‘Government has never created a job’

Appearing as the lone representative of the private sector on the morning talk show "Fox News Sunday," Steve Wynn, chairman and chief executive officer of Wynn Resorts, sparred with Michigan Gov. Jennifer Granholm and Democratic economist Mark Zandi on the proper role of government in forging a stable recovery.

Unemployment rose to 9.8 percent nationally in September, the highest rate since 1983, and likely will climb for eight more months, peaking at 10.5 percent next summer. Layoffs, bankruptcies, and business closures continue to make headlines. Yet Mr. Zandi, who helped Washington's majority party write last winter's "stimulus" bill, insisted to host Chris Wallace that the recession "is over."

"Ten-point-five percent is a very reasonable expectation for the peak in unemployment, but I think it would be measurably higher if not for the stimulus package," Mr. Zandi explained for the benefit of simple-minded viewers who believe a "recovery" should involve getting people back to work. "The stimulus, in my view, is working. It's just gotten overwhelmed by the magnitude of the economic crisis. ... The idea behind the stimulus was to bring an end to the recession, to provide a catalyst for future growth and then to let the private sector take over, and it's done exactly that," bragged the co-founder of Moody's Economy.com.

"The recession is over. It's no accident that the recession has ended when the stimulus is providing its maximum economic benefit."

Ah. So the private sector has now taken back control of General Motors from the White House and Mr. Obama's union favorites? Factories are re-opening? Insolvent banks, no matter their size, have now been allowed to fail? All-new private bankers -- unrelated to the gang from Goldman Sachs or the Federal Reserve Bank of New York who've been running the Treasury for decades, regardless of the party in power -- have bought up remaining good assets at auction, meaning no more bailout or inflationary "stimulus" schemes will be needed?

Indiana Gov. Mitch Daniels disagreed, saying the stimulus has not yielded the benefits it advertised months ago.

"It's coming very slowly, if at all," the Republican said." "The stimulus, I ... don't think you can point to much effect so far."

The biggest bubble of the past decade -- even considering home prices -- may well have been the unsustainable growth in the size of gold-gilt government bureaucracies. Yet Mr. Zandi expressed pride that current administration policies, especially the stimulus bill's direct funding of state governments, have managed to prevent any substantial trimming of bureaucracies, at all.

"Of the $787 billion stimulus package, $300 billion of that was tax cuts to individuals and to businesses, 'Cash for Clunkers,' tax credits for home purchases," Mr. Zandi said. "Almost every state governor would say that they've been helped by the stimulus quite significantly. They'd be cutting even more aggressively if not for that."

Gov. Granholm, a Democratic attorney who gave up a Hollywood acting career when she turned 21 and served on the Obama presidential transition team, called for more tax incentives to create jobs as well as extending unemployment benefits in her state. (Michigan's unemployment rate is the highest in the nation at 15.2 percent. Nevada's is second highest, at 13.2 percent.)

"It would be good to see another targeted tax policy," Gov. Granholm told Mr. Wallace, "if you can target tax incentives to job creation and job growth."

But what does anyone at the White House or in Congress know about where best to "target" money to create jobs? Where a private investor might consider a coal-fired power plant to be a better investment than some "green" wind farm, government can never resist the temptation to use such subsidies to pick favorites -- especially if the favorites are the kind that would never pencil out for private financing in the first place, and are thus doomed to collapse as soon as the government subsidies are removed.

Mr. Zandi, for instance, made it clear the Democratic administration has no plan to let real estate prices fall to their natural market levels, where private investors would swarm to buy without government price supports.

"I think the housing market could also use some more help through an extension of the first-time home buyer tax credit into next year to try to keep this recent stability in housing values permanent," he explained.

A "stability" that can last only so long as government subsidies flow?

It was Mr. Wynn who, from his vantage point in the private sector, showed the clearest economic vision Sunday.

"The priorities of the administration should have been more directly focused on job creation from the day of the inauguration forward," he said. "That's the thing that changes America."

And the best way for government to promote job growth, Mr. Wynn made clear, is not to "target" pet political projects, but to simply cut taxes, leaving private parties with more resources to invest where they see the best chance for profit.

"If the government had used its power to restrain its tax collection, they would have given everybody who runs small businesses, large businesses, a chance to hire more people," explained the man who built The Mirage and Bellagio. "Government has never increased the standard of living of one single human being in civilization's history."

Mr. Wynn, who opened the $2.3 billion Encore at Wynn Las Vegas last December, said he hired 5,000 employees for the resort. And he's fearful that the current debate in Congress about further expansion of government programs, "a barrage of taxes that will result in more layoffs, that will not be helpful. It's counterproductive. ... Consumer confidence will return when the unemployment rate goes down. ...

"Government has never created a job," Mr. Wynn said; the only way to improve people's standard of living is to cut taxes on employers, thus allowing the free market to provide them with jobs.

The health care debate has delayed any economic fix, Mr. Wynn said -- which is certainly true, as Congress extends uncertainty about the future profitability of businesses.

"Health care is something I know about," Mr. Wynn said. "It's a complicated and technical issue. Everybody in this administration has zero experience in dealing with health care. They should be focused on job creation."

Amen.