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July 24, 2011

The Dialog About Jobs Has Become Deranged.

James at The Motly Fool wrote:
In my humble opinion it isnt [SIC] regulation that is preventing the big corps [SIC] from spending, its [SIC] greed. The first paragraph says it all, why hire when we can squeeze more out of the lucky SOB's [SIC] that still have a job.

If you ever started a business you would know that it was not for the purpose of hiring 100 workers. More likely it would be to fulfill some dream of yours to bring a useful product or service to market. If you succeeded, you would be hiring hundreds, thousands or even hundreds of thousands of workers.
Wal-Mart Stores Inc. (WMT) Full Time Employees: 2,100,000
Fewer but better paying jobs: Apple Inc. (AAPL) Full Time Employees: 46,600
As you can see from the above data, the number of jobs depends neither on the company's market CAP nor the amount of cash in the till. It depends on the number of spots where a worker is useful.

The dialog about jobs has become deranged.

Left wing politics have converted jobs into another "human right" and right wing analysts have fallen into the trap by saying that jobs are needed for a recovery. It is only when you unleash business, when you encourage entrepreneurs to take their dreams to market, that jobs will come back. As long as you saddle entrepreneurs with high taxes, mountains of regulations (busted teenage lemonade stand -- three jobs destroyed!) and uncertainty, they'll be afraid to risk their fortunes to fulfill their dreams.

How many companies have you started? I started three in addition to being self employed from time to time without incorporating. When government regulations in Venezuela bankrupted my business I swore never to invest in Venezuela again. Venezuela was the loser and America the gainer because I started my third company in California. My motivation was no different from other entrepreneurs, I had a dream product that I wanted to bring to market. But I certainly was not going to do it if the government could bankrupt me at any time with excessive regulations. (A teenage lemonade stand requires a minimum of three government permits!)

My California business was trying to get Apple Computer as a client. At one point I received a questionnaire about the ethnicity of my company. We were two white guys and a white girl which would make us Caucasians. But all three of us are from Latin America which would make us Hispanic. Except none of us had any Hispanic ancestry: One German-Hungarian, the second Greek-Italian and the third fully Italian so we are back to Caucasians except that one of us being of Jewish ancestry, it would more likely be Semitic. And in any case, what does it have to do with the quality of our product or service? After mulling it over I replied to Apple that if they liked what we had for sale, we would be happy to sell it to them but we were not going to fill in stupid paperwork. Our loss? Yes, but California lost jobs! Regulation killed jobs!

Denny Schlesinger

Wal-Mart Stores Inc. (WMT) Full Time Employees: 2,100,000
Apple Inc. (AAPL) Full Time Employees: 46,600
Busted teenage lemonade stand -- three jobs destroyed!
A boom in corporate profits, a bust in jobs, wages

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