The American Spectator : Why Government Doesn't Create Jobs

Text Size

Special Report

Why Government Doesn't Create Jobs

By Green Lantern on 8.24.11 @ 6:08AM

Because everyone in the bureaucracy demands to have a say and so nothing is done.

If you want to know why $800 billion in government stimulus spending has created 9 percent unemployment, all you have to do is look at the windmill in Milwaukee.

The project involves a single wind turbine 154 feet tall (small by today's standard) that is supposed to supply some electricity to the Milwaukee Port Authority. The $500,000 project is being built with $400,000 in federal stimulus money and another $100,000 from the Wisconsin Focus on Energy Program. It's been several years in the making but things finally seemed ready to go last month when the city finally put the project out to bid. The winner, Kettle Renewable Enterprises, had small subcontracts of $2,000 for women-and-minority-owned firms in its $500,000 offer. However, city alderman Robert Bauman decided this wasn't enough. He vetoed the project, saying more woman-and-minority firms should have been included. "If that means losing $500,000, then we'll lose $500,000," Bauman told the press.

In a nutshell, that's why government never gets anything done. It's not the women-and-minorities part. The problem is that with government everybody has to have a say in what gets done. In the Milwaukee case, federal stimulus rules didn't require the minority subcontracting. In fact, Mayor Tom Barrett is arguing that federal rules prohibit such a mandate in this case. But what does it matter? The important thing in government is that everybody gets to have a say. The Milwaukee Board of Harbor Commissioners has to sign off on the project and their stake may involve pushing some ideology or making constituents happy.

Anyone who has ever worked in a large, bureaucratic organization knows the pattern. Getting anything approved requires going through layer upon layer of bureaucracy. Pretty soon you're in a territory where people signing off know nothing about the project but only have their own oblique interests. Days and weeks are spent in meeting after meeting, trying to get everybody on board and reach an agreement. It's a wonder anything ever gets done.

Government is just the same thing only worse because there are now more stakeholders. Now everybody gets a say. Projects collect interest groups like barnacles, most of them with no interest in the main task but hanging on to push some irrelevant agenda. That's why we have K Street and why everybody there is pushing to have more decision-making moved to Washington in order to increase their leverage.

A few years ago, New York City was trying to decide what to do with Governors Island, a beautiful mile-square piece of real estate off the southern tip of Manhattan that was dropped in the city's lap when the Coast Guard abandoned it after 200 years of federal ownership. A ten-minute ferry ride from Wall Street and dotted with century-old buildings, it would make a fantastic research park along the lines of Stanford Research Park or North Carolina's Research Triangle. When the relevant City Council committee held hearings on the master plan, however, all 12 members began by making a statement of what the project meant for their district. The first speaker, from Harlem, used his five minutes to opine that he didn't like the term "master plan" because it made him think of "masters and slaves," which had a negative association for African Americans. Things went downhill from there. Every representative reiterated that theirs was the most important district in New York City and that whatever happened on Governors Island, it better do something for their constituents. Trying to please everyone, the city has done nothing with Governors Island except hold sculpture exhibitions and outdoor composting lessons and encourage people to go out for bike rides.

It's the same at any hearing in Congress. No matter what the subject, each member gets to make a five-minute introductory speech. This is for the benefit of the television cameras back home. (The members jokingly refer to these as "talkings" rather than "hearings.") By the time the real testimony begins -- usually about an hour later -- members are taking off for other appointments. All this may work when you're investigating corruption in the food stamp program or trying to cast blame for the subprime meltdown, but for building things and getting something done -- forget about it.

Every time the federal government undertakes some simple task, it becomes an effort to reinvent the world. Last week it was revealed that a $20 million stimulus program in Seattle to weatherize homes had managed to weatherize three homes and create 14 jobs in its first year. Nothing is ever straightforward. Every city has lots of companies in the business of weatherizing homes. But the government can't just go out and hire them. It has to throw in provisions for taking people off the street for job training with special outreach for Spanish language speakers and so by the time all this is thrown into the pot, nothing gets done.

