VOS: The Jobs-Creation Scam: Redistribution of Wealth

A recent Time cover displayed a mockup of Barack Obama decked out to look like FDR. And if you caught the special about FDR that The History Channel did about a week ago, you can understand why. BHO, a master at recycling old, tried-and-failed ideas — ideas that have never enhanced either prosperity or freedom anywhere in the world — clearly intends to be the chocolate version of our thirty-second president.

Like FDR, BHO has the arrogance to use your money to “create” a job for someone else. The fact that creating jobs is not a Constitutional function of government doesn’t seem to bother BHO anymore than it did FDR. And, just as FDR’s intervention in the economy kept the U.S. in a depression seven or eight years longer than was necessary, BHO’s shenanigans are virtually certain to have the same effect.

As always, the rationale of socialists sounds compassionate: Government has a duty to help unemployed citizens by “creating jobs.” As Barney Frank angrily (and rhetorically) asked in a recent interview on 60 Minutes, “What do you expect people to do, starve?”

Clever way of changing the subject — the moral and legal fact of life is that the government has no duty or obligation to create any job for anyone. So-called government job creation is, in fact, nothing more than a form of redistribution of wealth. Why? Because the money used to pay for government-created jobs comes from wealth producers in the private sector.

Worse, the jobs created by government are ones for which there is no market demand. As a result of the taxes that fund these jobs (without getting into the problems caused by inflating the money supply or borrowing), businesses have less money to employ people in private industry. Thus, the net effect is that there is no reduction in unemployment. This is just another example of how government intervention causes one person to gain at the expense of another.

On the surface, this may sound like a zero exchange, but it’s not. The job that is lost in the private sector is in a business that creates a product or service that is in demand, while the government created job provides a product or service that many or most taxpayers do not want. If they wanted it, rest assured there would be more than enough entrepreneurs and companies providing it.

In addition, because of the bureaucratic waste common to all government programs, it takes more dollars to pay an employee to do an equivalent amount of work as an employee in private industry. (Scary thought when you realize that the government may ultimately end up owning the already money-losing auto companies.)

Finally, the taxpayers who no longer have the money that was used to create the unneeded government jobs have less to spend on products and services that they desire. Thus, production is slowed and unemployment in private industry is actually increased.

Milton Friedman, in exposing the old political trick of holding out the short term benefits for all to see while hiding the long term results behind one’s back, described “the visible vs. the invisible effects of government measures” as follows:

“People hired by government know who is their benefactor. People who lose their jobs or fail to get them because of the government program do not know that that is the source of their problem. The good effects are visible. The bad effects are invisible. The good effects generate votes. The bad effects generate discontent, which is as likely to be directed at private business as at the government.” (At the risk of being presumptuous, I would suggest that the discontent is almost always aimed more at business than at government.)

Government’s whole approach to unemployment is upside-down. To improve the well being of people, the emphasis should be on full production, not full employment. You move toward full production as you produce more goods and services that people want.

If full employment were the horse instead of the cart, government could just put unemployed people to work building pyramids in the Mojave Desert. After a few years, it could have them tear down those pyramids, then start all over again. Obviously, nothing would be accomplished, but we would have full employment.

The point is that merely creating jobs does not produce wealth. An economy will fail if people are employed in jobs that do not produce goods and services that the public wants to buy — on a voluntary basis. The old Soviet Union had full employment, but the people had no wealth. Worse, they had no freedom.

Is full employment possible in a free market? Theoretically, yes — but only if government stayed completely out of the marketplace, which it never has done. While full employment may not be possible other than in theory, one thing is certain: The closer you get to full production, the closer you get to full employment.

From my standpoint, however, there is an even more important point to be made here: Even if the economic realities of government’s attempt at redistribution of wealth by meddling in unemployment were not harmful to the economy, no one has a “right” to a job. No one has a “right” to a “decent living.” No one has a “right” to a home, a car, or a TV set. On the other hand, everyone has a natural right to pursue all of these things by dealing with others on a consensual basis.

Those who proclaim that someone has a right to a job really are saying that certain other people do not have human rights — i.e., that an unemployed person has a right to use government to force others to satisfy his desires.

While it is true that government can, through the use of force, guarantee someone a job, by doing so it leads such a person to believe that his needs and desires are superior to the liberty of others. But there is a price tag for everything. When government removes from that person the burden of having to sell his services for what they are worth in a free market, the very least he can expect to pay in return is a loss of freedom.

Remember this as Team BHO rolls out its FDR-style freebies programs that are sure to prolong the depression and lead to a greater loss of your freedom – and, in a worst-case scenario, all of our freedom.