Government Job Creation Kills Real Jobs

by | Mar 28, 2012

President Obama has long told us that “green” energy would create thousands of jobs. His administration has “invested” billions of tax dollars in a myriad of “green” industries. Predictably, the results have been the opposite of what we were promised. As one example, a story in the Houston Chronicle tells us: A123 Systems, a battery […]

President Obama has long told us that “green” energy would create thousands of jobs. His administration has “invested” billions of tax dollars in a myriad of “green” industries. Predictably, the results have been the opposite of what we were promised. As one example, a story in the Houston Chronicle tells us:

A123 Systems, a battery maker that received $380  million in government support, said recently that declining orders had forced layoffs. Instead of up to 3,000 new Michigan jobs as Obama and the company had predicted, it now has 690 employees.

A123 Systems is hardly alone:

Johnson Controls, which received a $299 million stimulus grant, opted to build one factory instead of two because of lower-than-projected demand…

California electric car maker Aptera announced it was shutting its doors because of problems raising capital. And General Motors – whose moderately priced Volt was supposed to drive Obama’s push for 1 million alternative vehicles by 2015 – revealed last week that it would fall roughly 38 percent shy of its goal of selling 10,000 Volts this year.

In other words, despite Obama’s promises, tax payers have been forced to pour billions of dollars down the sewer. But these boondoggles are only a part of the story.

While the President is making unfulfilled promises about he creating jobs, his policies are actually killing jobs. Obama is paying for these “investments” by taking money from productive individuals and businesses. He is seizing the wealth of those who know how to produce and giving handouts to his political cronies.

Of course, “green” energy isn’t the President’s only solution for creating jobs. He has also repeatedly told us that “investing” in infrastructure will create jobs:

So investing in our infrastructure is something that members of both political parties have always supported.  It’s something that groups ranging from the Chamber of Commerce to the AFL-CIO support today.  And by making these investments across the country, we won’t just make our economy run better over the long haul — we will create good, middle-class jobs right now.

Henry Hazlitt long ago pointed out the fallacy underlying such claims.

There is no more persistent and influential faith in the world today than the faith in government spending. Everywhere government spending is presented as a panacea for all of our economic ills.

Hazlitt went on to explain that government spending must eventually be paid for through taxes, inflation, or both. And the money taken from taxpayers, including business owners and corporations, is money that they would have spent on other items—items of their own choosing, rather than those mandated by politicians. Hazlitt concluded

Therefore, for every public job created by the bridge project a private job has been destroyed somewhere else.

Of course, the temporary jobs that Obama “creates” through his various interventions are highly visible. Both Obama and the media make certain that we hear about all of the jobs that will result. What we don’t see or hear are the jobs that are destroyed in the process. We don’t hear about the small business owner who can’t expand because of his tax burden. We don’t hear about the manufacturing company that must close its doors because it can’t compete against companies receiving massive government subsidies.

The fact is, government cannot create productive jobs. The fact is, if alternative energy sources were commercially viable, greedy capitalists would be investing in them in the hope of becoming stinking rich. John Rockefeller didn’t need government subsidies to become the richest man in the world. All he needed was the freedom to act on his own judgment.

When a businessman makes a poor decision, only he and those who voluntarily invested with him suffer. When a government official makes a bad business decision, all of us pay. As A123 Systems, Solyndra, Range Fuels, Johnson Controls, and countless other examples demonstrate, government officials frequently make bad decisions. And, when they do, they can simply waddle over to the public trough, seize more money from you and me, and make another series of promises.

Contrary to what the President has said, this isn’t about picking winners and losers. The government simply shouldn’t be involved in the economy. The government’s only proper and moral purpose is the protection of individual rights, including property rights. When individuals are free to act on their own judgment, they produce the values that we all need and desire. Productive individuals do more than create the values we want; they also create the jobs that Presidents promise, but never deliver.

Brian Phillips is the founder of the Texas Institute for Property Rights. Brian has been defending property rights for nearly thirty years. He played a key role in defeating zoning in Houston, Texas, and in Hobbs, New Mexico. He is the author of three books: Individual Rights and Government Wrongs, The Innovator Versus the Collective, and Principles and Property Rights. Visit his website at texasipr.com.

The views expressed above represent those of the author and do not necessarily represent the views of the editors and publishers of Capitalism Magazine. Capitalism Magazine sometimes publishes articles we disagree with because we think the article provides information, or a contrasting point of view, that may be of value to our readers.

Have a comment?

Post your response in our Capitalism Community on X.

Related articles

Why Even Insiders Underestimate Markets’ Power

Why Even Insiders Underestimate Markets’ Power

Anyone who has ever taken a competently taught economic principles course should understand why people tend to underestimate market forces for airline fuel, irrigation water, and so many other areas.

No spam. Unsubscribe anytime.

Pin It on Pinterest