Part One here: Can the Govt Create Jobs?
Obama and all the politicians keep on talking about creating jobs. They never qualify this by saying they wish to create productive jobs. There are two possible reasons for this incredible mistake. The first is because they understand economics, and realize that the govt is incapable of creating productive jobs. The other, more likely, reason is that they don’t know there is any difference between productive jobs and parasitic jobs.
To make sure our loyal readers understand the difference, we are going to explain it right here. [This has appeared in other places on this humble blog].
Our goal is threefold. First to explain the difference between productive and parasitic jobs. Second, to show why the govt can only create parasitic jobs. Third, to show the harm to everyone in the country when a new parasitic job is created.
Time to bring in our old friend, Devil’s Advocate[=DA] , and have a dialogue between him and Smiling Dave [=SD].
1. What are the Two Kinds of Jobs?
DA: Well, what do you have to say for yourself, wicked Smiling Dave, you heartless thing oriented person. Don’t you care about people’s lives? Isn’t “more jobs” a noble goal for the govt to pursue? Do you want everyone to starve to death?
SD: Say I gave everyone a job at the post office. Everyone. What would happen?
DA: What a silly question. We would run out of food and clothing and everything else very quickly. Everyone would get a paycheck and spend it on what they want, but no new things would be made. If everyone is working at the post office, then no one is working on the farms or in the factories. When I said we need more jobs, I didn’t mean moving people from productive jobs, jobs that actually make useful things, into parasitic jobs, jobs that don’t do anything useful. I meant moving people from off their couch and off the streets into dignified employment.
SD: Is working in the post office the kind of dignified employment you are talking about?
DA: Why not? Indoors, nice pay, good pension, doing something useful, delivering the mail.
SD: If it’s so great, why doesn’t the post office hire all these unemployed people right now?
DA: Because the post office is losing money as it is, and hiring more people means it will lose even more money.
SD: Another way of saying those jobs are parasitic. The new employees get pay checks, but do not produce anything in return, at least not enough to cover the cost of hiring them. Meaning they get to eat for free. Nice for them, but not very nice for whoever is feeding them. In fact it’s not very nice for the economy as a whole, meaning for everyone, because what the parasites eat is not replaced. After they spend their pay checks, there is less for everyone else.
Moving people from unemployment to a parasitic job is almost as bad for the economy as moving them from productive jobs to parasitic jobs. In both cases, there is less and less to go round for everyone.
DA: OK, Mr Smartypants, then what is the answer for all those unemployed people? You want them to just starve?
SD: Of course not. I want them to get productive jobs. Jobs in which what they take away from the general stockpile of goodies is constantly replaced by the work they do. And, of course, that is truly dignified labor. Where your work benefits humanity, as opposed to hurting humanity.
DA: And just who are you do decide which job is productive and which one isn’t?
Do you think you are smarter than the brilliant President Obama, who created jobs at Solyndra to the tune of half a billion bucks, only to have the company go bankrupt in a few months?
SD: What do you think I am, a central planner, a Soviet Comissar? The free market will decide, of course.
DA: And what if the free market decides there are no productive jobs for these people?
SD: Then the gov’t will have to lower the huge expense of hiring people, so that their jobs will become productive, meaning worth the money the employer has to spend on them.
DA: What if the gov’t is too stubborn or too afraid to change the laws?
SD: Then we will have chronic high unemployment, like they do in Europe.
2. Why the Govt Can Only Create Parasitic Jobs.
DA: OK, you have made your first point, explaining that we want productive jobs and not parasitic jobs. But why do you say that the govt can only create parasitic jobs?
SD: First of all, because the govt itself is going to take most of the money set aside for any govt program, just as it does with all govt programs. The govt is a parasitic organization. For instance, say the govt taxes you a dollar to be charitable to the poor, meaning to give somebody a welfare check. That poor person will get 10 cents of your dollar, and the govt will pocket 90 cents. Same thing with medicare and medicaid. The doctor gets a dime, and the govt pockets 90 cents.
DA: That’s true, and very important. Politicians are crooks in the real world. But won’t a selfless govt of saints do better?
SD: They might not do harm on purpose, but even with the best intentions, they can only create parasitic jobs.
DA: And why is that?
SD: Because we live in a world where everyone is constantly trying to make a buck. If the govt has some idea for new jobs, a green energy company for example, rest assured that plenty of smart people have looked into the idea themselves way before the govt thought of it.
DA: So why didn’t they start that green energy company, if they already thought of it?
SD: Obviously, because they think it won’t make them any money. Which is the same as saying all the jobs in that company are parasitic.
DA: Now wait just a minute, Smiling Dave. Those companies are saving the environment, making green energy for us all. So what if they don’t turn a profit? that does not make them parasitic.
SD: Yes it does. Where does profit come from? Obviously, if you sell your product to people, and you got more in sales than you paid out in expenses. Now what does that tell you about your usefulness to society? It tells you that you have made something that people like so much, and find so useful, and want it so badly, that they were willing to pay good money for it. And so many people liked it so much that you made a profit.
DA: And if you lose money?
SD: That means you made stuff nobody wanted, and you wasted precious resources making it. In other words, no profits means the company, and everyone working for it, did not serve the public. On the contrary, the company was a parasite, using up resources for no good reason, and the workers were parasites, getting paid salaries in exchange for nothing useful.
DA: So if the private sector rejected the idea of this green energy company, that is because they saw it as parasitic.
SD: Exactly. Nobody wanted to invest in that company, which is why the company came crying to the govt for money.
DA: So that is why Solyndra went bankrupt!
SD: And that is why GM is going to go bankrupt as well. The govt is holding on to ownership of GM because nobody else wants to touch it. Because all the workers at GM as presently constituted are parasites.
DA: And that’s why every job the govt is going to create is a parasitic job, because otherwise the private sector would have created that job long ago.
3. Why Parasitic Jobs Are so Bad for the Economy.
DA: No need to be sarcastic, Dave. Let’s move on to the final topic. Why are parasitic jobs so bad for the economy?
SD: We mentioned it in passing earlier, so I’ll just restate it. People with parasitic jobs get pay checks, but do not produce anything in return, at least not enough to cover the cost of hiring them. Meaning they get to eat for free. Nice for them, but not very nice for whoever is feeding them. In fact it’s not very nice for the economy as a whole, meaning for everyone, because what the parasites eat is not replaced. After they spend their pay checks, there is less for everyone else. Contrast that with productive jobs, where the worker gets to eat only after he has been productive, meaning has been useful in some way, and in some way added to the pile of goodies.
DA: Dave, you worry me. Because everything you said here applies to jobs that will be created by QE3, and for the exact same reasons.
SD: Tell me about it.