are you referring to? Seriously, tell us specifically which regulations are restricting job growth, why they were put there in the first place and why we should support you in deregulation. We’re listening now.
(We can save the Von Hayek vs. John Maynard Keynes debate for some time when we have time to waste.)
Last year USnews ranked Maine as the 4th worst state to start a business!!!!!!
here is what they said:
Maine is by no means a poor state. Its per capita income is moderate compared to other states. Relative economic prosperity, however, does not necessarily mean a state is a good one in which to start a business. That’s because, while not poor, Maine’s economy is not dynamic either. It ranks 42nd in terms of fastest-growing firms. Maine ranks even lower for “gazelle jobs” as a share of total employment–these are jobs at firms with annual sales revenues that have grown 20 percent or more for four straight years. So a new business in Maine isn’t likely to be a national success story. It will also have to deal with high taxes. Maine has the second-highest property taxes in the country, and its personal income and individual capital gains taxes are almost as high.
in order to fix this we need to get democrats out of office in Maine! they gut us to this point and they can not fix it.
CNN Money’s rank for starting a business
47. Maine
“Maine has so much scenic beauty,” says Kerrigan, “but scenic beauty can’t compensate for high taxes.” Starting a business in the state could be as rocky as its coastline: Property taxes are the second worst in the nation, and personal income and capital gains taxes are also amongst the highest. On the plus side, Maine boasts a highly skilled population.
have i gotten the point across yet?
Forbes.com worst states to start a business
No. 46: Maine
2007 Rank
48
Business Costs Rank
44
Labor Rank
26
Regulatory Environment
32
Economic Climate
39
Growth Prospects
43
Quality Of Life
19
Sources: Moody’s Economy.com; Pollina Corporate Real Estate; Pacific Research Institute; Tax Foundation; Sperling’s Best Places; Census Bureau; SBA; FBI; Dept. of Education.
From fastupfront.com small business blog rankings
Workforce
The CNBC study also conducted a survey of workforce quality among the different states.
The bottom ten include:
41) Illinois, 42) Connecticut, 43) Pennsylvania, 44) Wisconsin, 45) Maine, 46) Ohio, 47) Hawaii, 48) West Virginia, 49) Alaska, and 50) New York.
Tax Environment
According to the Small Business & Entrepreneurship Council’s 2009 Business Tax Index
While the worst state tax systems are:
40) Nebraska, 41) Idaho, 42) Massachusetts, 43) Vermont, 44) Rhode Island, 45) Iowa, 46) New York, 47) California, 48) Maine, 49) Minnesota, 50) New Jersey, and 51) District of Columbia.
According to the Small Business Survival Index 2008, conducted by the Small Business Entrepreneurship Council, several states are more lenient in terms of mandated benefits on employer-sponsored health plans, while other states are known for their heavier regulation.
Those with the most healthcare mandates are:
41) Connecticut, 42) New Mexico, 43) Nevada, 44) Maine, 46) Washington, 47) Texas, 48) New York, 49) Virginia, 50) Maryland, and 51) Minnesota.
A rising tide is great if you have a ship.
Rep. Harvell is correct in the limited hypothetical he put forth. One full time government job has to be paid for with money that could provide one full time private sector job. The public job may even compete with a private sector job. However, this can’t be the only way government can help create jobs. Aren’t there small business loans that can be underwritten during hard times when private sector credit is tight? How about public works projects like roads and bridges that benefit the workers, contractors, and infrastructure? While I do not question that fat can and must be trimmed from the Maine budget, Rep. Harvell’s focus on deregulation, lowering workman’s comp costs and excessive unemployment insurance premiums as solutions to what ails Maine job climate fails on two levels. First, he fails to mention the export of jobs overseas to exploit cheap labor. This has been occuring for decades. It’s systemic and independant of whatever the Maine legislature has done. If you want to compete with Chinese regulation, workman’s comp costs, and unemployment insurance, you are engaged in a race to the bottom. The fact that there is no national regulation, workman’s comp, and unemployment insurance allows corporatists to pit states and municipalities against each other in cutting holes in the social safety net, or their own tax base in the case of TIF’s, for the good of the bottom line. To focus on theses programs seems misdirected if one goal is sustaining a healthy workforce. Second, it uses the recession as cover to gut social programs that are designed to protect laid-off and injured workers. There may be a limit on the help that government can provide with job creation in times of great unemployment, but Rep. Harvell’s ideas are no solution. This sounds like class warfare; which is fine. Just get your guns pointed in the right direction.
Why does everyone expect the government to do something? People act like government can solve problems in the market. All it seems do to is create problems. THE MARKET WILL CORRECT ITSELF.
Cut taxes, stay out of the market, and call it good. Tis what our founders would have wanted.
Thankyou Lance for reaching out and communicating with Maine citizens, it is of great importance. You tell it like it is. People have little faith in government and quite frankly have nothing good to say about government period. Job growth no longer exists and there are not many incentives left to motivate entrepreneurs to borrow or invest capital for starting a new business. Government is directly responsible for the societal collapse that we are in the midst of . We are all overburdened with taxes, regulations, rising prices for everything, loss of employment, denial of constitutional rights and bills are piling up. The revolution at the Whitehouse is laced with broken promises, misrepresentation, perjurious ramblings, propeganda, greed, self interest and squabbling to name a few. Our fearless public officials haven’t the time to work for the taxpayers, as they are largely incompetent. Lance, what is your plan to remove the weight while it is getting heavier?
