(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.