Obama's Job Fetish

Why the government shouldn't view "creating jobs" as an end in itself

If, as widely expected, Barack Obama faces a recession when he takes office in January, many Americans will expect him to deliver on his promise to "create jobs." They probably will be disappointed, because Obama seems to view job creation not only as something the government does with taxpayers' money but as an end in itself. That's a recipe for wasteful spending that will divert resources from more productive uses, and ultimately for higher unemployment than would otherwise occur.

Obama says he will "transform the challenge of global climate change into an opportunity to create 5 million new green jobs," which he likens to the economic activity triggered by the personal computer. This rosy way of looking at global warming is a variation on the "broken window" fallacy dissected by the classical liberal economist Frederic Bastiat, according to which the loss caused by smashing a window is offset by the employment it gives the glazier.

By the same logic, Obama should view war, crime, and hurricanes as opportunities to create jobs. While all three generate economic activity, we'd be better off if the resources spent on bombs, burglar alarms, and reconstruction work were available for other purposes, instead of being used to inflict, prevent, or recover from losses.

Likewise, overhauling manufacturing, transportation, and power production to reduce the emission of carbon dioxide may or may not be justified, but the cost of doing so is properly viewed as a drag on the economy, not a boost to it. At the risk of stating the obvious, we'd be better off if we didn't have to worry about, and use resources to minimize, climate change.

Obama wants to spend $150 billion on "developing and deploying advanced energy technologies, including solar, wind and clean coal." He says this plan "will reduce greenhouse gas emissions, decrease our dependence on foreign oil and create jobs that can't be outsourced."

Leaving aside the desirability of "energy independence" and the merits of Obama's approach to reducing carbon dioxide emissions (which has the government, rather than the market, picking the most efficient methods), the fact that he lists "jobs that can't be outsourced" as a distinct goal is troubling. Paying people to dig holes and fill them in again also creates "jobs that can't be outsourced," but that doesn't mean it's a smart investment or an appropriate use of taxpayers' money.

Speaking of digging holes, Obama also wants to spend $60 billion to "provide financing to transportation infrastructure projects across the nation." He says "these projects will create up to two million new direct and indirect jobs and stimulate approximately $35 billion per year in new economic activity."

Fixing a bridge, widening a highway or building a light rail system may or may not make economic sense. But the fact that it involves paying people to operate jackhammers and pour concrete does not make it any more worthwhile. If creating jobs can justify transportation projects, why not fill the country with bridges to nowhere?

Obama also sees regulation as an engine of economic growth. He says requiring that "25 percent of American electricity be derived from renewable sources by 2025…has the potential to create hundreds of thousands of new jobs." Even if true, that projection tells us nothing about the advisability of such a mandate. If the government required that 25 percent of cars be replaced by horse-drawn carriages, that also would create certain jobs (in buggy whip production, for example), while destroying or forestalling others.

Obama's job fetish is apparent even when he talks about spontaneous economic activity. "Businesses should live up to their responsibilities to create American jobs," he declared in his acceptance speech at the Democratic National Convention. In a free market, businesses exist because they provide goods or services that people value. A business that makes job creation its overriding goal will not be employing anyone for long.

Senior Editor Jacob Sullum ([e-mail]) writes a weekly syndicated column. © Copyright 2008 by Creators Syndicate Inc.