With unemployment still above 9% Barack Obama promises yet another of his famous stimulus programs in September. Rick Perry from Texas claims he will be able to create jobs if elected President of the United States. From Fox to MSNBC, commentators wonder which politician can create private sector jobs.
The fallacy is in the question itself. Politicians can’t create jobs. They have never created jobs and they will never be able to create jobs; at least not private sector jobs. The problem with public sector jobs is that they must be paid for with taxes. Ultimately, only private sector jobs create wealth.
Some Presidents, like Bill Clinton and Ronald Reagan finished their terms with low unemployment and a booming economy. Other presidents, like Jimmy Carter and Barack Obama presided over stagflation or recessionary economies. Each of these Presidents got the credit or the blame for the type of economy that existed during their terms. As Presidents alone, none of them deserved either the praise or the criticism for the condition of the economy. One man can’t affect the economy, even if there are the President of the United States.
Private sector jobs are created by entrepreneurs who discover a need among the public and find a way to fill it. Customers willingly pay for the goods and services of these entrepreneurs because the benefit of these items far exceeds the price paid. The telegraph becomes a black AT&T telephone, which eventually becomes a smart phone. The abacus becomes a slide rule, which becomes a hand-held calculator, which becomes a supercomputer. In the process millionaires and billionaires are made; millions of jobs are created, and the middle class prospers.
It is difficult to predict which businesses or inventions might succeed in the future. Will electric cars catch on? Will wind energy ever be competitive with other sources of electricity? Will “the cloud” be as important as experts say? Only the market can decide. When government “bets on winners,” it usually miss-fires, wasting billions of tax dollars on failed schemes.
The “free market” politician is at a disadvantage to a statist politician when it comes to creating jobs quickly. The statist politician creates government jobs quickly, either by printing money or increasing taxes. The problem is that government jobs aren’t sustainable without private sector growth to pay for them. When asked about jobs, the “free market” politician can only say, “just hang in there, the market will work as it always has.”
While Presidents aren’t directly responsible for the economies of their terms, they can propose government policies that destroy future incentives to start new firms. In my opinion, no President in my lifetime has been so ignorant of the market and so utterly destructive to future job creation as Barack Hussein Obama.