Creation Myth

Governments are worse than no good at “creating jobs.”

A week before President Barack Obama was scheduled to deliver yet another big-think proposal to Get America Working Again, reality intervened with a well-timed smack upside the head: Solyndra, a California solar panel company, filed for Chapter 11 bankruptcy.

Back in May 2010, as part of the run-up to what the administration was then touting as “Recovery Summer,” Obama used Solyndra as a poster child for both the 2009 American Recovery and Reinvestment Act and his long-stated promise to create millions of “green jobs.” During a visit to the company’s factory in Fremont, he declared: “We invested…in clean energy because not only would this spur hiring by businesses but it creates jobs in sectors with incredible potential to propel our economy for years, for decades to come. And we can see the positive impacts right here at Solyndra. Less than a year ago, we were standing on what was an empty lot, but through the Recovery Act, this company received a loan to expand its operations. This new factory is the result of those loans. Since ground was broken last fall, more than 3,000 construction workers have been employed building this plant.…When it’s completed in a few months, Solyndra expects to hire 1,000 workers to manufacture solar panels and sell them across the country and around the world. And this in turn will generate business for companies around our country who will create jobs supplying this factory with parts and materials.”

Or not.

Solyndra’s $535 million failure was not an unlucky one-off. According to Environmental Protection Agency numbers cited by Investor’s Business Daily in August, the Recovery Act’s $7.2 billion in “clean tech” money had “created or retained” a pathetic 7,140 jobs, at a cost of about $1 million each. According to the Department of Energy’s inspector general, one reason for this paltry payoff is the wage and regulatory provisions of the Davis-Bacon Act, the National Environmental Policy Act, and the Buy American Act. 

In sum: The government scooped up hundreds of billions from taxpayers, redistributed it in the name of creating jobs, then attached a series of requirements that made job creation much more expensive and therefore unlikely. The predictably miserable results (go to reason.com and conduct searches on “green jobs” and “multiplier” to see just how predictable they were) should have, but did not, shame a broad swath of the political class into a long-overdue facing of facts: Governments the world over are worse than no good at “creating jobs.”

That much is clear when we compare the job creationists’ rhetoric to their results. Every day on the campaign trail, then-candidate Obama promised to create 5 million “green jobs” during the next 10 years. In January 2009, the White House predicted that the stimulus it was finalizing would create up to 4.1 million jobs. (In a depressing bit of symmetry, the economy ended up losing 4.7 million nonfarm payroll jobs in 2009, according the Bureau of Labor Statistics, representing the greatest rate of decline since 1945.) In February 2010, then–House Speaker Nancy Pelosi (D-Calif.) vowed that the soon-to-pass Patient Protection and Affordable Care Act would “create 4 million jobs, 400,000 jobs almost immediately.” The last time Washington, D.C., was in a frenzy to “create jobs,” while passing an already-forgotten jobs bill in the summer of 2010, Pelosi promised this latest dollop of $26 billion would create or save 300,000 more.

And these are just the job-focused bills. The general idea of using government spending to stimulate aggregate demand, particularly during economic down times, ruled official Washington for a solid decade, starting with George W. Bush’s inauguration and ending last summer with the Tea Party–influenced debt ceiling deal, which marked the first time in recent memory elected officials stood athwart spending and yelled “stop!” The results of this Keynesian stimulus (and anti-Keynesian profligate spending during good times) should speak for themselves: Fewer able-bodied Americans are 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.

The 2010 Wall Street Reform and Consumer Protection Act, passed in the name of ending “too big to fail,” actually paved the way for the next round of financial bailouts. Obama-Care, supposedly rammed down the throats of health care “special interests,” was actually rammed down the throats of Americans at the behest of those special interests. The Troubled Assets Relief Program, sold by then-President George W. Bush as a way to prevent bank failures, stock market losses, housing devaluations, home foreclosures, credit tightness, business failure, job losses, and recession, failed utterly at preventing anything on that list. 

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.

The cover feature of this issue (“Get a Job!") suggests a different approach. Free market thinkers such as Nobel laureate Vernon Smith, market soothsayer Peter Schiff, and economic historian Amity Shlaes offer their best ideas for creating a legislative and regulatory framework more conducive to job creation. The policy proposals are rich and various, but Contributing Editor Deirdre McCloskey highlights what may be the most salient point: “‘Jobs’ are deals between workers and employers, and so ‘creating’ them out of unwilling parties is impossible. The state, though, can outlaw deals, and has.” Until that insight sinks in, it will be a long time before America gets back to work.  

Matt Welch is the editor in chief of reason and co-author of The Declaration of Independents: How Libertarian Politics Can Fix What's Wrong With America (PublicAffairs).

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • ||

    In the long run, we are all unemployed.

  • Arf?||

    You're too short-sighted. In the long run we're all dead.

  • Anonymous Coward||

    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.

    The problem is NEVER the scope of government. It's just that the right people aren't in charge.

  • ||

    Are we the people you have been waiting for?

  • ||

    No, we were waiting for ourselves. We just can't quite determine why things have not worked out as planned.

  • ||

    As The Firesign Theatre famously put it: "I think we are all Bozos on this bus."

    All politicians (Dems, Rpubs, etc.), by their nature, are activists. My feeling has always been that they are most effective when they don't just do something, but just stand there. Otherwise, they are simply the Bozos in charge of driving unintended consequences - usually bad ones.

    And, I fear that our choices are usually between bad and worse. I don't see it changing any time soon.

