In response to my recent Denver Post column on dunderheaded legislation pouring out of the state legislature (“Democrats against business,” March 25), one self-described executive replied that he was unable to “make sense” of my criticism of Senate Bill 28. This is a “work share” program that would avoid prospective layoffs by cutting back the hours worked by other employees and paying them all “under- employment insurance.” He couldn’t understand why this would cost more than just laying off a smaller number of workers.
As I explained to the confused businessman, if two people were laid off and paid unemployment insurance, they’d have an incentive to quickly find new jobs and replace their full pay. Conversely, if rather than laying off two workers, 20 would have their hours reduced by 10 percent each, they’d likely stay at their jobs and collect the offsetting underemployment allowance. This would result in a greater total outlay of under-employment insurance payments from Colorado’s already bankrupt trust fund.
Additionally, in the absence of this work-sharing program, an employer would be inclined to lay off his two least-efficient workers. By “sharing” the burden among all 20, he’s getting fewer hours worked and less productivity out of his best employees.
The confused businessman must be a Democrat.
The common delusion of all these counterproductive bills is that Democrats in government somehow imagine they have the brilliance to restore the economy with their meddling. This is a longstanding conceit. As legend has it, during the reign of Louis XIV in France, his finance minister, Jean Baptiste Colbert, sent for the kingdom’s leading merchants. In order to win their allegiance, he asked what he could do for them. Their unanimous answer was, “Pray sir, laissez nous faire,” which translates to: “Let us do for ourselves.” That, purportedly, is the derivation of the term “laissez faire” economics.
Whether or not it happened exactly this way is beside the point. You get the idea. Government can’t give anything to anybody without taking it away from someone else.
An international market economy with trillions of economic transactions every day is far too complicated for any collection of bureaucrats to understand or control. Of course, since the invention of government, there’s never been a truly laissez-faire economy and never will be. That’s why economists use the term “political economy” to describe the confluence of politics and economics. The debate is always about the degree of government involvement, with conservatives arguing for less and liberals arguing for more. This time around, in the name of “economic stimulus,” after the expenditure of hundreds of billions and the commitment of trillions in debt, President Obama and Democrats at the federal and state level have accomplished pitifully little in the short run while laying the groundwork for devastating economic consequences when the debt and inflation bill comes due in the long run.
Here’s another example: A recent press release from Gov. Bill Ritter’s office heralded a federal government grant to Colorado’s Tri-County Health Dept. of $10.5 million (that the U.S. Treasury doesn’t have) under the American Recovery and Reinvestment Act to promote “healthy eating and physical activity” in Adams, Arapahoe and Douglas counties. Seventy percent of this is allocated to school districts, municipalities and other community organizations. This was Colorado’s share of $372 million, nationally. However nice it may be to promote healthy eating and physical activity, who in his right mind can believe that this will stimulate the economy and that it justifies additional deficit spending?
It’s been said that the private sector is that part of our society under government control, while the government is the part that’s out of control. This is a good time for politicians to do nothing more and get out the way of economic recovery.
Mike Rosen’s radio show airs weekdays from 9 a.m. to noon on 850-KOA.
