President-elect Obama, reacting to a turbulent economy and increasing unemployment, has promised to create one two three four million jobs, the majority of which would be in the private sector. Focus on this initiative has been aimed towards crumbling roads, antiquated school buildings, and other items of American infrastructure.
I pause, though, to ask a simple question, and one that has been oft-repeated in different circumstances: since when did we elect a President to create jobs in the “private” sector? Isn’t that the domain of a socialist central-planning autocracy?
Even so-called conservatives are clamoring for this money, eager to keep their constituents well-fed and fully employed. Few, it would seem, have any strong moral objection to one man creating jobs through fiat.
As can be expected, one of the voices in the wilderness—Texas congressman Ron Paul—has sounded off on this issue, correctly noting the farce of government attempting to create “private” sector jobs:
Contrary to the belief of many, the goal of the economy is not job creation. Jobs can be a sign of a healthy economy, as a high energy level can be a sign of a healthy body. But just as unhealthy substances can artificially give the addict that burst of energy that has nothing to do with health, artificially created jobs just exacerbate our problems. The goal of a healthy economy is productivity. Jobs are a positive outcome of that. A “job” could be to dig a hole one day, and fill it back up the next, or perhaps the equivalent at a desk. This does no one any good. But the value in that paycheck ultimately has to come from taxing someone productive. Some think this round-robin type of economic model is supposed to get us somewhere.
Since the security blanket of government administration reduces (or eliminates) the impetus for productivity, accountability, and demonstrable results, we can expect that any attempt to create jobs simply to provide employment and satisfy a clamoring electorate will not increase the productivity of the nation in the aggregate. Rather, like the bulk of government leeches, these new jobs will simply drain resources from what would otherwise be productive and fruitful ventures—those created through the free market in response to a perceived need and without burdening taxpayers in the process.
Any attempt to create wealth or employment through government distorts reality by obfuscating it, as illustrated in Bastiat’s broken window fallacy. While people readily see new jobs being created, what is rarely apparent is the many ways in which the capital, resources, and labor might have been otherwise directed if left to pursue their own course. Philosophy aside, Obama has history against him in this battle; this same type of make-work program has previously had the opposite result than the one proclaimed at the outset:
[Obama's stimulus package] is part payoff to the urban political machines, labor unions, and other special interests that helped get him elected, and part vote-buying (with federal tax dollars) scheme as the first step in his 2012 re-election campaign. It will no more “stimulate” the economy than Herbert Hoover’s 1929 “stimulus package” did, despite the fact that it accounted for 13 percent of the entire federal budget. Hoover continued to increase “public works” spending by massive amounts, accompanied by massive tax increases to pay for it all. FDR did the same, increasing the amount of spending and taxes by orders of magnitude. All of it had no positive effect whatsoever on the overall economy; the primary economic effect was to balloon the size of federal, state, and local governments at the expense of shrinking the private sector – and to create more private-sector unemployment.
Job creation through fiat is ultimately more destructive than it is productive. The person who most benefits from such a policy is not the unemployed individual but the (always) vote-seeking socialist president.
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