  • ||

    Pretty clearly we are. What remains unclear is if we have arrived or if we are still on our way and will be here soon.

  • jtuf||

    It's a bit ironic that shortly after the fall of the USSR, Clinton won with the slogan "It's the economy stupid." Cold War ended with each side adopting some of the beliefs of the other rather than one side clearly winning.

  • Gilbert Martin||

    It's also ironic that the economic recovery began before Clinton ever took office and he has absolutely nothing whatsover to do with creating it or sustaining it.

  • Chupacabra||

    They created the internet.

  • Gilbert Martin||

    Ha ha ha

    That's a good one.

  • ||

    Governments do not create wealth. They consume/destroy it.

  • ||

    Never ever? There's NOTHING that a government can do to create wealth?

    If that was the case why would we ever have a government.

    Besides the basics of rule of law etc (which I believe does help create wealth).

    Government also have the benefit of being able to focus on a longer time frame.

    If you're familiar at all with capital budgeting and net present value you know that projects with benefits past 20-30 years don't have those later benefits count for much. But from a society standpoint don't we still benefit?

    Does the electricty being generated by the Hoover dam etc really have no value?

  • ||

    Government also have the benefit of being able to focus on a longer time frame.

    That time frame being the election cycle.

  • Almanian||

    ^^this^^

  • RandomGermanDude||

    If at all. It's sad how some of the people who complain about all those shareholders just having a time frame to the next quarterly figures but don't see how politicians sometimes act on even shorter terms.

  • ||

    Government also have the benefit of being able to focus on a longer time frame.

    Are you fucking serious? Not only what Greg said, but a politician's explicit objective is to kick the can down the road so the next guy has to deal with it. Yeah, it's specifically long time frames: the worst kind. The kind your children pay for instead of you.

  • GE||

    They created some of our wealth, bitchz!

  • ||

    Wealth arises only in exchange. Stuff that sits unsold is not wealth.

    Only those things that have exchangeability give rise to wealth. Where there is no exchange, there is no wealth. Where exchange ceases, wealth ceases. This should be clear.

    Politicians had built FermiLab, the physics labs and particle accelerator. It is to be shut down.

    Is it wealth? Was it ever? If no one buys it, it is not wealth.

    Capital is a product bought from another that yields goods and gets used in production of something else for profit.

    Politicians and bureaucrats do not engage in capital budgeting. They do not seek profits.

  • ||

    That's bullshit. Something doesn't have to be sold to be wealth.

    If I build a house my own house and never sell it, my house is still worth something. It's providing value to me. Keeping the rain off my head etc.

    Also capital doesn't have to be used to generate something for profit. What about non profit hospitals? They are providing value to both the customers, and those that donated to create them.

    The points about the election cycle are well taken. Although I submit it wasn't always as bad as this. It seems like it was much more acceptable to invest in the future in times past.

    It always amazes me how in the 1960's etc we were able to build so much, and now we can't even maintain the shit we built, much less build more shit.

  • sevo||

    "If I build a house my own house and never sell it, my house is still worth something."

    Did you purposely ignore this?:
    "Only those things that have exchangeability give rise to wealth. "
    The fact that you haven't yet exchanged a good doesn't make it 'nonexchangeable'.

  • ||

    That's still wrong. There's also value/wealth in things that never get exchanged.

    Say clean air and water.

  • ||

    And what about my anal plug? I can't exchanged because I've used it so much, but it has value to me.

  • Bob||

    Sure, air and water never get exchanged, they just sit out there in nature never touched my mankind!

  • ||

    HUGS!
    Oh wait, you can sell those.

  • sevo||

    "That's still wrong. There's also value/wealth in things that never get exchanged.
    Say clean air and water."

    There is some value, and it is impossible to determine its amount since they *aren't* traded.
    There is zero wealth.

  • Ska||

    Water isn't traded?

  • sevo||

    "Water isn't traded?"

    If it is, it has the potential of expressing wealth.

  • anon||

    I just wanted to pop in and end this ignorant thread:

    Wealth is the accumulation of capital. How that capital is employed is of no consequence to anyone without both a buyer and seller. Any determination of value by a third party in the employment of said capital is absurd, as the judgement of value can only be made my the two parties exchanging goods.

    In other words, capital is subjective. What I've accumulated is only worth what you value it, and how you value it has no impact on how the next person values it.

    Note specifically that money is merely a form of capital and not the only form.

  • anon||

    Oh, furthermore, on topic, it's impossible for the government to generate capital. It can only seize that capital from those in its domain and redistribute said capital as IT see's fit. A valid use of that seized capital is to prevent fraud and coercion in a free market society. An invalid use is to seize capital from the wealthy just to redistribute it to the lazy.

  • JohnD||

    It's not the role of government to create wealth. We may benefit from some (very little) Government action, but that's not the same thing.

  • ||

    Oh come on, it's quite clear that government can create jobs. Look how many government jobs have been created during the last 40 years. We've hired bureacrates, and police and firefights, and more bureactrates !

    More seriously if many of our other competitors such as China are supporting certain industries, will we have to do so as well to remain competitive?

    And if there is a failure on occasion (which there will be) well isn't that the price of progress? At least they allowed Solyndra to fail, unlike the supposedly private banks.

  • ||

    More seriously if many of our other competitors such as China are supporting certain industries, will we have to do so as well to remain competitive?

    No. You remain competitive by investing smart. Governments are prone to provide support based on political connections which could hardly be classified as smart.

