Jobs In A Free Country

I. The Myth of Job Security

From naïve cinematic sentiment to official public ideology is unfortunately not that big a leap. Once during the New Hampshire primaries, former President Bill Clinton was stumping with a speech part of which was aired on National Public Radio. The president took many of his lines from the funny Kevin Kline movie "Dave." In it, the fictional presidential stand-in, played by Kline, proclaims his intention of securing a job for everyone in the country.

A few years later President George W. Bush was making a similar pledge in his acceptance speech at the 2004 Republican National Convention. "To create more jobs in America, America must be the best place in the world to do business. To create jobs, my plan will encourage investment and expansion by restraining federal spending, reducing regulation and making the tax relief permanent. To create jobs, we will make our country less dependent on foreign sources of energy. To create jobs, we will expand trade and level the playing field to sell American goods and services across the globe."

There is, in fact, no way for Clinton, Bush or any other politician to literally "create jobs," not, at least, without also destroying them. All a government can do is reduce obstacles to economic growth, to investment and entrepreneurship. Arguably, government is in fact the main obstacle to the creation of jobs, by way of its taxation and regulation, and protectionism. When taxes are levied, people have less to spend, and this means companies need fewer workers to create the smaller amount of goods and services that customers can now afford to purchase. When regulations are imposed, enormous amounts of money are spent by government on carrying out this regulatory function − with huge staffs, massive overhead, and the unrelenting intrusiveness that treats economic agents as if they were guilty without any proof of having done anyone any harm at all. And firms must employ teams of attorneys and human resources staff with which to cope with such regulations, either complying with them or dodging them as best they can. All this is a dead weight on the economy.

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