(Lawrence W. Reed is president of the Foundation for Economic Education — www.fee.org — and president emeritus of the Mackinac Center for Public Policy.)
Last September, President Obama used the extraordinary platform of a joint session of Congress to propose the most un-extraordinary: Yet another round of wasteful government spending in the name of “job creation.”
The spectacle itself was remarkable if for no other reason than this: There he was, lecturing us on job creation—a man who has never personally been a job creator and whose policies have destroyed hundreds of thousands of jobs.
Here are just a few things that the President needs to learn:
Jobs — real ones that can last — don’t magically materialize just because Congress throws money around. Real jobs come into being when savers, investors, entrepreneurs and business managers hire because they have confidence in the future. Taxing and berating job creators may get you some votes but not jobs.
Government has nothing to give anybody except what it first takes from somebody. Every dollar it spends comes from today’s taxes or borrowing (which means future taxes plus interest) or printing money (which means we all pay eventually through inflation). Any “stimulus” we get from government spending is completely offset sooner or later, one way or the other. The idea that government spending creates more jobs than it destroys or prevents is not science; it’s not even economics. It’s more like voodoo or superstition.
Recessions are like hangovers. The harm was done the night before at the party; we just feel the pain of it the next morning. In economic terms, the harm before this recession was a combination of easy money from the Federal Reserve and Congress jawboning banks to lend that money to people who couldn’t afford it.
What would you tell a drunk when he’s hung over? Dry out. No more booze. You wouldn’t hand him another bottle. Yet doling out the booze is precisely what Washington has been doing to the economy and the President can’t figure out why it won’t sober up.
Jobs are like anything else — the more they cost, the less we buy. At the same time, the President seems puzzled as to why unemployment is higher today than it was before we squandered a trillion dollars on “stimulus.” His administration is jacking up the costs of creating jobs. From health care to the environment to taxes to labor policy, he seems to believe that more government, more spending, more debt and more burdens are the answer.
Job creators are telling the President, “Get off our backs, out of our pockets, and out of our way,” but he’s not listening. It’s a vivid reminder of the awful costs all of us pay when our leaders don’t know economics.