  • ||

    More seriously if many of our other competitors such as China are supporting certain industries, will we have to do so as well to remain competitive?

    No.

    While it should bring ethical qualms to get richer off the backs of poorer Chinese consumers and taxpayers who in the end are subsidizing American consumption, the US certainly shouldn't try to replicate the stupidity of what China is doing.

    American companies and consumers should take advantage of the lower prices the US gets due to China's subsidies until those subsidized industries move to even lower priced locations like Vietnam, and then buy from the new suppliers.

    After all, if there were a magical widget factory in the middle of the Pacific Ocean where US distributors could send empty ships and have them return full of products, do you think the government should subsidize the industries hurt by competition from these free products?

    Of course not.

  • Almanian||

    I like to benefit from other countries' "support" for certain industries. Let them eat the inefficiencies, and I'll just take the benefits.

    For my own gov't, keep the mother FUCK out of it, and let the market work.

    Too bad my betters have other ideas :(

  • Old Salt||

    "Betters"?

    Do you by chance mean Einstein or perhaps Gandhi? That's the type of person I'd have to be talking about in order to consider them my "better".

    I will never consider a sociopath who managed to lie to enough people to get political power to be my "better"!

  • Zeb||

    Adjust your sarcasm detector.

  • Old Salt||

    Give me some leeway here; I've downed six bottles of Sailor Jerry since Friday!

  • J to the R||

    Jesus, you really are a salty fucker to drink that drain cleaner and live!

  • sevo||

    "More seriously if many of our other competitors such as China are supporting certain industries, will we have to do so as well to remain competitive?"

    Are you *really* suggesting we try to catch up in the 'throw money down rat hole' competition.
    You sort of beg the question, presuming China's subsidies will accomplish anything.

  • ||

    Of course for people in America to buy that shit we have to have jobs as well. And if we don't want them to own America then we will need to export roughly as much as we import.

    Go back again and look at Ricardo's theories. For trade to actually work there has to be buying and selling from both countries. As in I am TRADING you X for Y. Not just we will buy X and Y from you.

    And the global imbalances that have been created by this flawed understanding of economics is one of the chief causes of our economic crises.

  • sevo||

    "And the global imbalances that have been created by this flawed understanding of economics is one of the chief causes of our economic crises."

    First, there are no "imbalances". "Trade balance" refers only to commercial goods. The Chinese are *not* sending stuff over here for nothing; they're getting paid.
    Currently, the thing they're buying is US paper rather than a commercial product, but that's irrelevant to the fact that there is no "imbalance". They buy that good, which we monetarize and use to buy their products.
    All of which ignores the fact that you still haven't shown Chinese subsidies to be worth emulating.

  • pmains||

    What you're encountering is typical economics-denier fare. In this view, Comparative Advantage is merely a theory to be accepted or rejected based on current experience. Notice that Kroneborge falsely attributes comparative advantage to David Ricardo. Adam Smith spoke about Comparative Advantage without coining the term, but he's the father of economics. If you admit that he spoke about it, then it is more difficult to deny that comparative advantage is baked into all coherent economic theory. The illusion is created that a legitimate debate exists over Comparative Advantage.

    The idea, of course, is that government needs to intervene in order for Ricardo's "theories" (theorems is probably a more accurate description, given the praxeological nature of economics) work. Of course, that's statist nonsense, but it's getting to be downright dull.

  • ||

    That paper represents future claims to goods and services. If we aren't making those goods and services then there's a problem.

    Let's look at it another way. If there's no free market, how are American goods and services expected to compete?

    Of course just because China is doing something doesn't mean we should do it. But on the other hand, that doesn't mean we can't ever do anything either.

  • sevo||

    "That paper represents future claims to goods and services. If we aren't making those goods and services then there's a problem."

    Yes, and? What was your point?

  • pmains||

    You are asserting that "we" (meaning our government) should intervene in the economy. The problem is that central planning is counter-productive. I suppose "we" could try to buy up Chinese paper faster than the Chinese are buying up American paper, but that hardly seems like a good use of resources. "We" may be able to tip the "balance" back toward our side of the ledger, but it will come at a cost. We will lose, but the Chinese will lose even more. So, in a perverse way, we "win."

    The empirical evidence bears this out. Our trade deficit with China dropped following the last big recession. In fact, this is part of a consistent trend over the past century. Every time we hit a recession, our trade balance "improves" (i.e., our trade surplus increases or our trade deficit decreases).

    Yes, I realize that the Chinese government is constantly manipulating their economy. So did the Soviets. Just because the Chinese don't have a free system doesn't mean that we will be unable to compete. Free market economies are stronger than command and control economies. China has seen growth precisely because they have been shedding command and control policies, albeit not as fast as they should.

  • ||

    There are many things that can be done besides creating a top down control for every thing.

    For example, moving from our current tax system to the Fair Tax would help out domestic goods a lot. No longer would our goods have an emeded cost componenet that foriegn goods wouldn't.

    Also, I really don't think that providing funding for research or loans = command and control economy.

    Do the SBA really equal the end of capitalism? And no Solyndra doesn't either.

  • pmains||

    It's possible that a consumption tax would be better than the current income tax. Nevertheless, our trade deficit is financed by our borrowing and our status as the world's reserve currency. Other states use our currency implicitly or explicitly to back their currencies, which means that we're able to give people paper in exchange for actual, valuable goods. Changing our tax code won't change that reality.

