A recurring theme in the babbling nonsense of the presidential contest is which of the contenders can better “handle the economy” or “create more jobs.” There is no hint of irony when talk turns to the president “creating jobs.” The chattering classes and even the trained economists among them, who should know better, are certain our chief politician has some magical ability to produce good paying jobs by properly “handling” (read “meddling with”) the economy.
The whole discussion ignores a fundamental economic principle. Politicians and their hired economists deliberately ignore it. The legions of fawning media courtiers who enjoy special access to our “leaders” are probably unaware of it.
That unquestioned principle is this: Governments do not produce anything. Government is an expense to a society, not a source of wealth. Government does not and cannot give anything to anyone that it does not take from someone else. The larger the government, the more it costs. The longer the government gravy train, the more conductors, drivers and freeloading passengers, the harder the mules in the private sector must work to pull the train.
The president, or any gaggle of politicians for that matter, can no more create real wealth-producing jobs than they can change water to wine.
They can add wagons to the gravy train, however, and invite their supporters to ride. They can load up the wagons with drones who scatter goodies from the train as it passes among the mules — the workers in the private economy who toil to pull the train and pay for the goodies.
The drones get good jobs — decent pay, great benefits, a pension plan that private sector employees could only dream about. But they don’t produce anything. The pay and benefits they receive are taxed away from the private economy or borrowed for later repayment through taxes.
Some drones get jobs tossing “benefits” from the passing train like beauty queens scattering cheap beads from a Mardi Gras float. The beads are shiny and bright. The mules jump and squeal with delight as they catch each new string — “free” medical care, “free” prescription drugs, “free” schooling, guaranteed loans, guaranteed prices, comfortable retirement, all the good things in life come raining down from the passing gravy train.
Some drones get jobs collecting the loot that pays for the beads. That they must threaten and bully the mules and must know every detail of their finances to do so is justified as “the cost of civilization.” A hundred years ago Americans were arguably more civilized at less than a tenth the cost.
Some of the drones get rule making jobs. Some drones must do the nasty job of punishing the mules who break any of the thousands of rules.
The drones regulate the mules to protect them from the horrifying dangers of unapproved herbs, drowning in buckets, carrying nail clippers on airplanes and removing tags from pillows. They make rules to be sure everyone plays fairly. They make rules specifying the proper number of left-handed, blind, female Zoroastrians with tawny cinnamon skin each bus company must have on its roster of drivers. They always exempt themselves from the rules.
These are the kinds of jobs politicians create. What all such jobs have in common is that they are a net drag on the productive economy ― the part that actually makes the burgers, beer, banjos and bullets.
Because politicians and the media elite focus on short term benefits to small groups rather than the long term effect of policy on the whole nation, they convince us all sorts of nonsense.
Until we have been repeatedly exposed to the specious, self-serving economic reasoning of powerful political leaders, it would never occur to anyone that having windows broken or cities destroyed was good for business, that paying farmers to leave their land fallow was anything but wasteful, that saving was a bad idea, or that borrowing more than you can repay will make you rich.
Even though such notions are absurd on their face, they are accepted as economic Holy Writ without question by otherwise intelligent people. The same people who then blather on about the president creating jobs.
Interest groups who benefit from the absurdities have powerful incentives to loudly protest any prospect of reduced government subsidy. The focus remains on the small local benefit, not the large general cost.
In the introduction to his 1883 essay called “The Forgotten Man” William Graham Sumner neatly summarizes the problem:
“As soon as A observes something which seems to him to be wrong, from which X is suffering, A talks it over with B, and A and B then propose to get a law passed to remedy the evil and help X. Their law always proposes to determine what C shall do for X or, in the better case, what A, B and C shall do for X…What I want to do is to look up C…I call him the Forgotten Man… He is the man who never is thought of. He is the victim of the reformer, social speculator and philanthropist, and I hope to show you before I get through that he deserves your notice both for his character and for the many burdens which are laid upon him.”
Ironically, Roosevelt’s New Deal in the 1930’s used the phrase the Forgotten Man in referring not to the C’s of the world, but to the X’s. Roosevelt and every president since have forced the C’s to support constantly increasing numbers of X’s. The real Forgotten Man is forgotten more completely than ever.
Until we understand that the Forgotten Man is not the recipient of vicarious political altruism, but its toiling victim, we will never elect leaders who know the only way to create productive jobs is to cut wagons loose from the gravy train.