Thursday, August 18, 2011

Wherefore Art Thou Jobs?

That ain’t workin’,
That’s the way you do it:
Get your money for nothin’
And your chicks for free.
—Dire Straits, Money for Nothing

Continuing with the “job creation” mantra that’s been burned into his teleprompter screens over the last two weeks, last Thursday President Obama was at Johnson Controls in Michigan touting the magic job-creating benefits of spending federal dollars on developing clean-energy technology.  And in the process he chastised “some in Congress”—read:  the Tea Party—to stop playing politics and “start passing some bills that we all know will help our economy.”  What bills, exactly, Mr. President?  More “stimulus”?

Presumably Obama is now responding to criticism from his far left base that he isn’t spending enough stimulus jack to create enough jobs to save his own come next November.  In an article published July 31 in the Houston Chronicle, New York Times reporter Jackie Calmes lamented—presumably with a straight face—President Obama’s “move[] rightward on budget policy.”  The article explains:

These developments have some progressive members of Congress and liberal groups arguing that by not fighting for more stimulus spending, Obama could be left with an economy still producing so few jobs by Election Day that his re-election could be threatened.

It went on to quote Robert Borosage, co-director of Campaign for America’s Future:

I believe that the voting base of the Democratic Party—young people, single women, African-Americans, Latinos—are going to be so discouraged by this economy and so dismayed unless the president starts to champion a jobs program and take on the Republican Congress that the ability of labor to turn out its vote, the ability of activists to mobilize that vote, is going to be dramatically reduced.

Times columnist Paul Krugman continued the theme last Saturday, arguing (again—does he even have another column in his repertoire?) for more short-term government spending to create jobs, nevermind where that money is supposed to come from or what constitutional authority the federal government has to spend it in that manner.  But the message from the Left is constant:

If you spend it, they will come.

Frankly, I wish the Left were right about this, and that government could create jobs simply by spending money, or by wiggling its nose like Elizabeth Montgomery. 

But they’re not.

Government doesn’t create jobs.  It just doesn’t.  And this is so no matter how many times people on the Left grab a podium or a pen and say it does.  The fact is the Left has absolutely no concept of what a job actually is or where it comes from—hard to blame them, really, since most of them have never had a real one—which is why they are long on vague and hopelessly general platitudes like “we’re going to create green jobs,” but short on specifics.  What jobs, exactly?  You mean temporary jobs caulking windows?  Check out the spectcular success that’s been in Seattle, where a $20 million stimulus grant in 2010 was supposed to create 2,000 living wage jobs weatherizing homes; according to a piece picked up yesterday on the Drudge Report, to date that program has generated just 14 jobs—shockingly, most of those are “administrative”—a staggering $1.4 million per.

A job exists because someone has applied his talent and risked his capital to create a business supplying a good or service that people want, and demand has risen to the point that he cannot meet it by himself.  If that business owner can make additional profit by hiring an employee to help increase supply of that good or service, or produce it more efficiently such that the employer’s costs are reduced, then a job is created.  The job doesn’t spring from whole cloth because of some government decree, or because government spent money, or because Obama, or Paul Krugman, or Maureen Dowd wished it into existence.  The job comes about because a private individual created a good or service the market demands. 

Let’s consider a specific example:

Suzie notices that people walking down her street get hot and thirsty during the summer.  So she invests $10 of her money in a supply of water, lemons, sugar, and ice, and applies her labor to make 5 gallons (25 glasses) of lemonade, which she then sells at the corner for $1 a glass.  She sells all 25 glasses for a profit of $15, but by noon she has sold out of lemonade.  So the next day she hires Jack for $10 to make two batches of lemonade, one she takes to the corner in the morning, and one he brings her at noon.  Now she can sell 10 gallons of lemonade for a gross profit of $30, pay Jack the $10, and she nets $20—a 33% profit increase by hiring Jack. 

That, my friends on the Left, is what a job is, and where it comes from.  Suzie can’t and won’t hire Jack because there’s a tax credit or federal grant in it for her.  She will only hire Jack if she actually has a need for his help and it is profitable for her to do so.  If no one wants lemonade, no amount of government spending is going to create a job for Jack, because she simply doesn’t need his help. 

Government “investment” in “green technology” can’t create jobs.  The only thing that will create jobs of that nature is a demand for those products.  To his credit, the President has it right on this one when he says "you have to understand the market." But he fails to recognize that, at present, there is no market for this "green technology," as evidenced by the virtually non-existent sales of vehicles like the Chevrolet Volt despite a $7,500 tax credit to purchase one, as compared to SUV sales up 31%.  And with every major energy company on the planet already heavily invested in R&D on creating alternative energy products, if that technology can be created, and if there’s a demand for its products, those companies are already there to fill that market.  Spending federal dollars won’t create that market or speed up the process, which is why at the very Johnson Controls plant where Obama spoke Thursday, $300 million in federal grants has resulted in a whopping 150 jobs, or $2 million per.  It sounds nice—it appears to attempt to be proactive in addressing the problem, and any time Obama can say “green” his Leftist base gets that familiar tingle up its leg.  But it’s fantasy. 

$1.4 million/job here, $2 million/job there.  We’d be better off simply giving people $150,000 a year.  Hell, give ‘em $250,000—that way, they’ll be “wealthy” and we can tax the crap out of them, take it all back and do it all over again.  Ain’t free money fun?

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