by John Mattingly
Imagine these two words spoken a thousand years ago, or five hundred, or even a hundred years ago, when most people were so survival-shackled the last thing they wanted was more jobs to be created.
An extreme contrarian might suggest that a 10 percent jobless rate in the U.S. is actually a sign of our success. We’ve reached a state in which one in ten people aren’t working and the nation isn’t falling apart. Not yet, anyway. In fact, this may be the new reality: obsolescence of the human worker. As a species of tool makers, we may have tooled ourselves out of a lot of work. Economists point out that innovation vanquishes certain jobs while creating new ones, but who knows? This time, maybe not. Maybe ten, or even twenty percent of the population won’t have a job.
Check out the agricultural sector. When most of the human labor force moved to the cities, tractors and machinery replaced them. Manufacturing and servicing those machines created new jobs, but the machines lived longer and were more efficient than humans. Eventually there was a net loss of human jobs in the farm sector. Fewer people doing more net work. By integrating tools and technology, worldwide agriculture has consistently increased production with an ever-declining workforce. Job elimination on the farm is probably a good thing. I run into people all the time who say “I’m sure glad I left the farm.”
Unless people want to come out to the farm and hoe weeds, dig irrigation ditches, stack hay, and shovel commodities, or unless they want to become mechanics, the prospect of job creation on the farm simply isn’t going to happen. More likely is a continuation of the trend of producing more and more from fewer and fewer human jobs. I suspect this is true in many other sectors as well. The combined leverage of knowledge and experience consistently eliminates more jobs than it creates.
But let’s return to the concept of “wanted work” rather than work wanted. Today, there’s still probably plenty of work, but not the kind of work most people want to do, or see themselves doing, or can conveniently head off into the sunset and start tomorrow. Not only are the entitlements of social security, medicare, public pensions, and interest on the national debt threatening to draw and quarter our national treasury, a pervasive attitude of entitlement is effectively, ironically, holding us down.
Culpability for this must be shared with those promoting the notion of “never give up on your dreams,” the power of attraction, be all you can be, and all the rest of the ridiculous and relentless routines for self enhancement. The fact is, performing any function for the short time we’re alive on earth is a miracle. We need no enhancement, and maybe that’s the real secret, maybe that’s what enables a person to love their work, whatever it may be, even if it isn’t a dream job. The self-enhancement movement tends to create a constant, low-level dissatisfaction in people, causing them to always wish and wonder why they’re not doing something else, something better, something out there somewhere. Which amplifies the notion in some people that they are entitled to something better. Nope.
Someone has to do the necessary spadework of the society, but few kids go to their high school counselor with the stated ambition to become a garbage collector, farmer worker, hotel maid, janitor, or any minimum wage employee. And why not? I really don’t know. What’s wrong with the basic jobs of society? I learned a lot from Jake, the janitor at my junior high school. He was a philosopher who knew the building inside and out. He spent a lot of time reading, conversed easily from Aristotle to Hume to Sartre while keeping the building in order so four decades of students had a roof over their heads. I considered him more important than those in the school administration, who were so busy following their dreams to a better paying job they never seemed to be paying attention and nearly burned the building down. Twice. And then, of course, they tore the building down, replacing it with a building so poorly built that Jake resigned.
Over the years I’ve learned as much or more from people doing the basic work of our society as from those who are always dreaming about some ladder leading to a higher place. What’s wrong with doing a common job and doing it well? Instead of “never let go of your dreams,” how about: “wake up and do a good job?” I recognize here that having meaningful work is a good thing, but at least half of the “meaning” in meaningful comes from the worker, not the job.
In Washington, the debate over job creation turns on whether government spending/stimulus can create jobs (more or less the Democrat’s agenda), or whether “government is the problem” (definitely the resurrection of Ronald Reagan) and so government should step aside, lowering taxes so the private sector can get busy and save us.
I believe both are mostly wrong. Government spending ends up being a thin tax on all of us, one way or another, and Reagan’s faith in free enterprise proved an excellent argument for regulation. I believe the most critical element in job creation is access to, and respect for, capital. I add respect to the capital equation because some people fall into a heap of capital without having to yank it out of the economy and have no respect for how hard it is to come by. Money is stored work, and it usually takes a little stored work to get things going. There are people who boast about starting with nothing, but if you scratch the story long enough, you usually find that somewhere along the line, someone added stored work to the work in progress.
