Monday, June 8, 2009

Go Git Them There Shovels

Obama says he's going to deliver 600K new federal "stimulus" jobs.

Maybe it's me, but aren't jobs funded out of borrowed money via the massive deficit a bit of hocus pocus? A more fundamental question to consider is how jobs are created and sustained in the first place? Why do people have the jobs they have? Why do people pay others to perform a given task over a long time? Usually, people learn a skill that is useful to somebody in some industry. An employer makes a decision on who to hire depending on how rare the skill is or how much money the employer will make by paying for your skill. Your pay is set by these things as well as your competition and what people are willing to accept in compensation. If somebody has a rare skill that others are willing to pay a lot of money for, you will have a high paying job. If it is a skill that many have and there's not a ton of demand for it, you will find yourself with a fairly low paying job. Of course, the best opportunity to earn a high income is as an entrepreneur.

So how will having the federales hire people in the short term produce jobs that will be durable and lasting given the realities of the job market? The answer is that it won't help people long term. The fact is that it drains money from one sector of the economy because it is funded out of debt and ultimately higher taxes down the road and gives it to another to produce these jobs.

Republicans should be against this. They should advocate for small business credits, possibly help entrepreneurs get off the ground where appropriate, and maybe propose expanded opportunities for vocational and community college training so people can acquire the skills they need for a competitive job market. This repetitive nonsense from the Obama administration is like a circus akin to the Roman emperors putting on shows at the Coliseum to distract the mob from what's really happening.

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