This Under the Dome post represents the prevailing economic ignorance so dominant in our society – and among our politicians – today.
federal stimulus packaged called "Jobs Now," Rob Christensen reports.
"With every construction project that is beginning in North Carolina with the
federal money that we will have a sign up that says "Jobs Now," Gov. Beverly Perdue told a meeting of black
elected officials this morning in Raleigh.
"That is going to be the logo in North Carolina. We want people to know that
we are putting folks back to work," she said.
This reminds me of perhaps the most important lesson about economics, as first popularized by 19th century French economist Frederic Bastiat:
birth not only to an effect, but to a series of effects. Of these effects, the
first only is immediate; it manifests itself simultaneously with its cause – it
is seen. The others unfold in succession – they are not seen: it is well for us,
if they are foreseen. Between a good and a bad economist this constitutes the
whole difference – the one takes account of the visible effect; the other takes
account both of the effects which are seen, and also of those which it is
necessary to foresee.
It's easy to see the "Jobs Now" projects of government roads and bridges. But where does that money come from? What use would that money have been put toward if not taken by the government to finance their public works?
As Bastiat put it:
neglect to state also the destination which the taxpayer would have given, but
cannot now give, to the same. Then you will understand that a public enterprise
is a coin with two sides. Upon one is engraved a labourer at work, with this
device, that which is seen; on the other is a labourer out of work, with the
device, that which is not seen.
What signs will be given to the laborers put out of work because of a redirection of resources from the private sector to political ends? What signs will be given to those workers deprived of opportunity due to jobs never created because resources are tied up in public works?
Wow, we’re dressing up a frontal attack on any use of government funding with what amounts to a 19th century blog?
What bunk. What’s wrong with Bastiat? The entire 20th century history of America. The Rural Electrification Act, Tennessee Valley Authority, Work Projects Administration (Roosevelt) and Interstate Highways Act, National Defense Education Act (Eisenhower) all continue to pay HUGE dividends to the American people, as indeed does the Internet, which was developed with DARPA grants to universities and private industry.
EVERY nation on Earth that has prospered has had some sort of redistributive tax system for accomplishing and responding to needs that no private interest undertakes. When a city burns down, a fire company that responds only to well-heeled subscribers is not of much use!
In fact, public investments that reduce our energy dependence (such as insulating public and private buildings, installing solar heating, and retrofitting advanced lighting and HVAC systems) not only pay for themselves, but have been shown to promote prosperity in the towns that have made them. Permanently lowered costs for them means greater resilience and efficiency in an economic downturn.
In the current poisonously partisan political scene, where thoughtful solutions are attacked regardless of their merits, I will point out that Roosevelt was a Democrat and Eisenhower was a Republican, but both understood something that the knee-jerk government-bashers of today do not. Wise public investments in the American people, their education and their infrastructure have always paid off.
Now, please stop citing 19th century French claptrap as if it were an oracle. Do you plan your days by consulting Nostradamus? If not, try judging public policy options on the facts, not a handful of hackneyed doctrinaire suppositions. There is no magic guidebook to life. You’re supposed to THINK.
Alberto’s silly rant just makes the author’s point. Nowhere does Alberto consider the opportunity costs of all the government projects he lists. Which shows that he doesn’t understand what Bastiat’s lesson is all about. Alberto should take his own advice. Think.