I’ve never liked the old cliché, “it takes money to make money,” because it carries the passive suggestion that merely having money automatically yields more. There are countless cases of people who had plenty of money and blew it. I’ll never forget one of my high school chums who inherited $20,000 in the late 1960s. He spent nearly all of it on a Porsche, wrecked the car, traded the salvage for a motorcycle, wrecked it, traded the salvage for hashish and smoked it. That same $20,000, if invested stocks, bonds, or even a CD, would have provided him with a nice retirement today.
Access to capital means a borrower who knows the meaning of a dollar and a lender who knows people. Back in the ‘60s and ‘70s I routinely called my banker from the Sale Barn to tell him a big check was coming though for livestock I’d just purchased. My banker covered my check. I came in to the bank during the next month or so and filled out the paperwork. This was possible because (a) banking regulations were less stringent, and (b) I had a banking relationship with a man who knew me.
The success of this schematic has been amply shown in Third World micro-lending, where even a small amount of capital, placed without a maze of regulation to the right people, creates jobs. I mention here parenthetically that women have proven to be more reliable borrowers than men, a statistic confirmed by my own lending experiences. I’ve never had a woman default on a loan. Men, on the other hand, have asked for a loan with extravagant pledges of integrity and honor, only to act like they’re doing me a favor to make the next payment.
Bankers in the U.S. today are seldom personal bankers. Loans come out of committees where the blame for bad loans can be spread around the table, thin as the skin on the sausage that made them. Then many banks don’t service their own loans. They sell them to the secondary market, dispensing with responsibility for the reliability of the borrowers.
This separation between banker and borrower is all the more curious because it has occurred during a time when there are more banks than ever. Check your own town: you’ll find the sheer number of banks has grown remarkably in the last 25 years while the personal aspect of banking has been in nearly proportional decline. All the bad loans written during the 2008-09 crisis were signed by people who fit in the boxes and filled out the mountain of paperwork, and many loans today are being denied because more, smaller boxes are on the application, and more papers are required. It’s not only a case of closing the barn door after the cow escaped, it’s keeping the door closed when there’s a blizzard outside and the cow wants back in.
Given what Thomas Jefferson called, “the inscrutable arrangement of causes and consequences,” it’s tempting to suggest that job creation would be stimulated significantly if Congress simply passed a law requiring all banks in the U.S. to service their own loans, or, if they sell loans into a secondary market, the sale must be with recourse. This means if the new holder of the loan experiences a default, that holder can seek recourse for a remedy back to the originator of the loan.
A simple move such as this would place a positive incentive toward personal banking in two ways. First, the banker (or committee) would have retained responsibility for their loans and thus take a deeper interest in getting to know their borrowers. Second, it’s usually harder for a borrower to default on a perceived personal relationship than to stick to some holding company in Delaware or Nevada. While this would be doubly effective in the case of women borrowers, Congress passing a law requiring all loans be made to women would be considered sexual discrimination.
As for tax breaks, or tax incentives, leading to more job creation, I think the advocates of this strategy ignore the incentives already embedded in the current tax code. Broad brush, the tax code divides taxpayers into two groups: those who file with W-4 income, and those who itemize. The latter usually own assets such as real estate or machinery and thus itemize depreciation as an expense, reducing their tax bill.
Most small, or even large, startup businesses require capital assets as part of the business plan, so they already enjoy, or have access to, one of the best ways on schedule to reduce their taxes. In fact, most businesses in either an incubation or expansion phase seldom need tax breaks. They have plenty of deductions, simply as part of the process of originating or growing the business.
The problem here goes again to the lending institutions. It’s difficult in the current banking climate to convince a lender that you’re going to build your business in part with tax dollars captured through depreciation. The reason: you have to borrow the money to buy the asset, and you can’t demonstrate the tax advantage of the asset until you’ve bought it and put it to work for a year.
Nevertheless, the best advice I can suggest to any new or growing business person is to (a) have a solid business plan, and (b) seek, and demand, a banking/lending relationship with a bank/person who will look you in the eye and receive your payments.
John Mattingly cultivates prose, among other things, and was most recently seen near Creede.