    Funding scientific research or college loans is not a complete government takeover of the economy, but it amounts to central planning. Therefore, history tells us that such actions are likely to be counter-productive. The government is picking winners and losers, which merely moves capital from one more productive sector of the economy to another less productive sector.

  • Tony||

    It's government's job to spend money in the economy to accomplish the task of governing. It will always be a customer, and whether you like what it's doing or not it still provides legitimate demand. Capitalism is a tool to efficiently allocate resources yes, but as animals with large brains we are able to determine if that efficiency is happening. At times the market fails to do this, sometimes spectacularly. And we don't need it to signal to us whether things like education and science are productive. Sometimes humans (via dreaded central planning) can decide for themselves what they value, with no help from the market fairy.

    I'm not sure what history you're referring to but it sounds like one that highlights all the failures of planning and completely ignores its successes, as if all of the smoothly functioning aspects of modern society that government helps facilitate just don't count for some reason.

  • sevo||

    "At times the market fails to do this, sometimes spectacularly"

    Shithead posits without evidence. Again.

  • marlok||

    "It's government's job to spend money in the economy to accomplish the task of governing."

    This is a masterpiece of circular reasoning.

  • ||

    "Sometimes humans (via dreaded central planning) can decide for themselves what they value.."

    The contradiction is so obvious I want to cry.

  • ||

    No, we weighed the successes and failures and found them wanting.
    How many people will the government have to save to make up for all killed at its behest?
    How much money must it save all people in the US in property damage (via policing) to make up for the money taken to provide the service, obviously overpriced, and to make up for the wealth destruction and waste inherent in prosecuting for victim-less crimes?
    We have seen successes and failures of government in history, it is just that anyone smart enough to do an honest cost/benefit finds solidly against government.
    We don't need to examine our history, you need to examine your conditioning.

  • ||

  • Chris||

    Yes, China's leader over a few dozen centuries have planned decades, even centuries in advance, and for this, the Chinese have suffered mightily from this stagnant mindset put into action.

    It is only recently since the late 70's when the Chinese, after the disaster of the Dynasty of Mao forced market changes from the bottom up (Goddamn you to Hell Tom Friedman for propagandizing a lie consisting of an opposite claim) that they have known anything close to mass prosperity.

  • Paul||

    More seriously if many of our other competitors such as China are supporting certain industries, will we have to do so as well to remain competitive?

    No. It will be precisely our lack of government support that will keep up competitive. Otherwise you end up England in the 70s.

  • ||

    "The government scooped up hundreds of billions from taxpayers, spent most of it on government salaries, pensions, and building, then redistributed some of what was left over it in the name of creating jobs..."

    Fixed it.

  • ||

    7,140 jobs, at a cost of about $1 million each.

    Don't you comprehend Public Finance, Matt? More is better. Next time, we'll spend ten million dollars per job created, because any time you grow your budget, you win.

  • Almanian||

    *sigh*

    Multiplier. Effect.

    DUH!

  • Tman||

    Look no further than the recent invention of the employment metric, "Jobs created and/or saved".

    This was created to not only attempt to show how jobs had been "created" under Obama, but more importantly since they were afraid (and rightly so as it turns out) that their programs would not "create" jobs nor the conditions for them to get created, they would need an additional metric to show that they had some success. By bailing out the states who couldn't pay all of their State employees because they ran out of money paying Union pensions, Obama could claim to have "saved" jobs.

    It's the WORST new political metric ever created, hands down.

  • Mike M.||

    But, but, roads! Roooooaaaads!!!

  • Zombie Biden||

    No, no, you fool! Trains! TRAAAAAAIIIIIINNNNNNNSSSSSS -- !!!

  • Jill Valentine||

    SHOOT IT IN THE HEAD!

    KILL IT WITH FIRE!

    SEND IT TO HELL WHERE IT BELONGS!

  • ||

    Does the electricty being generated by the Hoover dam etc really have no value?

    Ooh, Boulder Dam; you've run rings around me.

    I suppose you've heard the term, "misallocation of resources". What other possible uses might the men and materials have been put to?

    What would the Nevada desert look like without that dam? I do not object to Las Vegas on moral grounds; people may do as they wish. However, I'm not convinced that was the most efficient use of resources. Las Vegas would still be a little crossroad without the "free" water and electricity.

  • JoJo Zeke||

    I do not object to Las Vegas on moral grounds; people may do as they wish. However, I'm not convinced that was the most efficient use of resources.

    ... but... but... where else would we be able to go and see Buddy Hackett do stand-up...?!?

  • pmains||

    Branson, Missouri or the Catskills. Next question.

  • Lord Humungus||

    btw, the Hoover dam was built by private companies (on the government dime).

    http://en.wikipedia.org/wiki/Six_Companies,_Inc.

  • ||

    Yes those men and resources could have been put to other use, although it's doubtful they would have been in the great depression.

    Either way, I'm sure if you used capital budgeting techniques you probably would have got a no go decision with any realistic discount rate. And yet, it and projects like it overall have probably been a net benefit.

    I think if you strickly use capital budgeting techniques you will never get those big long lasting projects.

    Also, what does it matter if private contractors built it, it was still on the governments dime.

    It wouldn't have happened without government.

    I guess for me the idea that occasionaly people will decide that something is important enough to do that's it's worth the government doing it is ok. Note this doesn't mean the government should do everything or even most things.

    But yes some things are ok.

  • ||

    Yes those men and resources could have been put to other use, although it's doubtful they would have been in the great depression.