I believe ranchers and farmers and family business owners can make better decisions about the future than the government can.
I’ll wait to let Lance reply with the specific cuts he would make.
But in the meantime, to respond to Hutch’s well-cited response: What do Mainers have here? Natural resources. What would Forbes readers like to see? Those resources exploited to the maximum by the companies they hold stock in. I say this not to say that we don’t need jobs, we do. But not at a long-term cost to everyone. And the fact that companies pay their fair share here is not necessarily a bad thing. Seamus’s response needs to be read and considered — he has great points there.
A vote for a democrat is a vote to kill Maine’s prosperity, kill Maine’s future, and kill Maine’s hope.
Here is an example how the state is standing in the way of jobs and a possible solution. (all of this from a farmer)
We need the state to think holistically not departmentally. The DEP will not allow landowners on the banks of the Sandy River harvest the gravel build up on the river which is causing erosion of good farm land because it harms the ecosystem BUT does not consider the DOT dumping tons and tons of chemical ice melter on the roads which drain into the Sandy River. Which is worse? Farmers trying to protect their farm land? Or DOT dumping tons and tons of chemicals onto the roads that drain into the river. Out west certain states have stopped the use of de icers because its so harmful to the fish. The DFI and W dumps thousands of dollars in stocking the Sandy River river with fish. Its not sustainable. Let the farmers protect their land with LOCAL oversight, not from some at a desk in Augusta. This would put money in peoples pockets AND allow construction companies hire people to work removing the gravel bars plus the construction companies wont have to look for new pits to excavate. Win win for everybody, even the fish
I’m familiar with this issue, Darren. And I agree with you 100% on making that change — could we get DEP to make the change or would we need to cut the entire program to do this? Would all local areas be able to make good environmental decisions or would some be courting companies for nuclear waste storage, for example?
But anyway, Lance, we’re waiting for your cuts still. We have one change specifically stated in this discussion so far.
I believe the local NRCS and USDA offices can make these decisions and have elected officers that could make sound environmental decision. And yes, cut the DEP. Let people govern locally.
Lance nice letter. Its impossible to outline a huge plan of action in the small space here, but its good to see
how you are thinking. It’s not up to the government to create jobs. Anyone who thinks this either doesnt know what they are talking about or, they work for or have other financial interest in big government. I had to laugh the other day when I read a letter to the editor of the kennebec journal.It was written by a state employee. He wrote that he was willing to go along with a rise in the state sales tax in order to keep from laying off any state workers.
Gee, how big of him to sacrifice very little of his money and alot of other peoples money that dont work for the state for his behalf. Great idea in a recession . Libs love to wail about the children, the elderly, and the poor whenever anyone talks about cutting the size of our state government. Who would want to hurt these people? Nobody. I have family members that fit in all three catagories, but the trouble is, the state does’nt HAVE THE MONEY to run some of these programs. Millions of welfare dollars are being wasted on people who dont need the help, thereby taking benifits away from the truly needy.Anyone who says they dont know of ,or ever heard of a person or a family milking our generous welfare system is either out to lunch of simply lying.Cuts will have to be made, and made SOON. The state is broke. I read in the paper the other day some legislator wanted to set up a fund for people to voluntarily donate extra money, a “sales tax” directly to the state coffers. Are you kidding me? Does this sound like a real plan? Just how many millions of dollars will people voluntarily donate to the state over what they already pay? Talk about being out of touch.This state has a tax or a fee on EVERYTHING!!!!! Where do our political leaders pull ideas like this from? We need common sense solutions that are right in front of us, not foolish gimmicks. Haszco says we have financial “doldrums? Doldrums huh? Thats like saying I got run over by a train and suffered a bit of physical discomfort. Come on! And talk about “sound bites” ,hey Lance, I didnt know you were giving out “one way bus tickets out of town to our kids. Gee, and I have known you for so long, how could you! I know one thing,if anyone would be giving away free bus tickets, it would be the DHHS……they give everything else away for free …….Keep up the good work Lance, the people in your district who agree with your principles far, far outweigh the few that snipe at you every chance they get.
Haszko is suffering from sour grapes syndrome, still a year later. Like Steve said, the state doesn’t have the money. Period. It can’t exist outside of the real world, no matter how badly people want it to. It has created a state of depency among the aforementioned classes, so no one is prepared for times like these and they have nothing. Quite criminal if you ask me.
Robbing Peter to pay Paul will only work until A. Paul gets sick of being robbed, packs his bags, and leaves or B. Paul runs out of money. Both outcomes are applicable to Maine’s situation.
Sorry, should be until Peter leaves or runs out of money.
We need social services, sorry guys. It is human to help those around us who are in need. How many of you tough guys here would cut unemployment? Say it nice and loud and clear: I want Maine to cut unemployment services. Would you be that stupid?
