AUTOGRAPHS

Washington Purposely Destroys Jobs

An unemployment rate of 9.2% surprised no one. We’ve seen it coming for centuries.

I have saved millions of jobs over the past two years. Of the total population employed, nearly half would not have work had I not continued to spend, save and invest.

It sounds nutty, but is my boast any more fanciful than our government saying it saved millions of jobs over the past three years because of economic stimulus?

Not only has it not saved any jobs, but no government, by its nature, can create any new net employment.

At face value, this statement may seem preposterous. However, it’s not what you see, but what you don’t see, that makes the difference. It’s this vital aspect of economics that makes it so easy for government to fool most of the people most of the time.

Begin by realizing that nowhere did we say the government has not hired anyone. It has and will continue to until the presses run dry. Unfortunately, for every job the government creates, it must extract the funds from some productive citizen like you and me.

This is the government fable relied upon by our dishonest politicians to continue down the ecomonic stimulus path so disastrously undertaken over the past 36 months.

There is nothing original in spreading this myth of how government works. It’s not a new story. It is a common theme throughout history.

The government tries to save the economy. It kicks the can down the road. Eventually, not only does it not solve anything, but it almost always creates a situation worse than before.

As much as I’d like to claim originality in my writings, I borrow heavily from a French economist of the mid-19th century (1849), Frederic Bastiat. As an economist, he ranks up there with von Mises, Hayek and Rothbard.

As a statesman (as opposed to politician), he’s in the Ron Paul category, driven entirely by the pursuit of truth and liberty.

Here’s how Bastiat describes poor economists of his day.

“Hence it follows that the bad economist pursues a small present good, which will be followed by a great evil to come, while the true economist pursues a great good to come, at the risk of a small present evil.”

Would this not be the perfect description of every government-employed economist of our day? Or, better yet, is this not a summary of every stimulus package we’ve seen to date?

This brilliant Frenchman’s writings read as if he worked today for Taipan. Here’s how he responded to government’s attempt to create jobs through public works projects:

Nothing is more natural than that a nation, after having assured itself that an enterprise will benefit the community, should have it executed by means of a general assessment. But I lose patience, I confess, when I hear this economic blunder advanced in support of such a project: “Besides, it will be a means of creating labor for the workmen.” [Emphasis added]

The State opens a road, builds a palace, straightens a street, cuts a canal, and so gives work to certain workmen — this is what is seen: but it deprives certain other workmen of work — and this is what is not seen…

Then you will understand that a public enterprise is a coin with two sides. Upon one is engraved a laborer at work, with this device, that which is seen; on the other is a laborer out of work, with the device, that which is not seen.”

This is as crucial of a point in his time as ours: For every job government creates, they delete an equivalent one from the private sector.

Take a moment and ask yourself is there a single efficient undertaking a government can do more efficiently than the private sector.

I dare say we both know the answer to this is a resounding “NO.”

Because government cannot create, it is only logical to concede that for every dollar spent by the government, one must be extracted from productive citizens.

Coupling this with the fact that governments are less efficient than the private sector, it must be concluded that not only are no jobs created, but with each government created position, there will not only be an offsetting loss, but a loss greater than the job stolen from the private sector.

There are volumes of research demonstrating exactly this. Unfortunately, even when presented by the government’s own wizards, they must be ignored, lest they lose a proven gimmick to dupe the citizenry and maintain their power.

As hard as it may be to hear,Washingtonknowingly destroys jobs with every spending program it initiates.

Written  by Joseph McBrennan for Taipan Publishing Group. Additional valuable content can be syndicated via our News RSS feed. Republish without charge. Required: Author attribution, links back to Transoceaninal content or www.taipanpublishinggroup.com.

About the Author

Joseph McBrennan is the Editor of Wealth Legacy Advisory and a regular contributor to free financial market e-letter Taipan Daily. Editor Joseph McBrennan comes from at least five generations of investors and traders on both sides of his family, dating back more than 150 years. He brings to Taipan Publishing Group over two decades of experience in the investment banking business.

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