    Either way, I'm sure if you used capital budgeting techniques you probably would have got a no go decision with any realistic discount rate. And yet, it and projects like it overall have probably been a net benefit.

    I think if you strickly use capital budgeting techniques you will never get those big long lasting projects.

    Also, what does it matter if private contractors built it, it was still on the governments dime.

    It wouldn't have happened without government.

    I guess for me the idea that occasionaly people will decide that something is important enough to do that's it's worth the government doing it is ok. Note this doesn't mean the government should do everything or even most things.

    But yes some things are ok.

  • ||

    I'm being nitpicky, but...

    Las Vegas gets almost none of the Hoover Dam Power. Because it was such a small town when the dam was being built, all the power was committed to Los Angeles. Transmission lines were built to bring the power down to LA the same time the dam was built and that is where most of it still goes.

    Vegas gets most of it's power from coal-fired plants outside the city.

  • ||

    Does it really matter where the power goes? The power still has value. A value that capital budgeting techniques says basically doens't exisit.

  • Red Rocks Rockin||

    At the same time, Hoover Dam would likely have never been built, if the current crop of liberals running the Democrats had been in charge back then.

    That's what's so irritating about Obama's mewling over the need to fix our infrastructure--all those roads, bridges, and even a great deal of the public works/community buildings would likely have not been constructed because they violate the greenies' "wild and scenic," "open space," "wetlands" fetish. You'd think if they had any consistency at all, they'd be calling for the government to spend money tearing everything down and leaving it for nature to reclaim.

  • Overt||

    Kroneborge-

    Most people would not have gone for the Dam, because there are numerous alternatives out there. Coal fired plants, Nukes, Natural Gas, etc could have all performed these tasks without building a giant dam.

    When the government makes these decisions, it is easy to say that it "paid off" in the long term if you ignore opportunity cost- that is, whatever would have been built with dollars and labor had the government not done this.

  • ||

    @ RRR
    Agreed, I would have been much more likely to support the stimulus if it had all went to actually building shit. Then at the end of the day you would at least have something. And the people that are paying for the debt would at least be getting some benefit from the infrastructre.

    @ Overt,

    Agreed you need to take opportunity costs into account (which if you're doing capital budgeting correctly you do). But with any realistic discount rate it basically means that anything past 30 years out doesn't count for shit.

    And yet, how many of us actually don't care what type of world we leave our kids and grand kids.

    I think capital budgeting is great for private projects, and should be used as a tool for public ones. But I think there's a place for longer term projects too.

  • sevo||

    "I think capital budgeting is great for private projects, and should be used as a tool for public ones. But I think there's a place for longer term projects too."

    Yes you claim so, and you have yet to show an example.

  • ||

    Kroneborge - My point is that the free power from the Hoover Dam didn't build Las Vegas. Gambling Prohibitions in other states did.

  • cynical||

    "Las Vegas gets almost none of the Hoover Dam Power. Because it was such a small town when the dam was being built, all the power was committed to Los Angeles."

    Not by the time I got done with those fucking NCR statists.

  • ||

    At least they allowed Solyndra to fail, unlike the supposedly private banks.

    Did they, really? Or did they bail out private investors by throwing good money after bad?

    I anxiously await the reports detailing who snaps up Solyndra's assets for pennies on the dollar.

  • ||

    the US certainly shouldn't try to replicate the stupidity of what China is doing.

    Whatever you do, don't check the news.

  • ||

    "We invested…in clean energy because not only would this spur hiring by businesses but it creates jobs in sectors with incredible potential to propel our economy for years, for decades to come."

    ______________________

    Wow, the government can identify sectors and comapnies that will propel the economy for years to come? The Treasury's early-stage investments in Coke, Microsoft, Apple, Wal-Mart, and other major companies must be worth fortunes by now. After all, without government investment, these companies could never have been funded.

  • Almanian||

    The people who need to read this won't. Therefore, we need to make a law to FORCE people who need to read this to read it.

    Oh, wait...

  • ||

    we need to make a law to FORCE people who need to read this to read it.

    Pish.

    The government should hire thousands of people to read it out loud on streetcorners.

    Stimulus, mutherfokker!

  • Paul||

    While riding trains which are high speed and run on time.

  • Beeblehead||

    So what do I tell all my liberal "friends" who insist that Roosevelt created all those jobs with the WPA during the Great Depression? And look at all the nice bridges and dams and post offices we got in return. And I'm not trying to be facetious here. This is the defense that gets universally trotted out.

  • ||

    And let's not forget the rural electrification act.

  • ||

    You could counter with the fact that once said project was finished, the people were just as unemployed as they were before hand. And also that it wasn't the New Deal that pulled us out of the depression, it was the fact that all of our economic competitors were bombed all to hell so we were the only manufacturing game on the planet.

    Then look at them funny and say: I didn't know you were such a warmonger.

  • sevo||

    "So what do I tell all my liberal "friends" who insist that Roosevelt created all those jobs with the WPA during the Great Depression? And look at all the nice bridges and dams and post offices we got in return."

    Not all of the money was totally wasted, since (some) bridges and roads can be a social benefit, but those post offices? So what?
    What we *really* got in return was a continuation of the Great Depression.

  • Chris||

    You tell them that was small potatoes compared to the build up of turnpikes through private means throughout the century before the roadways were essentially nationalized. It would not have been possible for the government to direct resources to where it wanted them to go without the wealth accumulated through private capital through this initial enterprise.

