Governments Are Worse Than No Good At Creating Jobs
Reason ed-in-chief Matt Welch lays out how government job creation moves like the Porkulus led to "fewer able-bodied Americans ... employed as a percentage of the potential work force than at any time since 1983":
Such persistence in the face of repeated failure suggests that some powerful myths continue to hold sway among politicians and many of the people they represent. Among the most stubborn of these is the notion that passing a bill to fix a problem is the same as actually fixing the problem. This assumption--which reaches its illogical conclusion during times of national panic, when do-something busybodies like Michael Bloomberg will say that it doesn't matter what Washington does, it just needs to do something--is oblivious to the law of unintended consequences, to the reality of corporatist lobbying, and to the limitations of government power....A curious flip side to the myth of government omnipotence is near-complete incuriosity about government side effects. That is, people remain convinced that the state can and should look a problem squarely in the eye and fix it, but they are rarely moved by daily examples of the harm caused by earlier fixes.
Just before Solyndra announced its bankruptcy, armed federal agents stormed three factories and the corporate headquarters of the Gibson Guitar Corporation, seizing guitars and raw materials, forcing employees out into the street, and shutting down production for a day. Why? Because of a century-old law called the Lacey Act, which prohibits the import of wildlife and plant products that were obtained illegally overseas. India, where some of Gibson's raw materials originate, bans the export of unfinished wood.
Overzealous enforcement of job-killing laws is the rule, not the exception, under Obama. His Department of Justice has shown much more enthusiasm than his predecessor's in conducting workplace raids to enforce immigration, drug, and even milk pasteurization laws. Politicians and the public support such relentless meddling without pausing much to consider the deleterious effects on employment. As I write, the California Senate is on the verge of passing a Domestic Workers Bill of Rights that would, among many other onerous things, require parents to provide nannies with breaks every two hours and fill out ridiculously complicated time cards for the government to peruse.
In a sense, every bill is a jobs bill, except for the ones labeled as such. Every business regulation, every intrusion between employer and employee, dampens the incentives to create more jobs. Sucking up tax money and spitting it out at politically chosen recipients is another net drag on the economy.







Absolutely true, but so many people don't get this. They think of "business" as just the giant corporations on Wall St. But most small businesses are also corportaions. You can't regulate one without regulating us all.
I just had government swoop in and threaten to shut my business down last month. They were going to shut my electric service off because I applied for a permit to bring it into compliance (it's old wiring from the 60s). So, I go to do the RIGHT thing, and bring it up to code, and they say, "This isn't up to code. We'll have to shut you down."
I didn't sleep for weeks, and had to actually BEG for a reprieve - and hire an expensive consultant to negotiate a compromise (basically, leave my electric on and running for the two weeks it'll take to upgrade. I mean, it's been running fine since the 60s - duh!).
This all takes away from my productivity and ability to hire new employees, buy new merchandise, etc....not to mention pay my taxes, if they put me out of business! Call it the trickle down damage done to the economy by overregulation.
lovelysoul at October 12, 2011 5:33 AM
"Overzealous enforcement of job-killing laws is the rule, not the exception, under Obama."
Not all laws. They used taxpayer money to buy guns and give them to the Mexican drug cartels in violation of Fedral laws. This was certainly designed to seed business for morticians, and law enforcement officers. Most of the dead are Mexicans, so I guess they don't count.
MarkD at October 12, 2011 6:54 AM
I am going to say it and I am going to get hell for it but I believe government could create jobs but the problems is the government so mucks it up and makes it so complicated that it just become a big waste of time and money.
Take two simple premises - people need jobs - An area needs some roads fixed. Ok maybe not the most efficient but lets spend the money and fix the roads. But then government and politics steps in and what is simple becomes FUBARed
So if one area gets money then another area also needs the same so less jobs and work done for the area that needs it.
Or then the work needs to be done by only Union members - thus instead of 200 people hired 100 get hired and take 4 times longer because of Union rules.
Or the work get awarded to some crony company that makes a simple job into something that takes twice as long and ten times as expensive but still the company promised it would be cheaper and on time.
Or... some group whines that they are not represented enough and the jobs should go to them - so before you know it instead of 200 jobs building and fixing roads, 100 women, minorities, party members, young, old, stupid, etc are hired as government administrators filing papers and sticking fingers into crotches.
