Obama’s Keynesian Superstition

Tibor R. Machan

President Obama gave a speech on Thursday afternoon announcing the American Job Creation Act. There were numerous points that were open to criticism but before dealing with a few, it is important to state what creates jobs: Jobs are created when people who have earned an honest buck go to the market and purchase goods and services that other people need to produce. If a good many go to the market to do this, there will be many jobs, if only a few, there will be few jobs. Moreover only if the people get to choose what purchases they make in the market will the resulting jobs be more than make-belief, artificial jobs, like digging holes and filling them up again.

Mr. Obama and his team appear to believe that printing money and handing it to people who may or may not take it to the market and spend it on goods and services serves to create jobs but this is sheer superstition. It is like thinking that steroids produce healthy muscles in one’s body. Such spending is more akin to fueling artificial production--like getting a bunch of extra haircuts with phony money one has obtained from a forger. Or numerous baths or car washes--as if people had no ability to allocate their limited resources prudently but will do well by spending the phony funds (or other peoples’) on duplicate goods and services. So, bottom line: jobs are created from people spending honestly earned income, not from spending phantom income.

Now back to Mr. Obama’s address. He started by telling us all that “the millions of Americans who are watching right now do not care about politics.” Oh? Who are those millions of people who take part in primary elections, in caucuses, and in all the campaigns around election times?

Obama continues: these millions of Americans “have real life concerns,” as opposed to politics. What a thing to say for a lifelong politician. It is a strange confession, to proclaim that politics is not a real life concern. How these little asides turn out to be very revealing from a Harvard educated politician!

Obama also told us that all these Americans “know that Washington hasn’t always put their interests first.” No kidding--”hasn’t always”? How about has very, very rarely. Anyone with only a cursory familiarity with public choice theory--an idea Professors James Buchanan and Gordon Tullock developed (for which Buchanan received the Nobel Prize), in their book The Calculus of Consent (1962)--can appreciate that Obama completely understated the degree to which Washington fails to put the interests of Americans first. For one, Americans are a highly varied lot and they have zillions of interests which plainly cannot be addressed by Washington. Politicians aren’t deities, Mr. President.

Then, also, politicians are mostly busy looking out for their own interests--mostly getting reelected the next time they run for office--except when looking out for the interests of special groups and major donors that happen to further their own. So this entire line of reasoning on which it seems the president is basing his American Job Creation Act is fallacious.

Here is yet another howler from Mr. Obama: “The people in this country work hard to meet their responsibilities.” Well, some do but some don’t. Many people in America believe that they are entitled to benefits from the government simply because they exist, they have been born here, kind of like the what millions of Greek citizens evidently believe. And many believe that they are credit worthy even while being anything but. Which is to say millions of Americans have expected to be provided with loans to buy homes even though they had no idea how to pay them back or had the collateral to back them. This does not testify to what the president has claimed about the people of this country.

The entire plan of the jobs bill amounts to nothing more than artificially manufacturing jobs, from phony money, phony demand. And this doesn’t even address the issue of Mr. Obama’s favorite superstition, namely, his idea that he can somehow turn America into a showcase of green life without incurring massive expenses for this, expenses the country cannot afford. (It is interesting how Obama has avoided the subject of his giving awards to certain companies that went green big time and then went belly up!)

One could go on. Sadly if an Obama enthusiast were to come across these points they would most probably be dismissed as nothing but dirty Republican or Tea Party politics. No one of Obama’s team ever confronts the arguments--they just ridicule the people who put them forth, even demonize them.

And don’t forget the persistent rich bashing that made its appearance in this lecture just as it tends to in every other given to us by Mr. Obama or members of his team. Ok, so some rich folks are doing well even these days. So why begrudge them this? It’s like wanting to injure able bodied folks because there some some who are disabled. Disgusting. Moreover, even as a public finance, the idea of targeting the wealthy is ridiculous. If all those with over $250,000 had their money confiscated by the feds, hardly any dent would be made on the national debt, especially if one subjects the idea to more public choice analysis.

Mr. Obama, you aren’t going to make jobs and you aren’t going to do any good to most Americans apart from some of your pals in the bureaucracy with what you want to do. Take an entirely different approach, namely, remove government regulations and lower taxes for everyone and that will most likely energize the country’s economy.