    You tell them that if anything they are providing an argument for why we need to privatize all roads and schools so they no longer have an ahistoric excuse to keep that gun to our heads.

  • Some Guy||

    So what do I tell all my liberal "friends" who insist that Roosevelt created all those jobs with the WPA during the Great Depression?

    Tell them about all the jobs he prevented with absurd regulations against employment. This isn't hyperbole like the "job killing blah blah bah" that we have now, he literally made laws to prevent people from working. Check out the (eerily familiar sounding) National Industrial Recovery Act.

    And look at all the nice bridges and dams and post offices we got in return

    If you pay 5X market value from something, don't brag about it.

  • Red Rocks Rockin||

    Ask them if they'd be willing to work for the same wages the WPA and CCC workers got: $30-40 a month, or about $500-$650 in inflation-adjusted terms, with the CCC workers sending about 83% of that home to their families and living in military barracks at the project sites.

    It's pretty simple--they think these programs are so great because they think someone else would do all that manual labor. I doubt any of your pampered liberal friends would be willing to make that kind of sacrifice.

  • ||

    Government can't create jobs?

    I think Bush II did a bang-up job of creating jobs - in the military, in the defense (offense) industry and the 'security' industry.

  • ||

    +1

  • Paul||

    I'm surprised no one mentioned Hillary's plan to nationalize the Airline Security industry. The TSA, anyone?

  • ||

    When you have to borrow money to create a good that will never create a return on investment, you are just deferring the unemployment to a later date, you are not creating jobs.

  • ||

    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.

    India says the wood is fine. Gibson is being punished because it has a non-union workforce and the CEO supports the wrong party.

  • ||

    Total slap down! I don't generally enjoy bad news this much.

  • rather||

    Since the government created ARPA, essentially it fathered technology jobs form the internet to Apple

  • sevo||

    "Since the government created ARPA, essentially it fathered technology jobs form the internet to Apple"

    What you mean is ARPAnet, and you're also wrong about your presumed result.
    Fail and fail.

  • rather||

    It was 1957 when the then Soviet Union launched Sputnik, the first man-made satellite. Americans were shocked by the news. The Cold War was at its peak, and the United States and the Soviet Union considered each other enemies. If the Soviet Union could launch a satellite into space, it was possible it could launch a missile at North America.

    President Dwight D. Eisenhower created the Advanced Research Projects Agency (ARPA) in 1958 as a direct response to Sputnik's launch. ARPA's purpose was to give the United States a technological edge over other countries. One important part of ARPA's mission was computer science.

    In the 1950s, computers were enormous devices that filled entire rooms. They had a fraction of the power and processing ability you can find in a modern PC. Many computers could only read magnetic tape or punch cards, and there was no way to network computers together.

    ARPA aimed to change that. It enlisted the help of the company Bolt, Beranek and Newman (BBN) to create a computer network. The network had to connect four computers running on four different operating systems. They called the network ARPANET.
  • ||

    The implication is that if it wasn’t for the government we wouldn’t have networking and by extension the Internet is utter nonsense.

  • ||

    I give all the credit for calculus to Isaac Newton Sr.

  • Barry Loberfeld||

    I trust no one will be too shocked that Mother Jones has taken the opposite position.

  • PantsFan||

    I am not clicking that

  • Chris||

    Don't blame you. Mother Jones is infamous for her nasty taint.

  • Paul||

    Without clicking on it, the only summary argument that MoJo can be taking is, "But for the stimulus, we'd all be dead".

  • Some Guy||

    If "creating jobs" is the stated reason for doing something, that pretty much means that no other justification could have been made for doing it. It also guarantees that in aggregate it will lead to less jobs.

  • Chris||

    WTF?

    http://www.ajc.com/news/nation.....97664.html

    Obama's attempts at compromise with the GOP on the debt ceiling and budget won him little in the way of policy, instead engendering frustration from Democrats who saw him as caving to Republican demands.

    The new, combative Obama isn't looking for compromise. He's looking for a win. And if he can't get the legislative victory he says he wants, he has made clear that he's more than willing to take a political win.

    How is two trillion dollars more of free shit at the tax payers expense for his public service union base spinned into being a compromise unpopular with that base?

  • ||

    I've been alive forever,
    And I made the very first job.
    I put the serfs and the employers together.
    I am gov'ment,
    And I make the jobs.

  • Not a troll just curious||

    What about things like space exploration where there's no evident way to make a profit initially and innovation is spurred by military motives?

  • ||

    We could've done space exploration privately and done a much better job, particularly in providing a sustained and sustainable presence in space. The fact that the government and the military claimed space as their own domain had a lot to do with the fact that we've been mostly piddling about in LEO for decades now.

    New Space companies like SpaceX can do this without government help. I think the government will remain an important consumer of manned spaceflight, but not the only one.

  • rather||

    "We could've done"...lol

  • Robert Goddard||

    Me and Danny Guggenheim were certainly trying.

  • Overt||

    Most libertarians have a good reason not to have many (if any) government funded programs, including space.

    However, even if you aren't full-hog Libertarian, you should be able to draw the line between "Government Funding" and "Government Owned and Operated". Even if you accept that there is a limited role for the government in space, that should not necessarily mean "Government ought to run all space exploration efforts".

    I think there is ample evidence to make the case that NASA's virtual monopoly on heavy lifting (secured by government mandates and government subsidies) made it very difficult for private Enterprise (har har) to enter the field. They just couldn't compete when the government (largest customer) refused to use anything other than the Shuttle and they never passed the full cost of shuttle launches to the customer.