Or a fancy white elephant of a project is touted instead so roads are still sucky but there is a nice fancy stadium employing 100 people but destroyed 200 jobs in the making.
Or a cause is embraced. Green, Pink, Rainbow are much pretty colors than blue, military green or white. Never mind the cause usually end up a boondoggle. So some busway/subway system that is the end of all carbon is built which goes to nowhere most people want to go and the roads still have potholes. Never mind that it will take 5 or more years to build and in 10 years is obsolete or hemorrhaging money and needs another injection of tax payer money.
I got berated about it a few weeks ago. But what the hell happened to commonsense in the US.
John Paulson at October 12, 2011 9:32 AM
"Or the work get awarded to some crony company that makes a simple job into something that takes twice as long and ten times as expensive but still the company promised it would be cheaper and on time."
Oh, Lord, if this isn't the case with every friggin' road project in my city. Actually, any time we need anything done, it seems that guy we pick to do it is related/college roomie/buddy with someone high up in the City Council or Mayor's Office.
cornerdemon at October 12, 2011 12:17 PM
My representative does not represent me. Whenever I send a note to him, telling him that voting for whatever absurdity is in front of him is not what I want, I invariably get some form letter back essentially saying "I'm voting for this crap regardless of what you oppose." And he's a Republican.
John,
I'll try to be nice.
Your whole premise is wrong. The government can not create jobs. They can create work for people. There is a difference. The government has no money that was not yours, mine, or "created" by someone's work originally. (A small portion does come from excise taxes and tariffs on foriegn made goods. But that is still someone else's work.)
So then the government takes money from me in the form of income taxes; sales tax (at the state and local level); and gas taxes (about 43¢ per gallon) to fund the road building.
Then they process a good chunk of our money up to the fed. That will use about 10% of the value between the IRS and the fed banks and such. Then the fed government turns around and give the same money back to the states with the provision that they follow federal rules. That is where the Davis-Bacon act, the DUI and seat belt laws, matching funds, etc. come into play. If you don't play by the fed rules, you don't get the money. (That is why the Alaska Bridge to Nowhere failed. The state wouldn't vote the funds for the bridge.)
So now the economy is in the dumps, and the government can get us out by building infrastructure. That money has to come from the people who are not working. Or from the 53% that are and actually pay more than they take in.
Yes the road workers are technically are working for the private sector, but the employers are getting income from the government at whatever level. The government gets its money from who?
So it is work, not wealth.
Gates, Jobs, BP, J&J, P&G create jobs and wealth. The government uses that money, but does not create more wealth, they create work.
Jim P. at October 12, 2011 7:35 PM
Yea Jim. P. I get where you are coming from. I agree. My understanding of economics is basic. And my leanings are still open/free market/capitalistic and I do know in the end that government would be a waste/loss of money. My thinking is like that 100 dollars goes in and 95 dollars would be used in a gain/profit. A lose of 5 dollars but maybe just maybe there would be some better intrinsical gains in the future. But it seems to have done a complete flip from 100 dollars spent and 5 dollars used.
It just drives me up the wall to look at the past. Obama comes into office and wheedles the big infusion of cash to help the banks and economy. Some portion of the money would be used to create jobs and a good portion of them where going to be shovel in hand kind of stuff. Then all these voices raised in what about us! One of the biggest was teachers. They cried and whined and said think of the children! SO what happens is instead of regular joes around the country getting some work this money went to prop up people who all ready had jobs who where costing us money before hand OR they just created jobs that served no real purpose or helped very little.
Some other ones you see recently are two big ass loans and grants to Solar Panel Companies. Which only create a couple hundred jobs (if lucky) for a few years before it implodes. You see figures of 35 million dollars per job created. Here is the thing with a couple of signatures - a couple hundred jobs could be created right now. Allow the pipe line from Canada to the South US be built but since it it dirty dirty tar sands oil it is getting stalled. Two sides a pipe dream of Green energy costs the government 1.5 billion dollars and the other would be no money but is politically incorrect.
I ask again what the help happened to common sense in the USA. Everytime I read a blog like Amy's or Instapundit it makes me want to bang my head against the wall.
John Paulson at October 12, 2011 8:41 PM
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