Chortlenomics

Chortlenomics
Paul Jacob
Sunday, November 08, 2009

As long as I can remember, politicians have promised “jobs.”

When not promising tangible “pork”-based jobs, most of these promises turn out to be the economic equivalent of the computer industry’s famed darker side: vaporware.

Call it vaporwork.

Politicians provide the vapor. That’s the easy part. The actual work? Well, how much work do politicians cause us to engage in just to unbury ourselves from their silly, wealth-extracting regulations, requirements, registrations and legalistic “refinements”? I know, I know: Every time they add on some new complication to the tax code, jobs emerge in the accounting and tax-consulting industry. But this doesn’t exactly make us better off, does it? Not on net.

I guess there are some things government can do to ensure that jobs get created, out there in the bill-paying, profit-making world. But these things amount, mainly, just to doing a few things right and then shutting up about it.

But just try to get a politician to

(a) do something right, and
(b) shut up about it!

Our previous president may have been tempted to keep mum now and then, since he wasn’t exactly Demonsthenes. But our current president has “orator” written all over him, so he never ceases promising things. Eloquently.

He promises, for instance, to create jobs by spending trillions of borrowed money.

But more than half of those jobs turn out to be government jobs.

Government jobs don’t count, Mr. President. Many things governments do actually drain us. Jobs in the marketplace, on the other hand, serve real consumer demand, make us all better off. They also help pay the taxes for those government jobs. Employing more people in government means needing more real jobs to pay for the government ones.

Pro-bailout economists talk about “the multiplier” effect. Spend some government (taxpayer) money, and the effects “multiply” in the economy, as if the Invisible Hand were on speed. Some day some young genius is going to earn a Nobel explaining “the divider” effect. Create a government job and the productivity in the marketplace “divides” as a result of the increased taxes needed to support the jobs . . . down the road. Mathematize the notion, and you’ve got your Nobel. (Of course, there’s nothing in the idea that Bastiat or Mises or Tullock hasn’t explained — but add that math and you’ll really get somewhere.)

Our orator-in-chief also says he’s in the biz of “saving jobs.” But here, like the bank bailouts, what’s happening is that some people are getting raises and bonuses out of bailout money, while the unemployment rate goes double-digit.

The real multiplier effect — Keynes was looking in the wrong direction, no doubt — regards talk. For every dollar government spends, politicians claim umpteen more jobs “saved.” It’s not reality. The multiplication effect occurs entirely in rhetoric and in PowerPoint presentations. Or on recovery.gov. (For more accurate accounting, go to Onvia’s recovery.org.)

Michael Cooper and Ron Nixon start out a New York Times analysis with this:

In June, the federal government spent $1,047 in stimulus money to buy a rider mower from the Toro Company to cut the grass at the Fayetteville National Cemetery in Arkansas. Now, a report on the government’s stimulus Web site improbably claims that that single lawn mower sale helped save or create 50 jobs.
And that, folks, marks just the beginning, just one example.

The magic of this sort of job creation doesn’t rest upon the logic of markets or Adam Smith’s “invisible hand” (which makes actual sense, when you think about it — people gain through trades, that’s why both sides in any trade voluntarily agree to it, with each gain contributing to a real, additive progress). Here the magic lies simply in the lying. The multiplier multiplies because politicians tell multiple lies.

Every downturn we get the same thing. Hot air. Vaporware and vaporwork.

It’s time to puncture politicians’ favorite balloons. Their economics makes no sense. Their talk is just jibber-jabber. All they do is take, take, take and fake, fake, fake.

Usually I get angry in the face of lying politicians, but maybe it’s time to just relieve ourselves with a large collective snort, a concerted chortle. Our leaders may believe their blather, but we don’t.