There is only way out of this bureaucratic trap -- entrepreneurship. People working in established companies say to themselves, "The hell with all this bureaucracy. I'm going to go out and do this on my own." Last month the New York Times ran a story about Gautam Adani, an Indian entrepreneur who is providing the country with significant portions of its electricity simply by working around the government and its restrictions. "He is able to do so well partly because he is very entrepreneurial and has found the right opportunity," lamented an official in the government finance ministry. "[I]t's a symptom of a dysfunctional state. He is able to deliver something more effectively than the state." It's the same everywhere. In The Spirit of Enterprise, his memorable history of Silicon Valley, George Gilder showed that every major company was created by employees of another company who got tired of dealing with upper management and decided to strike out on their own. The process is on-going today -- although Silicon Valley has become been dangerously enmeshed in the government's pursuit of "alternative energy." Businesses start when individuals decide to go outside the bureaucracy -- and it's those small business that still create half the new jobs in the country every year.

But the bigger the government becomes, the harder it is to go around it. With so much investment being directed out of Washington and the government controlling so much money, things eventually come to a standstill. Just as Francis Parkinson noted that large institutions usually build their monumental headquarters just as they are passing the peak of their development, so President Obama's new "Department of Jobs" will be probably mark the end of job creation in America. It will be the one last, fatal layer of bureaucracy.

About the Author

Green Lantern is the pen-name of an East Coast writer.

Letter to the Editor View all comments (43) | Leave a comment

Bill Hussein O'Stalin| 8.24.11 @ 6:24AM

Actually it is the women and minorities part. The "every one must have a say" movement started with the concept of diversity of thought and action.

Bureaucracies are staffed with legions of women and minorities who really have never accomplished anything except going to work for the government.

They have little understanding of what it takes to move an object from Point A to B because their conceptual reality is wrapped around moving objects from Point A to Z and every letter in between is a regulation or a bureaucratic determined to protect their little empire of absolute authority.

The economy is imploding precisely because women and minorities have a huge risk assigned to them because they are a protected species. Many would find that statement offensive but it's a fact.

That 70 year trend of protecting women and minorities in the work place reached it's final level of insanity with the Lily Ledbetter Law, the first law signed with much hand clapping and ovations by Obama, but since that law passed many more jobs were deconstructed by the private sector and shipped overseas.

The government hasn't learned and will not admit that those absolute job protections come at a high cost and the risk is unacceptable in the private sector. Many smaller business types prefer not to expand and those that do off load risk by shipping to to other firms or simply using services readily available through the internet.

While the economy continues to implode the political class inside the beltway can't wrap their minds around the fact that the political class has designed the perfect killing machine when it comes to the economy.

A maze of rights to women, minorities and the disabled has pretty well launched an Age of Unemployment in America.

Few recognize the danger, and those who do are either labeled as misogynistic or racist or unsympathetic to the disabled.

Pecos Pete| 8.24.11 @ 9:14AM

BHO: Well said! I can certify from my own experience that the "maze of rights" is killing old, and new, businesses.

Intelligent Design| 8.24.11 @ 6:55AM

Only capitalists with capital create jobs.

Purpleguy| 8.24.11 @ 6:57PM

Yes, and they do it in spite of government and regulation ... government represents the people, all the people - a business does not. A business represents the owner's stake in a company and perhaps some investors. A corporation represents it's stockholders with little regard to "All the people". THAT is the difference. In a democracy, that's how it works. Businesses will always grouse about regulations, just like grousing about unions, benefits and wages - they see all of them as hurting profits. But without the workers - ain't no business. And, if the ppl have no money - ain't no profits ...

Nunya| 8.25.11 @ 9:56AM

Purp, we don't live in a "Democracy"--or at least THAT is not what our Founders intended. THEY created a Representative Republic, which is NOT a democracy. It is those that intend to destroy what was created in this country that have led everyone to believe that this is a democracy and everyone should have their say. Democracies don't work and never have--read your history.

As to the people having no money, etc., it's not the government that creates wealth, it's Capitalism and entrepreneurship. Government CANNOT CREATE anything. All it can do is regulate and destroy.

Occam's Tool| 8.25.11 @ 9:16PM

Purple--you are wrong---without the idea and the creation of the company---ain't no jobs.

An inadequate cook can take Kobe Beef and turn it into an inedible mess. Contariwise, an exceptionally talented chef can do wonders with substandard ingredients. All the workers in the world will not compensate for the lack of talent and skill.

