If Franklin Roosevelt were alive today, hed want to
shake the hand of California governor Gray Davis. Why?
The good governor dreams of an economic recovery plan
that FDR, the old socialist himself, would easily
identify as a page out of his own failed Keynesian dream.
In a January 7 Associated Press report in the
Washington Times (Davis plans on
priming pump with new jobs), we read, Gov.
Gray Davis is proposing a far-reaching plan to create
500,000 new jobs and help the states ailing
economy.... Mr. Davis, who faces a $34.8 billion state
deficit, plans to focus on economic initiatives
during his new term in office by calling for
worker-training programs, additional money from the
federal government ... and acceleration of bond-funded
state projects to create new jobs.
Let us take a few moments to reflect on Daviss
ideas on economic recovery. In order to
kick-start the economy, as popular vernacular
and the flawed manipulation of abstract thinking
which treats the economy as a giant machine
would have it , were to believe that what is
needed is more government spending.
Take worker-training programs. There is a
slowdown in the amount of wealth being created in our
economy and therefore less private investment and fewer
jobs. So the answer, according to the wisdom of Davis, is
to take even more wealth out of the
private sector, over and above the unfathomable
amount already being drained away by present taxes and
regulations, to train people who are not
currently producing anything to do something that will
allegedly be productive at some future date. One would
think that an industry in need of workers would be quite
capable of taking care of job training itself, without
the help of an expensive and inefficient
bureaucracy posing as job counselor.
Then theres a need for additional money from
the federal government, presumably to pay for
Homeland Security dictates passed down from on high.
Surely that will help create jobs, as a new security
enterprise funded by the feds will require
local workers to carry out its tasks, right? Perhaps. But
then, only at the cost of jobs and prosperity elsewhere,
as the money sent to California by the federal government
is first taken out of the economy (ironically, including
Californias economy) and sent to California to pay
for those government programs.
And finally, the coup de grâce: bond-funded state
projects to create new jobs. Sounds a lot like
FDRs WPA, doesnt it? Virginias famous
Skyline Drive, built during Roosevelts
administration, might provide majestic views of the Blue
Ridge Mountains, but its construction didnt create
jobs it destroyed real productivity by draining
resources away from profitable market ventures and
investing them instead in the illusion of productivity.
Bond-funded state projects might as well
entail thousands of workers digging holes only to fill
them back up again, for all the good it will do the
economy.
The only way out of our current financial woes is through
economic freedom and the free market. Real jobs can be
created only as a result of the accumulation of wealth
not its dissipation which requires that it
be put to use for remunerative purposes, not dumped into
the bottomless pit of tax-funded programs.
The government is absolutely incapable of creating new
jobs. It can, at best, only take money from one man by
force and give it to another and call it a
paycheck. If Californias governor is
truly interested in priming the economic
pump, he would be better advised to call for
the massive contraction of government spending and
taxation that hinder true economic growth and an honest,
productive, and profitable job market. As a good start,
the governor might purchase a copy of Henry
Hazlitts classic primer, Economics in One
Lesson, which brilliantly defines the art of
economics as looking not merely at the immediate
but at the longer effects of any act or policy; it
consists in tracing the consequences of that policy not
merely for one group but for all groups.
Sadly, it is more likely that Governor Davis will
continue to succumb to what Ludwig von Mises aptly
described as the almost religious fervor of those
who believe in salvation through spending.
Scott McPherson is policy advisor at The Future of Freedom Foundation in Fairfax, Va.
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