    Contrast the US Government's support of a glorified space-trucking business (the Shuttle Program) with (for example) its support of R&D in Universities (Private and Public) and I think you'll see plenty of room for improvement without abolishing space programs all together.

  • sevo||

    Not a troll just curious|10.10.11 @ 2:51PM|#
    "What about things like space exploration where there's no evident way to make a profit initially and innovation is spurred by military motives?"

    Most folks, when they spend money, make choices balancing costs and returns.
    You can make a case that we got 'returns' in knowledge of the universe (or at least the solar system), but that's single-entry bookkeeping.
    Can you justify the gains for the costs, including the opportunity costs?

  • ||

    If you studied the beginnings of rocket design, you wouldn't even be asking the question, because you would know it was all done by private hobbyists.
    Yes major funding was soon after provided for military reasons, but that doesn't mean the money was spent wisely or military money would be the only possible source of funding.
    You have to prove that a person with the will, ability, and motive would not have chased his dream without military money (Von Braun). You can't possibly prove any such thing.
    What you now have to do is prove, in light of actual historical fact otherwise, that military motives *is* the only reasons rockets would have been developed.
    Since space orbit is used for reasons other then military, you have already lost that argument.
    Most of these "arguments" like space travel, are only presented by people that have never bothered to look into the actual history of space travel.
    Do you really believe there was no such thing as roads until government laid claim to some land and built one?
    Look that one up too, because it isn't so.

  • ||

    Keynesian stimulation is based on a fallacy. Unless a government has accumulated wealth during good times, it is impotent to stimulate growth in bad times. Any increase in demand because of spending is offset by the loss of demand caused by raising the money to spend.

    To compound the problem, government is notorious for throwing money at unproductive areas of the economy and taxing productive areas. The stupidest use of available wealth is to give it to the government to spend.

  • ||

    ^this^
    science has its "Black Hole"
    gub'mint has its "Brown Hole" ie toilet hole, for all you race-0-phobes...

  • ||

    We could've done space exploration privately and done a much better job

    But I read The Right Stuff, and according to Wolfe, only Army test pilots could be used because they were cheaper than monkeys; those private guys wanted to actually get paid, and stuff.

    FCTPWND

  • Robot Chicken||

    Monkeys in outer space!
    Defending the freedom of the human race!

  • ||

    And another thing; only the government could have come up with the idea of 97% disposable vehicles.

    Private companies would have spent all their time trying to figure out how to re-use their equipment, so their stingy bastard shareholders wouldn't bitch and moan about the cost.

  • Vivian Bennett||

    So.. What do we do about it?

    Vote conservative 2012...for WH and for Congress. Think "green" Recycle Congress!

  • Old Salt||

    I'd rather just leave a SADM in the trunk of a car next to the Capitol during the next State of the Union...

  • sevo||

    "Vote conservative"
    Please define.

  • ||

    Is anyone aware that this administration, in it's zeal to PROVE they are creating "green" jobs, is including, in their green job accounting, heavy equipment operators who were using gasoline powered equipment and are now using diesel powered heavy equipment? So that means that just stepping onto equipment using diesel instead of gasoline equates to creating a green job.

    Awesome in their arrogance and belief that the American public are as gullible as they think we are.

    Run him and his whole lot out of town and stick them all on some desert island. See how he likes being isolated and all alone, just like he's making us feel now.

  • ||

    It seems that the government is very good at creating jobs in the defense industry. Doesn't that put the lie to Matt Welch and others' repeated assertions that government doesn't create jobs?

  • sevo||

    TycheSD|10.10.11 @ 5:33PM|#
    "It seems that the government is very good at creating jobs in the defense industry. Doesn't that put the lie to Matt Welch and others' repeated assertions that government doesn't create jobs?"

    No, it doesn't. Research 'broken window fallacy'.

  • Perpetually Disillusioned||

    "The general idea of using government spending to stimulate aggregate demand, particularly during economic down times, ruled official Washington for a solid decade..."

    Let's not confuse "job creation," generally, with spending to increase demand. The latter is a means to an end, which has proven a failure time and time again. But creating jobs is not so challenging.

    Of course, creating government jobs is easy. But job creation in the private sector is equally easy. The government has a carrot (taxes) and a stick (tariffs), either of which can be effective on a standalone basis and each of which can magnify the the other. That the government has been generally unwilling to use these tools does not make them ineffective or somehow vile. Rather, key contributors to our politicians have found it easier to maximize their profits by looking overseas, resulting in the carrot's irrelevance and the stick's impotence in the hands of our political leaders.

    For example, consider the discussion of China in the comments above. China is not a free market, as best I can tell. Yet we choose to compete with China head-on in terms of unskilled labor. Don't get me wrong, I love the THEORETICAL ideal of a global free market economy, and a post-industrial US economy, where we have perfected the 100% service-based economy. But, back in reality, there is no and we are powerless to create any global free market economy (see present day China). And, without manufacturing jobs, the middle class dies (see present day US). Unfortunately, it is very difficult to imagine our political leaders doing anything but pandering to key donors and, in doing so, destroying our best economic assets: American work ethic and spending power.

  • Overt||

    "And, without manufacturing jobs, the middle class dies (see present day US)."

    This doesn't make sense to me. At all.

    Salesmen
    Insurance dudes
    Realtors
    Executive Assistants
    Teachers
    Police
    Firemen
    etc

    These are all "Service" jobs that will earn you a fair middle-class job, if not better. Why do we need manufacturing to support them?