You have put the cart before the horse as a Liberal will.

Petronius| 8.24.11 @ 7:59AM

It isn't only that bureaucrats demand a say. They believe the citizenry exists just to satisfy them.

Gary B| 8.24.11 @ 8:12AM

States must lead the way. If several states simultaneously rejected some directive from DC, maybe momentum would build.

Since our anti-American "president" has stated his goal is to shut down 20% of power generation across the country, I suggest they start right now with the new EPA regulations. Surround the targeted coal generation plants with their respective National Guard troops and arrest anyone with a federal ID card who tries to gain access.

Maybe the governors association should state their goal is to defend their states against incursion by anti-American, pro-Marxist forces in DC. Do you think that would resonate across the land? Should Perry request a special meeting and promote that idea? Is he man enough?

Mike 3/505| 8.24.11 @ 11:07AM

Hear, Hear!

DaveS| 8.24.11 @ 4:21PM

The states WILL lead - when they send their 2012 electoral college votes into the counter.

Timothy L. Pennell| 8.24.11 @ 8:24AM

No, no, no.
You've got it all wrong. Maybe, if this were any other President, I would agree with you. But, this is "The One We've Been Waiting For". And, he wasn't talking to YOU and ME.
This government doesn't create jobs, because IT DOESN'T WANT TO. At least, not the kind of jobs that we would think of. They want more Government Jobs. More Public Sector Union Jobs. More Dues Paying, Democrat Campaign Contributor Jobs. If you're gonna "Launder Money", you need people to give you "Dirty Kickback Money".
Think of all the opportunities that this Son of a Communist Mother, and a Marxist Father, has had to create jobs, just in the Energy Sector, alone. Think of all the Hundreds of Thousands of Shovel Ready Infrastructure Jobs could have been created, if this Grandson of Communists, had used the $900 BILLION in Stimulus Money, for what he claimed it was for, instead of giving to the States, to prop up their Public Sector Unions, and their AFSME Union Employees, so they could keep paying their "Protection Money" to the DNC, for the upcoming 2010 Elections?
Remember who, and WHAT he is.
He is an Ideologue. And his "Ideology" is the Polar Opposite of our Founding Father's, and our Founding Documents. He is a Statist. He is a Marxist and a Communist. A Socialist, and a Maoist. He REWARDS his Friends, and PUNISHES his Enemies. That's what PUTIN does.
HE will decide who gets what. HE will pick and choose who gets the Financial assistance. The Bailout. The Zero Taxes, on $5 Billion Profit. (GE)
He aspires to do to the rest of us, what his Progressive predecessors have done to the BLACKS, in this country: Take away our will, to strive for a better life. Make us Dependent on the State, for our very existence. Keep us on our knees, with our hands out.
He's not stupid. I read people who ask: "Doesn't he know what he's doing?"
Yes. He knows exactly what he's doing. And he knows exactly what he's not doing. And he's not doing anything that will promote a Healthier Middle Class, in this Country.
What he IS doing, is just the opposite.
And, he's doing it ON PURPOSE.

Pecos Pete| 8.24.11 @ 9:19AM

TLP: Congratulations on less CAPS and some paragraphs too. One more little bitty thing, put a white space line between paragraphs like the line following this paragraph.

Thanks for your thoughts, always enjoy reading your comments.

Occam's Tool| 8.25.11 @ 9:18PM

More simply, Tim, cutting to the quick like a razor ---this President is a traitor from the Left.

That is all ye need to know.

Hence my nom de plume. The simplest explanation that covers the facts is best.

LarryK| 8.24.11 @ 8:34AM

Doh!

Dan Hirsch| 8.24.11 @ 9:21AM

NOPE!

It's not the women and minorities thing. It's not the incompetence thing. It's not the Obama Secret Plan To Destroy America thing. (He doesn't do plans, only "outlines." House servants do Obama's planning - at least that's what they tell him...)

It's not their money!

Listen to the most important line in the whole story:
""If that means losing $500,000, then we'll lose $500,000," Bauman told the press." That's Milwaukee City Alderman Bauman.

He doesn't care about the half million dollars which has come from the property, income, and sales taxes paid by people working for a living making things or doing things at a price that other people are willing to pay.

