My column this week is about the politicians' continued deceptive and ignorant job program push. I had to laugh, when President Obama, in one speech, cited the transcontinental railroad as an example of why we need more subsidies for infrastructure projects.
The transcontinental railroad lost tons of money. The government never covered its costs, and most rail lines that used the tracks went bankrupt or continued to be subsidized by taxpayers. The Union Pacific and Northern Pacific -- all those rail lines we learned about in history class -- milked the taxpayer and then went broke.
One line worked. The Great Northern never went bankrupt. It was the railroad that got no subsidies.
American infrastructure is important, which is why government shouldn't be involved.
We need infrastructure, but the beauty of leaving most of these things to the private sector -- without subsidies, bailouts and other privileges -- is that they would have to be justified by the profit-and-loss test. In a truly free market, when private companies make bad choices, investors lose their own money. This tends to make them careful.
By contrast, when government loses money, it just spends more and raises your taxes, or borrows more, or inflates. Building giant government projects is no way to create jobs. When government spends on infrastructure, it takes money away from projects that consumers might think are more important.
On my show that aired on Fox Business last week, I talked with Peter Schiff, the CEO of a brokerage firm who says government regulations stopped him from hiring new workers. He testified to Congress about that.
People don't appreciate the number of regulations entrepreneurs face. Schiff pays 10 people just to try to figure out if his company is obeying the rules.
'You can't just act very quickly, because everything has to be done through this maze of compliance. Even my brokers ... find out that maybe 20 percent, 30 percent of their day is involved in compliance-related activity, activity that is inhibiting their productivity. ... All around the country, people are complying with regulations instead of producing, instead of investing and growing the economy. They're trying to survive the regulations.'
You can read my entire column here.