The Lampert Letter

Sometimes we get the feeling that President Obama is just talking jibberish, as he did yesterday when he met with his new Council on Jobs and Competitiveness. “We’re going to have to up our game in this newly competitive world.” He was talking to such figures as Jeffrey Immelt of General Electric, Richard Trumka of the American Federation of Labor-Congress of Industrial Organizations, Kenneth Chenault of American Express, and Ellen Kullman of DuPont. The best the headline writer for Bloomberg could do is this tautology: “Obama Tells Panel of Advisers U.S. Recovery Is Challenged by Jobless Rate.”

Next time maybe Mr. Obama will include someone like Edward Lampert of Sears Holdings. His annual letter to shareholders is a classic of the genre. In 2009 he recommended F.A. Hayek’s “The Road to Serfdom” and “The Fatal Conceit.” In 2010, he asked, “Did the seizure of Fannie Mae and Freddie Mac (the largest nationalization in our country and likely in history) calm or ignite fear in the financial markets and did those urging or supporting the seizure profit from it?” This year, as Mr. Obama was meeting with the business leaders, Mr. Lampert issued his latest shareholders letter:

Business leaders don’t sit around thinking, ‘How can we create more jobs?’ They think about, ‘How can we create more value?’ or, ‘How can we create more and better products?’ or, ‘How can we grow our company?’ The addition of new jobs in any business is driven by these types of questions and answers to them. When business leaders are summoned to Washington for ideas on how to create more jobs, it is hard to imagine how these conversations will actually produce more jobs, because they fail to address the real questions that drive businesses and hence job creation.

Increasing taxes and regulation creates uncertainty for private businesses and individuals, which is exactly what inhibits job creation in the first place and may even make it harder for employers to maintain current levels of employment. Taxes remove resources from productive enterprises and individuals. Regulations restrict freedom to compete on different business models and rules. Whether businesses or individuals can ‘afford’ to pay these taxes or ‘live’ with these rules is beside the point. Risk taking by individuals and businesses is the leading generator of job creation, and increasing regulation and taxation almost always reduces risk taking.

Too often, the focus on job creation is on small businesses…That is not to say that the government should favor large businesses. It should not. The government should stay out of business as much as possible. Wherever possible it should reduce its role. For those who believe in bigger government and more regulation, I would only say that they should recognize the consequences of those beliefs. For many people, that means fewer jobs available and less hope for new jobs. It may also mean the creation of jobs that are not needed and that will prove to be unsustainable.

No doubt there will be those who will ridicule such talk. But we are now more than two years into an administration that rose to office on a campaign mantra of change, and the unemployment rate has been remarkably stubborn. It cost the Democrats control, among other things, of the House. And now the president is reduced to convening our most famous chief executives and labor leaders and telling them that the recovery is, to quote that headline again, “challenged by the jobless rate.” America needs politicians who will stand up for free enterprise and free markets, for sure. But it would help if he could find a capitalist to stand up for capitalism.