The American Spectator : Job Creation Is No Mystery

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Job Creation Is No Mystery

By Tom McClintock from the December 2011 - January 2012 issue

Time to put freedom back to work.

The government's continuing failure to address our nation's gut-wrenching unemployment stems from a fundamental disagreement over how jobs are created in the first place.

We are now in the third year of policies predicated on the assumption that government spending creates jobs.

We have squandered three years and trillions of dollars of the nation's wealth on such policies, and they have not worked because they cannot work.

Government cannot inject a single dollar into the economy until it has first taken that same dollar out of the economy.

True, we can see the job that is saved or created when the government puts that dollar back into the economy. What we can't see as clearly are the jobs that are destroyed or prevented from forming because government has first taken that dollar out of the economy. We see those millions of lost jobs in a chronic unemployment rate and a stagnating economy.

Government can transfer jobs from the productive sector to the government sector by taking money from one and giving it to the other. That's at the heart of the president's plan to spend billions of dollars to hire more teachers and firefighters and police officers. But these temporary government jobs come at a steep price: every dollar spent sustaining one of these jobs is a dollar taken from the same capital pool that would otherwise have been available to productive businesses to invest in creating permanent jobs.

Government can also transfer jobs from one business to another by taking capital from one and giving it to the other.

That's how we got Solyndra. We put a half-billion dollars at risk to create 1,100 jobs (that's $450,000 per job) at the alternative energy company. Now those half-billion dollars are gone, and so are the jobs.

What government can do very effectively is to create the conditions in which jobs either flourish and expand, or whither and disappear.

When we place additional taxes on productivity, jobs disappear. The president says he wants to tax only millionaires and billionaires, but the tax increases in his so-called jobs plan actually hammer more than 75 percent of net small business income—at a time when we're counting on those small businesses to create two-thirds of the new jobs that our people desperately need. That is insane.

When we place additional regulations on productivity, jobs disappear. That's what we're watching in real time: thousands of pages of new regulations from Obamacare, the Dodd-Frank regulation bill, and the Environmental Protection Agency.

House Republicans have laid out a comprehensive plan to revive the economy through the same policies that worked under Ronald Reagan in the early 1980s, John F. Kennedy in the early '60s, Harry Truman in the mid-'40s, and Warren Harding in the early '20s.

Reduce the tax and regulatory burdens, and jobs flourish.

For example, the Congressional Budget Office estimates that Obamacare by itself will cost the economy a net loss of 800,000 jobs. In October, the Natural Resources Committee received testimony that just by getting government out of the way and opening up American energy resources to development, the economy could generate 700,000 jobs and $660 billion of direct revenues to the national and state treasuries.

Repeal Obamacare and open up American energy resources -- there's 1.5 million jobs right there -- at no cost to taxpayers.

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About the Author

Tom McClintock is a Republican U.S. representative from California.

Letter to the Editor View all comments (15) | Leave a comment

al222| 12.13.11 @ 10:12AM

Dream on. Almost half the country wants something for nothing. Obama and Democrats are determined to drive that number to 51%. The 2012 election will tell us everything we need to know.

RonRonDoRon| 12.13.11 @ 2:49PM

As Huey Long said: "If you're not getting something for nothing, you're not getting your fair share!"

PCC| 12.13.11 @ 7:46PM

Huey Long, pace Randy Newman:

"Every man a king, every man a king,
For you can be a millionnaire.
If there's something belonging to others,
There's enough for all people to share."

"When it's sunny blue, and December, too,
In the wintertime or spring,
There'll be peace without end,
Every neigbor a friend,
And every man a king."

Alan Brooks| 1.29.12 @ 9:48PM

What are you worried about? when Newt is president plenty of jobs will be available to colonize the Moon.

When that runs out, then there's Mars.

Alan Brooks| 1.29.12 @ 9:49PM

Then Jupiter, Saturn, Uranus, Neptune...

JayDick| 12.13.11 @ 10:24AM

Our experience tells us that, in addition to the measures outlined in the article, restrained government spending helps economic growth. It seems that government spending is largely unproductive; it does nothing to lead to economic efficiency or growth and in fact often has the opposite effect. Private spending, on the other hand mostly does lead to economic efficiency and growth.

The Republican Presidential nominee needs to explain this and convince the electorate that government spending must be reduced for the economy to grow and produce permanent jobs.

TrueBlue| 12.13.11 @ 4:24PM

That's because in order for the government to spend money, it first has to take it out of the private sector. Then a portion of that money gets used to pay the employees of whatever agency is used to distribute the funds before it goes toward even remotely considered the economy, so you end up with less than a dollar going back out. How anyone thinks this helps the economy is beyond me.

Why are people so willing to trust the government will spend the money correctly when it is $15 Trillion in debt?!

rhoetus| 12.30.11 @ 7:05PM

It's like sucking all the oxygen out of the room. No wonder the economy is short of breath.

Kingofthenet| 12.13.11 @ 3:03PM

Your right, time to put that Lazy Freedom back to work and remind the punk that 'Freedom isn't free'.

Lost| 12.13.11 @ 4:12PM

Just like to point out that to put $1 back into the economy from the government requires at least $3 to be taken out first. Government spending is always a loss and never breaks even.

POST American| 12.13.11 @ 10:16PM

---FREE ENTERPRISE and NOT
more CAPIT--SO--SHELL--ism or
CAPIT--MARKS--ism is what's needed.

URGENTLY needed.

Ivan Ivanovich| 12.14.11 @ 7:13AM

Yes, I agree with Lost; It takes a lot more than $1 to provide $1 in private wages. For the government to provide that $1 they have to take $.30 for EPA, $.30 for HUD, $.30 for IRS, $.30 for TARP, and so on and so on up to $15,000,000,000,000 and growing.

rhoetus| 12.30.11 @ 6:15PM

Vote buying gave us the $15 Trillion national debt and unsustainable unfunded mandates in Social Security and Medicare. Don't let the AARP determine the issues. Vote for Ron Paul.

jim batiste| 2.8.12 @ 12:03AM

Hey Tom. I like what you have to say and agree with most of it. How come no one has tried this kind of strategy? http://merchantcashadvanceindu.....at-a-time/

For every additional cent a restaurant earns in revenue, 1 new job is created. Congress should spend time inspiring the private sector not legislating it!