  • Perpetually Disillusioned||

    "These are all "Service" jobs that will earn you a fair middle-class job, if not better. Why do we need manufacturing to support them?"

    I did not mean to suggest that no service jobs earn a middle-class wage. Of course many can, if not more. But you have it backwards -- those with service jobs do the supporting, not the other way around. In any event, there are only so many service jobs to go around, and only so many people capable of doing them well. As we've given away our manufacturing jobs, it's not as if they've been replaced by service jobs. There was a time we had a team of people building washing machines, and a team of people selling them. Then we stopped building washing machines here, but that does not mean we need more salesman. The politicians then emphasize we should "retrain" our workforce. This not only misses that service jobs were already staffed prior to our giving away manufacturing, but also overstates abilities: half the population has an IQ under 100.

  • sevo||

    "those with service jobs do the supporting, not the other way around."
    Assertion lacking evidence.

    "In any event, there are only so many service jobs to go around, and only so many people capable of doing them well."
    Yes, just like, oh, being a plumber, right?
    Try again, with something like intelligence.

  • Perpetually Disillusioned||

    Service jobs support people and/or things. That is why they are called "service" jobs. This is a definitional issue, and I'm not sure what evidence you seek.

    If you would like some examples, let's start with your plumber. Before you hire him to maintain your plumbing, the plumbing has to be manufactured and your house has to be built. Your plumber maintains and supports a range of manufactured products, and the his job is contingent on your purchase of them. The IT support person you call when your computer fails is dedicated to supporting the manufactured product (the computer). And, hiring ten thousand washing machine salesmen will have at best limited effect on washing machine production.

    Relatedly, this is the conceptual failing with respect to the liberal "create more government jobs" strategy. The liberals would hire government employees as a method of supporting neighborhood stores. This is backwards. To the extent government intrusion is appropriate, the right move is to bolster neighborhood stores directly and let the resulting economic and population growth drive the hiring of more cops. The liberal view, taken to its logical end, is the "bridge to nowhere."

    Returning to your plumber example, yes, there are only so many jobs for plumbers. My phonebook shows no shortage and, considering the state of the construction industry, I'd imagine the market is flooded. This is not an industry I would want to enter into today. And, yes, only so many people can be effective plumbers. Ignoring the barriers to entry for a moment, on the theory that a loan would be available to anyone with a good business idea, plenty of people simply do not have the mechanical aptitude and/or personal qualities required to be an effective plumber.

  • ||

    Listen moron.
    If you voted for chicago jesus in 2008, you have zero(zero) right to commment on anything political. Fu*ck offf btitch

  • tadcf||

    But the only option in the conservative camp is to recall all regulation of business (except those which Republicans agree with), lowering wages to an absolute minimum to ensure higher and higher profits, create a situation of high domestic unemployment by outsourcing jobs over-seas, and letting people die on the streets because they can't make enough money to feed and clothe their families or afford health care--and rationalize the situation as God's will.

  • ||

    So without the minimum wage people would be dying in the streets?

    Citation Needed.

  • Gemstone Jewelry||

  • ||

    I believe you have now introduced everyone to the red herring, slippery slope, and straw man attacks all in one short paragraph.
    Now, if you know anything about logical debate, that means nothing you said was at all valid. Sounded to me like a lot of partisan rhetoric to be honest.
    I follow both major political parties with equal contempt, and I have not seen those as "the only options" for Republicans.
    I could equally see that the Democrats solution of trying to rebuild the failed soviet system in the US, using class warfare and racism, as well as printing limitless paper money as not a workable plan either.
    So, I guess Republicans and Democrats are out of luck. Good thing there is still anarchism, eh?
    Hack.

  • sevo||

    tadcf|10.11.11 @ 9:11AM|#
    ..."lowering wages to an absolute minimum to ensure higher and higher profits,..."

    Hey, ignoramus! Ever hear of the market clearing price? Or do you just arbitrarily add twenty bucks to the bill at the grocery store since you're such a 'feeling' ignoramus.
    Hint: No successful employer pays one penny more than is required to accomplish the job.
    And in your case, well, you're fired.

  • Aimeng||

  • Stan Valchek||

    Would you admit that in the rare circumstances of a balance sheet recession government deficit spending can increase aggregate demand, or are you still denying that aggregate demand exists?

  • ||

    How much did AD go up after the trillions spent in bailing out the banks?

    Does AD go up every year when a bigger budget then the last year is passed, greater then the increase in inflation?

    You have to show that government spending has driven AD in the past to posit whether it has an effect in the future.

    I have looked through enough history to see fiat money dumped into market after market and not raise AD, so the onus to prove it does is on you.

  • ||

    "'created or retained' a pathetic 7,140 jobs, at a cost of about $1 million each. "

    Bear in mind that these "recovery" jobs are supposed to produce added value. If you took a road construction project's cost and divided by the number of workers, yielding a result of $200,000 for each job, you wouldn't say "OMG, they're paying road workers $200K--the government is so broken, etc." You'd realize that you're getting employment plus roads for that $200,000. Then you'd go through and do other calculations to determine if that number was a fair number or not.

    I'm not saying the state should be doing any of this.* I'm just asking that you please not skew statistics (even by omission) to suit an agenda--I get enough of that from team purple.

    * And I'm not even vaguely suggesting that the million dollars per job is producing anything worth close to that value. In Solyndra's case, it's probably close to zero.

  • دردشة زين العراق||

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