I have worked in private companies, from mom and Pop to Fortune 100 and have never heard anyone with any responsibility in the organization say, "We can just throw away $500,000." Never? No, not ever! and you haven't either.

The governmental types have no concept of how hard it is to make money - looks easy to them. But then so does brain surgery - just make a little hole, look in through a magnifying glass, wiggle some stuff around, and have the assistant surgeon close up. How hard can it be?

That is the problem - it's not their money, they have no concept of how hard it is to make, and they can always get more, because of baseline budgeting. (Better look up baseline budgeting-it is both mother and the father to federal budget growth!)

The only way to stop is to never, ever let them get their hands on it. Stopping baseline budgeting would be about half the job, ending payroll deductions and making people write checks for their income tax would be the other half.

It's not their money - whoppee!! who cares!! we can always take, borrow, impound, print more!!!!

And they are doing all of that from you, sucker, stupid taxpayer.

Don't tread on me...

Dick Nome| 8.24.11 @ 9:32AM

There are real life drones out there who think Gummint creates money and wealth. In their small worlds all of it comes from DC and thus the gummint is the distributor. These people have never had an education that that included basic Economics if they've had an education at all. Worse still, Economics isn't taught anymore in public schools as far as I know. Problem is these clowns vote and usually Democrat.

Nunya| 8.25.11 @ 10:03AM

Unfortunately, you are correct. In fact, a study of Economics should be REQUIRED to be a member of Congress, but I doubt that 1/10th of them actually have a clue as to what Economics really is. Think Charlie Rangel or Nancy Pelosi could draw a demand and supply graph? Not without help, would be my bet.

POST American| 8.24.11 @ 9:51AM

----END and warmly prosecute the FED

----Likewise the TAX FREE subisidization
of the ULTRA RICH 'benny violent' capstone
foundations --and their thousands of fronts,
spinoffs and NGO's

----Restore tarriffs

----Immediate RETRO-active IMPEACHMENT
of our last 4 CFR front op administrations and nullification of their rafts of ILLEGAL, indeed, treasonous treaties and 'agreements'

-----Write off the 1.5 quadrillion in FAKE USURY derivatives debt

------Write off the billions? -trillions? in debt to
our US taxpayer created 'China miracle'

-----Withdraw from and EXPEL the PRIVATE
corporate banking and EUGENICS trust front
-- 'United Nations' ------immediately

"DO you understand?---What's happening
is ANTI-human, do you understand that?
The Globalists are everywhere
and on every level at war with the REAL
economy, with the REAL culture."
-ALAN WATT

-------------------DO UNDERSTAND?

George S| 8.24.11 @ 10:02AM

Government does create jobs, and good paying ones too. We have more lawyers per square mile than any place on earth.

Ground Control| 8.24.11 @ 11:09AM

"The problem is that with government everybody has to have a say in what gets done."

If one accepts this, then one must also accept that it is at least theoretically possible to streamline government so that NOT everyone gets a say and consequently government CAN be made more efficient and therefore government CAN create jobs. They just don't do it very well because of the above statement. This is hogwash.

The problem with government has little to do with the process of bureaucracy and everyone getting "his say." The problem is the corruption of government, as is inherent in any organization that spends other people's money virtually without any supervision or accountability. The purpose of most of what government does is not to create jobs anyway, at least not real jobs that produce something of value. The purpose is to buy votes. Government employees have been bought by politicians, bought with cushy government jobs, lifetime security, decent pay (in some cases very GOOD pay), and a good retirement program. All these people need to do in exchange is show up for work and, most importantly, VOTE DEMOCRAT! Just as Roman Senators and Consuls bought votes with "Bread and Circuses" (free food and free entertainment), modern Democrats use the tax system to acquire wealth and status they could not achieve outside of government. One can not "streamline" corruption. It remains corruption.

