"The efficient allocation of scarce resources which have alternative uses is not just an abstract notion of economics. It determines how well or how badly millions of people live." Thomas Sowell, Basic Economics
A $30 billion small business bill will soon be law. President Obama claims that for new federal loans will help businesses "To grow and to hire..."
The premise here is that businesses need to hire additional personnel but cannot due to a lack of available lending in the private market. This premise is seriously flawed.
Businesses do not hire people because of tax cuts and lending intitiatives doled out by the federal government. Businesses hire in order to meet current or expected demand for their goods and services; they hire when the market (us consumers) tells them more of what they make or provide (supply) is wanted for purchase (demand).
And there is no increased demand so long as there is uncertainty among both consumers and producers. Coming clean on what will happen with taxes soon would go a long way to create more certainty in the market.
The president goes on to state there are "Many steps we have to take..." to continue an economic recovery. If by "we" he means consumers and producers, and all the untold millions of people who, uncoordinated by government planners, spontaneously interact countless times a day to efficiently allocate resources to provide for a consumer economy of 300+ million people, he's right. There are many steps that need to be taken.
If by "we" he means his government overseers, then there are equally "many steps" they should not be taking. Unless, of course, he means stepping back out of our way. Then please, do, take some steps.