Read The End of Work by Jeremy Rifkin, in fact, just read his 2004 Preface to the newest edition as it boils it all down in 30 pages. We are losing our jobs to technology mostly. Did you know that China lost jobs over the last thirty years — they did not gain any jobs. Their production is sky high but those spoils are for the machines and the executives.
Specifics? Read “A Citizen’s Guide to the 124th Maine Legislature.” The members are profiled and given space to declare their goals. Here’s a sample: “On environmental issues X plans to pursue green renewable energy technology to rebuild Maine’s economy and fight climate change, continue to examine toxic chemical politicies and push solid waste management reform.” This is as specific as it gets. There is no reason to believe that this wonder-worker has the slightest economic, engineering and technical knowledge on any of these subjects. He’s a “radio personality and manager.”
A legislator is called ujpon to vote for or against hundreds of bills concerning dozens of subjects and policies about which he knows little or nothing., All that can reasonably be expected is a statement of general principles.
Read Thomas Sowell’s “Knowledge and Decision” for a theoretical explanation of the problems of centralized decision-making and regulation. Read Hernando de Soto’s “The Other Path” for the insane proliferation of regulations in Peru—making legal compliance an impossibility. Read James Q. Wilson’s “Regulation” for an empirical study. There’s the story in the PBS “Commanding Heights’ series about the Indian entrepreneur who had to process hundreds of pages of documents and visit the national capital 50 times to process the application to purchase a $1500 computer. Somewhere in my library I have a volume by an Italian economist named Marinelli which explains the bizarre formula for computing academic salaries, among many other bizarre procedures, e.g., over 3,000 separate bureaucratic permissions, decisions and rubber-stampings to authorize a new post office.
Very different countries with identical bureaucratic mentalities. No reason to believe American bureaucracies are fundamentally different or not subject to the same rules of behavior. Keynes and Hayek agreed on one thing, that the government, in itself, constitutes a constellation of bureaucratic and political interest groups. This idea has been theoretically elaborated by James Buchanan’s ‘public choice’ economic school.
Talk of “gutting” social programs or reducing the American work force to the standards of poor countries is infantile prattle. Every year the Federal Register contains thousands of pages of new rules, regulations and interpretations. Reagan could only reduce the number of pages.
And, by the way, “corporatism” and “coporatist” has a specific historical meaning. It refers to the theory of the corporate state developed under Italian fascism—the organization of the economic system into ‘corporations’ subordinate to the state.
Will,
that reminded me of this person A and person B argument
If person A asserts they have the right to something and they demand that person B is responsible to provide said item, then person A has infringed on the rights of person B and they are therefore not equal. There simply is no quid pro quo. Person A gets the rights on the back of person B. Person B is in debt to person A and person A is in debt to nobody.
JMS,
I will say it.
I want Maine to cut unemployment services!
I want Maine to cut workman’s comp cost and unemployment insurance!
I want Maine to cut social services by 20%!
I want Maine to cut the legislature in half!
I want Maine to cut the number of superintendents in half and their personnel and school district’s as well!
I want Maine to Freeze State Employees salaries for three years!
i want towns in Maine to cut the property tax by 20%!
i want Maine to phase out income taxes!
I want Maine to stop picking and choosing who they will give property rights too!
I want Maine to cut the department of transportation by 20%!
i want Maine to stop recognizing Unions representing State employees!
More numbers to consider how bad we need to reform the state and federal government.
– The cost of our federal government is 25% of our total economy (GDP). This is compared with the average of 20.7% of the GDP during 1970-2009
– If you include the cost of state and local government, the total cost of government is almost 40% of our GDP
– Since 2008, the cost of our federal government has increased by one-fourth
– By 2020, Obama will have increased the federal government by one-half on a per family basis
– Before the recession, federal spending totaled $24,000 per household
– By 2020, Obama would raise that to $36,000 per household
Hutch
You are forgetting something: the wars. Do you want to cut the cost of bombing other nations completely or by 20%? Just curious.
And economist Joseph Stiglitz’s 3 trillion dollar war theory involved the future effects of all that spending which should be hitting us about now. Giving away the money to the banks with no strings attached was Bush and Pelosi and her majority in Congress (with Obama’s support and additional contributions once he took office).
JMS,
So you hate the war monger policy of the Obama Administration, right? Escalating the war in Afghanistan, bombing Pakistan without their permission, air raiding villages, killing women and children. anybody seen code pink lately?
Yes, yes, yes, I hate the fact that pretty much point for point Obama is continuing what I hated about Bush/Cheney. There is no difference. I usually vote democrat (except for a couple reps, Snowe and Cohen) but that is going to change. I am going to support a third party candidate because the rep-dem fight is just the rich giving it to us, left and right!!
Professor Frary,
You need to watch the entire Commanding Heights series again. There are three parts and you obviously are taking one or two snippets from there that fit your set ideas. Watch it again and see the effects of Thatcher and Reagan and also see the effects of the Von Hayek, Jeffrey Sachs ideologies. I’m not saying they were completely wrong, but watch it again and see how that played out with the PEOPLE.