With the March Jobs Report, President Joe Biden announced that his Administration has created 15 million new jobs since he took office. Never mind that most of those jobs are returning workers from the COVID-19 government mandated shutdowns. In addition, that number would have been substantially higher if the Biden Administration would NOT have implemented their climate change agenda from day one, when they cancelled the Keystone XL Pipeline project and put a moratorium on oil and gas leases in the Artic National Wildlife Refuge. Not to mention the other 95 Executive Orders signed in his first 100 days in office!
Through regulation and taxation, Government can and does slow the growth of jobs, picking winners and losers, by favoring one group of workers at the expense of all other workers. But the Government does not create new jobs. Why do most people not know this?
Because Austrian Economics is not taught in our schools, allowing politicians like President Biden, supported by socialist economic professors, to perpetrate this fraud on the public.
What Biden is saying has been described by the late Dr. Will Durant, who was awarded the Pulitzer Prize and Medal of Freedom: “Education has spread, but intelligence is perpetually retarded by the fertility of the simple. . . ignorance lends itself to manipulation by the forces that mold public opinion. It may be true, as Lincoln supposed, that ‘you can’t fool all the people all the time,’ but you can fool enough of them to rule a large country.”
In Economics in One Lesson, the late Henry Hazlitt explains the problems associated with the erroneous belief that jobs are created by government. Mr. Hazlitt states, “many of the ideas which now pass for brilliant innovations and advances are in fact mere revivals of ancient errors, and a further proof of the dictum that those who are ignorant of the past are condemned to repeat it.”
In Chapter I, The Lesson, Mr. Hazlitt explains, “certain public policies . . . would benefit one group only at the expense of all other groups. The group that would benefit from such policies, having such a direct interest in them, will argue for them plausibly and persistently. It will hire the best buyable minds to devote their whole time to presenting its case. And it will finally either convince the general public that its case is sound, or so befuddle it that clear thinking on the subject becomes next to impossible.”
Mr. Hazlitt continues, “In addition to these endless pleadings of self-interest, there is a second main factor that spawns new economic fallacies every day. This is the persistent tendency of men to see only the immediate effects of a given policy, or its effects only on a special group, and to neglect to inquire what the long-run effects of that policy will be not only on that special group but on all groups. It is the fallacy of overlooking secondary consequences. In this lies the whole difference between good economics and bad. The bad economist sees only what immediately strikes the eye; the good economist also looks beyond.”
Mr. Hazlitt explains in Chapter IV, Public Works Mean Taxes, why the government does not create or add any new jobs. His example is a bridge costing $10 million resulting in taxpayers losing $10 million that they could have spent on other things that they needed more. “Therefore,” wrote Mr. Hazlitt, “for every public job created by the bridge project a private job has been destroyed somewhere else. We can see the men employed on the bridge. We can watch them at work. The employment argument of the government spenders becomes vivid, and probably for most people convincing. But there are other things we do not see, because, alas, they have never been permitted to come into existence. They are the jobs destroyed by the $10 million taken from the taxpayers. All that has happened, at best, is that there has been a diversion of jobs because of the project. More bridge builders; fewer automobile workers, television technicians, clothing workers, farmers.”
“But then we come to the second argument. The bridge exists.” Mr. Hazlitt continues, “It is, let us suppose, a beautiful and not an ugly bridge. It has come into being through the magic of government spending. Where would it have been if the obstructionists and the reactionaries had had their way? There would have been no bridge. The country would have been just that much poorer. Here again the government spenders have the better of the argument with all those who cannot see beyond the immediate range of their physical eyes. They can see the bridge. But if they have taught themselves to look for indirect as well as direct consequences they can once more see in the eye of imagination the possibilities that have never been allowed to come into existence. They can see the unbuilt homes, the unmade cars and washing machines, the unmade dresses and coats, perhaps the un-grown and unsold foodstuffs. To see these uncreated things requires a kind of imagination that not many people have. We can think of these nonexistent objects once, perhaps, but we cannot keep them before our minds as we can the bridge that we pass every working day. What has happened is merely that one thing has been created instead of others.”
Government is incapable of creating any net new jobs; at best, any job created by government in the private sector destroys another job in a different private sector industry, which results in government picking winners and losers. Any job created in government or by government in the public sector, not only displaces private sector jobs, but continues to destroy wealth through taxation to pay for the wages, benefits, and retirement programs for government employees.
There is a famous story about the late Nobel Laureate Dr. Milton Friedman, which illustrates the absurdity of job creation by government. Dr. Friedman was touring “a giant Chinese infrastructure project of some kind, in which the workers were using old-fashioned shovels and picks and wheelbarrows. Curious, Friedman asked his guide why they weren’t using bulldozers and other heavy machinery. The answer was: ‘We care about creating jobs for our people.’ To which Friedman responded: ‘Then why not use spoons?’”
We must separate Education and State. Fire the Professors pushing socialist ideology as a better alternative to freedom and capitalism. It might also make sense to vote everyone out-of-office who are Democratic Socialists. By their own admission or actions — e.g., supporting legislation that takes property from one group and gives it to another group — every Democrat is a Socialist!
Dum Spiro Spero—While I breathe, I hope.
Slainte mhath,
Robert (Mike) G. Beard Jr., C.P.A., C.G.M.A., J.D., LL.M.