Sunday, October 31, 2010

Can Government Create Jobs?

HARBESON: Not all jobs are created equal

> SOUTHERN INDIANA — I don’t know if you’ve noticed but it’s very fashionable this election season to talk about “job creation.” As a matter of fact, using this phrase is almost as popular as big hair was in the 1980s.

I also noticed the way this message is being conveyed by some candidates really has Morton Marcus, an economist who used to be with IU’s Kelley School of Business, upset. In his latest column he complains that a candidate for state representative has promotional items that say, “it is private business — not government — that creates jobs.”

According to Marcus, “This is stupidity if believed; a lie otherwise. A job is created when a person is hired and paid for his/her work. It does not matter in the grand scheme of things if this person works for the private or public sector.”

Marcus is right. And wrong. He’s right that government can create jobs. As a matter of fact, government is pretty darn good at it. Madonna’s past ability to offend people with her MTV music videos pales in comparison.

We can see that they are actual jobs. We can observe that a government employee gets up and trudges off to a job, just like a person does in the private sector. So the job does exist, at least empirically.

However, Marcus is wrong when he says it does not matter whether a person is working in the private or government sector because, at some point, the worker has to be paid.

How does the government get money to pay people holding government jobs? They have to take it from people doing productive work in the private sector. And when this wealth is forcibly taken to pay for government jobs, it lessens the private sector’s ability to invest in private sector jobs, which are the ones that actually pay for government jobs. Anyone see a problem here?

Of course the government has other tricks that only government is allowed do, such as printing money, or operating in a deficit and deferring the forced payments to a later generation. But in the end, it’s the private sector that pays.

It must be true that the private sector pays for government jobs because if not, then we wouldn’t have a jobs problem at all. The government could just create a job for everyone and we’d all be just fine. So, just like it was an illusion that a person had a thinner waist when wearing outfits with those huge shoulder pads, it’s an illusion that a government job actually moves the economy forward.

Morton Marcus wants us to believe that “in the grand scheme of things it doesn’t matter.” But if we continue to listen to people like him, then at some point “in the grand scheme of things, we’re all going to be broke.” Not to mention morally bankrupt if we keep supporting these schemes.


On a brighter note, how would you like a free book? Really, it’s free! No strings attached. All you have to do is find me at the Community Rally which will be from 11 to 2 Saturday at the Clark County 4-H Fairgrounds.

I have purchased 10 copies of Frederic Bastiat’s “The Law” and will be giving them away to the first 10 people who request one. OK, I guess that means there is one string attached — you do have to risk being seen with me for a few minutes.

But it’ll be worth it. Bastiat’s book is a classic on political philosophy, originally published as a pamphlet in 1850. It’s quite short and very easy to understand. So if you’re interested, look me up on Saturday.

— Sellersburg resident Debbie Harbeson will not be making any fashion statement Saturday because she’s still recovering from that disastrous stirrup pants episode of 1985.

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