Anthony| 8.24.11 @ 12:02PM

It's really quite simple to understand how the public sector does not create jobs, all one needs is a basic understanding of business principles, which of course, most leftists don't have, or refuse to acknowledge.
If one thinks of government as a corporation, the employees of that "corporation" are overhead, an expense of the corporation (the taxpayers).
In the private sector, employee "overhead" is judged on how that employee produces for the business, i.e. additional goods and services, income/profit for additional corporate growth and additional job creation in other sectors of the private sector. That's how the private sector grows and produces jobs.
In the public sector, this model does not apply. Government employees remain strictly "overhead", an expense to the taxpayers, a zero sum game. Government creates government jobs and we the taxpayers pay for them.
The cycle produces no additional revenue or growth that creates jobs not paid for by the taxpayer. What taxpayer money the government spends in the private sector does little to justify the cost of the mammoth bureaucracy.
Hence, growth in the government is a drain to the economy, as we the taxpayers support this to the detriment of the flow of our cash directly to the private sector where more goods, services and increased employment takes place .

Simon Templar| 8.24.11 @ 1:01PM

It is amazing that we still need to be arguing this point. We truly are moving to a nation of "Idiocracy."

The government does indeed create, "jobs." At the expense of the tax payer and private sector. Real jobs are created in the private sector where REAL wealth is created. Government does not create wealth, it taxes the wealth created by the public sector. It uses this taxed wealth to create a "job." This is money by the trillions taken out of the private sector that would have been used to create more wealth and more jobs. If it is not taxing it is printing money and creating devaluation of dollars of real wealth and price inflation. Why is this so hard to understand? It is not some sort of political theory or bias, it is basic reality and economics!

It's got electrolytes!

Occam's Tool| 8.25.11 @ 9:23PM

Dear Simon:

It is worth your time to read the original story. "The Marching Morons" by Cyril M Kornbluth. CM was a Jew, a friend and collaborator of Fred Pohl, an acquaintance of Isaac Asimov, and a member of the Futurians. He was also a machine gunner in the Battle of the Bulge, where overexertion lead to the development of Malignant Hypertension that killed him at the age of 35, in 1957. He wrote or co-wrote "The Little Black Bag" which was made into a brilliant Twilight Zone episode, and "The Space Merchants."

The Science Fiction Writers of America thought "The Marching Morons" was one of the finest novelettes ever written in the field. "Idiocracy" is quite good, but it nothing like the bite and punch of the original story.

irish19| 8.26.11 @ 1:30AM

Sounds like something I'd like. Are they available on Amazon?

Fly| 8.24.11 @ 2:14PM

A maze of rights to women, minorities and the disabled has pretty well launched an Age of Unemployment in America.
http://www.wholesalesunglassesbrands.com

Stan Redmond| 8.24.11 @ 2:23PM

It's quite simple. Private business and individuals are consumed with making money. And usually along the way the provide a service or product people want and enjoy.

Government types are consumed with POWER. They provide roadblocks to success and destroy people to justify their own useless lives. People are nothing more than a variable in their grand equations.

DaveS| 8.24.11 @ 3:41PM

The article is a piling-on for something that is self-evident. AS has been publishing more and more articles like this - under the guise of 'research.'

Jack Olson| 8.24.11 @ 3:47PM

I wonder whether Green Lantern hasn't confused Francis Parkinson, whom I am unable to identify, with the author C. Northcote Parkinson, who was famous as the satirist of bureaucracies.

surfcitysocal| 8.24.11 @ 8:14PM

Ahhhh. The perfect argument for a part-time Congress with term limits. The less they "accomplish", the better.

D Roamer| 8.24.11 @ 8:37PM

Government creates and maintains civil service jobs, which are vital, no doubt about that; they contribute being a tax payer, but unlike the server in the cafe, or the machinist; they create and build commerce, where items are bought and sold and the economy peculates, even adding more tax revenue.

POST American| 8.24.11 @ 11:24PM

"Understand, the problem with government
IS government."
-ALAN WATT

----And the government behind that government
IS the Freemasonic capstone, the ULTRA RICH,
TAX FREE, USURY feuled, EUGENICS driven,
'benny violent' foundations.

These monsters MUST be exposed, called out
and finally prosectuted for capital crimes
against the Republic ----to say nothing of crimes
against mankind generally, and the
foundations MUST BE dismantled and DESTROYED.

Wayne | 8.24.11 @ 11:36PM

Its 1972, I just get out of the Army, and I go the state of Illinois Employment Office. I stand in line for a couple of hours at the office in downtown Chicago. I get to the bureaucrat at the window and he ask me what I majored in. I said Math. He slams his great big book of jobs shut, and says I should have majored in something else. That individual will always represent the bureaucrat to me. They do the minimum they have to do and don't give a whit about the consequences. That's your problem. Next.

