President Barack Obama hosted a “Jobs Summit” today in an effort to appear to be doing something about the nation’s double digit unemployment. As Neal Boortz noted, he met with Andy Stern, the President of the Service Employees International Union, the President of the United Steel Workers union and other big Obama donors, but not the U.S. Chamber of Commerce or small business owners.

It’s troubling when you consider the minds he tapped to solve the unemployment problem are some of the same minds that helped create it, especially when you recall what Einstein said about problem solving:

“Problems cannot be solved by the same level of thinking that created them.”  

According to the Associated Press, Obama challenged this group to “help him come up with innovative ideas for putting millions of Americans back to work, saying he wants the ‘biggest bang for the buck.’”

It’s an interesting statement. There are several things that would have a profound impact on the country’s employment, but I doubt this group ever thought of them, let alone discussed them.

1. End the Minimum Wage

When the Democrats started pushing an increase in the minimum wage, economists explained it would not help people increase their standard of living, nor would it create a living wage for people living in poverty. They expressed concern that it would actually result in increased unemployment.

Congress passed it anyway and President Bush signed it into law.

Fast forward to today and see the economists proven correct:

The results are as theory predicts: unemployment among whites age 16-19 is at by far the highest rate in 10 years: 25.3% in October, up 28% from 6 months earlier and 36% from a year ago. Among African-Americans of the same age group, the unemployment rate is an intolerable 41.3%, up 19% from April and up 25% from a year earlier. The Hispanic or Latino youth unemployment rates are 35.6% (October), 26.5% (April), and 28.3% (October 2008).

Why does this happen? Thomas Sowell explains:

The net economic effect of minimum wage laws is to make less skilled, less experienced, or otherwise less desired workers more expensive — thereby pricing many of them out of jobs. Large disparities in unemployment rates between the young and the mature, the skilled and the unskilled, and between different racial groups have been common consequences of minimum wage laws.

If less skilled, less experienced workers weren’t mandated a high wage, they would be able to get a job and work their way up. No, they wouldn’t have big money right away, but they would have a job, which is a big first step.

2. Privatize Social Security

In FY2008, the Federal government seized almost $1 trillion from the American people in order to continue the intergenerational Ponzi Scheme that is Social Security. What it didn’t pay out, it transferred to the General Fund and spent.

What if instead it transferred that trillion bucks into private accounts that were investing in mutual funds and stocks, much like a 401k plan? Do you think that would have any impact on the economy?

Cato details what effect privatizing employee pensions can do for unemployment. In 1980, unemployment in Chile was at 20 percent. Following privatization, the country saw a vast improvement:

A second–and, to me, extremely important–one is that the new system reduces what can be called the payroll tax on labor. The social security contribution was seen by workers and employers as basically a tax on the use of labor; and a tax on the use of labor reduces employment. But a contribution to an individual’s pension account is not seen as a tax on the use of labor. Unemployment in Chile is less than 5 percent. And that is without disguised unemployment in the federal government. We are approaching what could be called full employment in Chile. That’s very different from a country like Spain, with a socialist government for the last 12 years, that has an unemployment rate of 24 percent and a youth unemployment rate of 40 percent.

3. Lower Corporate Income Taxes

Along with the minimum wage, there are other policies that drive unemployment down. The looting of corporations is a big one. The more a government takes in taxes, the less a corporation has in profits, lowering its ability to hire new employees. Also, the higher the corporate tax rate, the less attractive it looks to companies.

That’s why Ireland did so well. Even New York Times Columnist Thomas Friedman agrees:

[M]ake your corporate taxes low, simple and transparent…and you, too, can become one of the richest countries in Europe.

Ireland’s corporate income tax is 12.5 percent. America’s is 39.1 percent. The only country in the world higher than America is Japan. The last time corporate tax rates were lowered was during the Reagan Administration. Perhaps this is an area Obama and Co. should look at in order to boost employment. Or they could…

4. Implement the Fair Tax

Rather than lower corporate tax rates, we could just eliminate them, along with all the other taxes. If lowering it would attract business, what would eliminating it do:

Bill Archer, former head of the House Ways and Means Committee, asked Princeton University econometricists to survey 500 European and Asian companies regarding the impact on their business decisions if the United States enacted the FairTax. Of these companies, 400 responded that they would build their next plant in the United States while the remaining 100 companies said they would move their corporate headquarters to the United States.^[24][25]

Any chance the panel of “experts” helping Obama figure out what to do next thought eliminating the income tax would be a good first step? Yeah, me neither.

5. Slash the Budget

$3.6 trillion. That’s the size of the Obama budget.

I don’t want to get into the details of what to cut and how much. I’ve done that before.

I just want you to consider that number for a minute. The federal government is removing nearly $4 trillion from the economy. If we returned just half of that to the people, they could do incredible things with it. Start new business. Expand old businesses. Hire and hire and hire.

If the government doesn’t take from the employers for unConstitutional Ponzi schemes and other programs, businesses will have it to hire more employees.

These ideas would have a profound impact on the unemployment rate in America, but it is doubtful they were considered good policy by this administration. They have shown a dedication to leftist ideals that produced the Great Depression and it is unreasonable to think they would find solutions in free markets and decreased spending.

It’s more likely to see the opposite. Many of the left wing economists look to John Maynard Keynes as the savior, claiming the reason it didn’t work in the 1930s was because enough wasn’t spent.

They won’t make that mistake again.

Related posts:

• Another Miss by Mitt
• Minimum Wage Laws Hurt the Poor and Help the Unions
• My AIP Column: When the Cure is Worse than the Disease: Raising the Minimum Wage
• Stimulus Package Neglecting Areas with High Unemployment
• How Democrats Destroy Economies Starring Gov. Jennifer Grandholm