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Boneheaded Economics

Magical thinking about jobs from liberal ­Democrats.

Oct 24, 2011, Vol. 17, No. 06 • By FRED BARNES
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It’s not just the Occupy Wall Street rabble who are promoting unorthodox ideas (to put it kindly) about our economic plight and how to create jobs. They have friends in Washington. A few examples:

Cartoon of donkeys dressed as witches with a brewing cauldron

Gary Locke

Barbara Lee, a House member from California, is upset about computerized checkout lines at grocery stores. She avoids lines with no flesh-and-blood checker. “I refuse to do that,” Lee said at a House Appropriations Committee hearing, “I know that’s a job or two or three that’s gone.”

Representative Jesse Jackson Jr. of Illinois is up in arms about the iPad, which he declared on the House floor recently is “now probably responsible for eliminating thousands of jobs.” Alas, “what becomes of bookstores and librarians and all the jobs associated with paper?” Quite soon, he said, “such jobs will simply not exist.”

House minority leader Nancy Pelosi has her own remedy for the jobs dearth: Extend unemployment benefits. “It injects demand into the economy,” she insists. “It creates jobs faster than almost any other initiative you can name.” It has the “double benefit” of putting money in the pockets of the jobless and acting as a “job creator.”

Representative Keith Ellison of Minnesota is the champion of job creation by adding to the regulatory burden of businesses. Sounds counter-productive, right? Not so, Ellison told MSNBC. Companies will have to hire more people to comply with new regs. “If the government says, look, we have got to reduce our carbon footprint, you will kick into gear a whole number of people that know how to do that or have ideas about that, and that will be a job engine,” Ellison said.

It shouldn’t surprise anyone that this type of talk comes from liberal Democrats. They’ve attached the jobs issue to the policies they’ve long supported. From all appearances, however, they genuinely believe these policies will accelerate growth in jobs. They’re oblivious to evidence to the contrary.

Democratic senator Barbara Boxer of California issued a report recently to the effect that rules promulgated by the Environmental Protection Agency generate jobs. “Industries that provide environmental protection” have begot more than one million jobs, the report said. What about industries that lost jobs because of EPA regulations? Forget it.

A skeptic might see this as a bit too convenient to be credible. The more regulations coming out of EPA, the more liberal Democrats swoon with delight. Republicans regard them as “job killers.”

And when a regulation is withdrawn or postponed, as was the case with the one limiting ozone emissions, the Boxer brigade protests. Paul Krugman, the New York Times columnist, echoed Ellison, claiming the ozone regulation would have boosted demand and created jobs.

But if regulations lead to greater employment, “the economy should be in danger of overheating right about now,” Investor’s Business Daily noted. The Obama administration has set a record for issuing the most regulations in the shortest period of time, yet unemployment is stuck at 9.1 percent and the economy flirts with dipping back into recession.

President Obama and Treasury secretary Tim Geithner have voiced sympathy with the Occupy Wall Street crowd, which is understandable from the political standpoint of a president seeking reelection. A distraction from his dismal record in Washington is a godsend for Obama. If Wall Street is chiefly to blame for the nation’s economic mess, he is off the hook.

Like the protesters, Obama has bizarre ideas about jobs. As best I can tell, he believes government-created jobs will lead to stronger economic growth. Thus the so-called “jobs bill” he’s currently touting. 

The president has his economics upside down. In real life, the only reliable way to produce permanent jobs is through private investment that increases economic growth. The point here, which has eluded Obama, is that growth comes first and jobs follow.

Obama’s scheme for making green energy competitive is also backwards. His cap and trade plan was designed to make conventional sources of energy—coal, oil, natural gas—more expensive and give nonfossil energy an advantage in the marketplace. Why wait for the green stuff to become competitive on its own and produce those five million green jobs the president has promised? That would take decades.

“Our economy needs a jolt,” Obama said in Pittsburgh last week. He isn’t keen on learning from experience. Every measure in his bill has been tried at least once, at his insistence, and failed to bring about a jobs-rich recovery.

How does he explain this? He doesn’t. Rather, he points to unnamed “independent economists” who’ve concluded his bill “would grow this economy and put people back to work. .  .  . And no other jobs plan,” he says, “has that kind of support from economists, no plan from Congress, no plan from anybody.”

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