Wayne | 8.24.11 @ 11:37PM

And btw I have had a great career with my math degree, even getting a Master's degree. No thanks to the government.

2011 nfl nike jerseys| 8.25.11 @ 1:31AM

wonderful

GW| 8.25.11 @ 11:57AM

According to the administration, this probably "added" jobs. Of course, this analysis ignores the opportunity costs--what would have been the result if the $500,000 was returned to businesses and individuals who know better what to do with the money than the Feds.

Governments do not create jobs, the author is correct, but a bit lacking on the why.

Bureaucracy-laden organizations, even in the private sector, are less efficient in recognizing the needs of the market. But unlike the government, businesses that don't innovate (Blockbuster) or fail to give consumers what they want go bankrupt and leave. The author's point is spot on when discussing the inanity with the windmill story.

However, we can develop this further. When thinking about the "economy" it is best to picture it as a computer network. Independent and dispersed parts of information, hardly a minute fraction of which can be grasped by any one individual, that tell the "market" what it should do. Governments cannot create jobs because governments cannot know more than the market itself can--because the market is the sum total of all individuals!

Only a free and moral society can develop the best economies. Moral because greed, corruption, and dishonesty do not create wealth--it steals it. Free because people need to have not only the incentives (financial and otherwise) to succeed, but also the opportunity to fail--since it is the removal of failure that clears the way for newer and better ideas to take hold of the market and improve life.

fwb| 8.25.11 @ 2:13PM

Government has no resources to create jobs. First government must burden those who create on their own through taxes and regulations. Only after taking the blood, sweat, and tears of the productive can government "give"/"create" anything. Because the government had to first take, anything the government "creates" costs. It costs the burdened individual, and then more costs are incurred for the bureacrat(s). The bureaucratic positions are not jobs but welfare for those unable to create. If one subtracts the cost of the extraction from the burdened from the "jobs created" the result is always negative.

Joe Six-Pack| 8.25.11 @ 6:04PM

A short list. A free market economy created:
1) The steam engine
2) The cotton gin
3) The reaper
4) The Telephone
5) Electric light
6) The phonograph
7) The internal combustion engine
8) The airplane

Major inventions and this list goes on and on and on. What has government invented? Social Security and Medicare. This says it all.

Occam's Tool| 8.25.11 @ 9:26PM

Government also invented the Nuclear Bomb and Poison Gas, in addition to The Tank, the Concentration Camp, the death chambers at Auschwitz, The Gulag....

u said it| 8.25.11 @ 9:35PM

This is because people in government and in general love to hear themselves talk. It's an epidemic. I work for a bureacracy and I see it everyday. Everything is so decentralized that's its like pulling teeth to get anything done. Get used to it. It's not going away. As long as these bureacrats believe they are the smartest people in the world, and they do, nothing is going to get done.

jgo| 8.26.11 @ 3:50PM

Governments gave about $19M in "incentives" to India-based cross-border bodyshop and off-shorer Tata, to move into a building near Cincinnati, in exchange for promises that they'd employ 1K local citizens. It's been several years since they settled in, and have yet to report how many US citizens they employ, though they have hired several hundred Indian students from local colleges.

JeffT| 8.26.11 @ 6:58PM

The problem with government is that it is rooted in the past. By the time it can make a decision, the technology has already advanced to the next stage. Not to mention, when you're using other people's money, it doesn't matter if it works.

Saki| 8.26.11 @ 9:36PM

The subject of creating jobs in the United States has become a laughable one simply because of Affirmative-Action. As everyone knows, Affirmative-Action is based on racial preference--that is, minorities receive special big-time preferences under Affirmative-Action when it comes to educational opportunities and employment opportunities in the United States. But, because Affirmative-Action has become both a normal and accepted element of life in the United States, racial preference has likewise become both a normal and accepted element of life in the United States. Which makes job creation null and void when it comes to equality. Which makes job creation a joke when it comes to equality in education and employment. In summary, whenever Obama talks about jobs--guess who the jobs in question are earmarked for.