I suppose if you hear a lie often enough, especially if it is never contradicted, you can be forgiven if you finally come to believe that it’s true. That tactic certainly appears to be working well for the Republican Party as it closes in on a large, if not gigantic, election night in a few weeks.
Republicans have run a few lies very effectively for the last year and a half, and the one that has become almost a mantra is slowly being accepted, even by those whose own experience should tell them it’s a lie.
“No government program ever created a single job,” is the lie that has become an accepted economic truism throughout the country. And, of course, it isn’t true. In fact, it isn’t even close to being true, and you don’t have to have a Harvard MBA, as does our former president, to know it isn’t true.
Rather, all you have to have is a job as a fire-fighter or a law enforcement officer or a sanitation worker or a school teacher to know that government programs absolutely create jobs. Or you could have one of the three million jobs in the military branches of our armed forces (either in uniform or in a civilian capacity) to know the same thing.
In fact, everyone who works in the semi-private U.S. Postal Service or at the U.S. Department of Agriculture or for the Occupational Safety and Health Administration or on a state or federal highway (toll collectors, maintenance workers, clerical personnel) is holding down a job that was created by a government program. And that is just the tip of the iceberg when it comes to jobs created by government programs.
But to hard core conservatives and their tea party compatriots, many of those jobs are sullied by the fact that they are paid for with taxpayer dollars. So let’s reflect on the number of private sector jobs (meaning jobs that represent employment by privately-owned companies) that are also created by government programs.
For openers, consider the military-industrial complex, as accurately identified by Dwight Eisenhower in his last year as president. The industrial part of that duopoly is well represented by the aeronautics industry and by munitions factories and by the companies whose sole business is to build the transport vehicles that move our combat forces in battle.
But might the war-making function of the federal government and the programs adopted pursuant to it be the exception that proves the rule? Not hardly.
Consider for a moment the textbook publishers or the soft drink companies that provide the text books and soft drinks to our public schools. Or the pharmaceutical companies that produce the drugs that are provided to Medicare patients. Or the chemical companies that produce the pesticides that local governments order to be sprayed to save croplands from infestation.
Still not convinced? What about the private contractors who secure government contracts to repair bridges and roads? Are the workers in those companies, all receiving private industry paychecks, also not representative of jobs created by government programs? Would those roads and bridges have been repaired in the absence of a government program?
Okay, so I think, even bereft of a Harvard MBA, I’ve exposed this big lie for what it is. Now let me try to divine just why it is that this Republican mantra has been so effective with the electorate this year.
Several factors are at play, and not the least of them is the total ineptitude of President Obama and his economic team to explain why government stimulus of the economy is exactly the right thing to do in times of economic recession.
If, indeed, as the above examples clearly prove, government programs can and do create jobs, then what role can and should government play when the private sector is unable or unwilling to do the same? And the answer (again, no Harvard MBA required) is to enact programs that will create jobs.
Amazing things happen to an economy when people are working and receiving a paycheck, irrespective of where that paycheck comes from. The earners of those paychecks spend the dollars they earn.
They spend it on necessities first, of course—food, clothing, shelter—but even money spent on those items will have a ripple effect. If more food is purchased at the local super market, more employees are needed to stock the food and collect the money from the purchasers of the food.
But, of course, wage earners go beyond the basics; it’s one of the benefits of being a wage earner. And so, they take their families to the movies, or they go bowling, or they take in a ballgame, or they install a cable TV system, or they take a vacation. And, guess what? All of these purchases also have a ripple effect. And so, as more money flows, more jobs are created.
Simple enough? Why then did the massive amount of money spent by the Obama administration fail to rescue the flailing U.S. economy?
First of all, it didn’t fail. To the extent that another Great Depression was avoided, the TARP, initiated by the Bush administration, and Obama’s stimulus package, and the bailouts of the auto and financial industries most definitely did rescue the slide toward depression the U.S. economy was on.
But it didn’t do more because it wasn’t big enough. In fact, of the $787 billion in the stimulus package that barely passed through Congress in Obama’s first year, less than a third went to real job creating programs (“shovel-ready” infrastructure projects being the most obvious). The rest went to local governments (there largely to be used to pay down debt) and to the minimal tax rebates that were frittered away in the span of several months.
So here are the lessons to be learned from this little primer: first, government programs can and do create jobs; second, federal spending on job-creating programs has been too small, not too big; and third, conservatives lie about these first two points because they hate governments, even those that are trying to save the very system they love.
Oh Ed, there you go again, huffing and puffing to blow away a “Republican” argument in the form of a straw proposition that no rational person would defend. If you have actually heard a Republican say that “NO government program EVER created a SINGLE job,” I seriously doubt that the speaker intended the remark as literally as you have taken it. More likely, it was a short-hand comment that jobs created by massive government programs tend to be a zero sum game at best; money for government jobs is taken from the private sector, which creates jobs more efficiently. This is what I hear Republicans saying. And it is no lie.
Speaking of lies, Larry Summers assurred us that Obama’ $814 billion stimulus would have a 1.5 “multiplier” effect on GDP growth, which is now flowing at a treacle of 1.6%. Christina Romer and Jared Bernstein promised that the stimulus would keep unemployment below 5%. Of course, unemployment rose and is holding at a flat 9.6%. Technically, Ed, you avoid the lie that the stimulus has worked by arguing that it would work if only we spent even more, and technically, no one can prove you wrong. But I hope you can understand how the veracity of your argument is not self-evident to anyone but the most dogmatic Keynesian. Indeed, to anyone going by the numbers, you (and perhaps Paul Krugman) look like you want to throw good money after bad–that is, if one still has enough faith in U. S. currency to believe that anyone’s money is good.
Your illustrations of the ripple effects government spending is supposed to create ironically point to the problem. Milton Friedman thought that individuals make their decisions about consumption by looking at their likely income and wealth far into the future. A government that engages in huge spending programs today makes consumers wary of the future, which will bring high taxes and inflation. The “permanent income hypothesis” thus undercuts the most laudable Keynesian projections because people do not want what Keynesians want them to want–at least not when they are supposed to want it. I am not asking you to affirm Milton Friedman, or even to read his books. But I wish you were better at acknowledging the good faith of those who oppose your position.
It bothers me that you are so quick to brand economic conservatives as liars. Liberals often appear to think the truth of their arguments are self-evident, and so anyone who opposes them must be stupid or evil. Liberals often appear extremely sensitive to the potential evil of corporations, but are oblivious to the greater potential for evil when good people think they can use government to solve too many problems. Conservatives see the world differently. It is not a question of good faith.
The same arguments were raised by economic conservatives in 1932 when FDR initiated a national workfare program that saved the country from economic obliteration. They were raised in the 1950s when Eisenhower joined forces with Democrats to build a national highway system that still provides hundreds of thousands of jobs 50 years later. They were raised by Milton Friedman in the 1960s when Lyndon Johnson pushed the Great Society through Congress. They were raised in the 1970s when Richard Nixon imposed wage and price controls on the entire nation to halt inflation.
In each instance, the conservative economists decried the intrusion of government, claiming it would destroy the country’s economic viability or worse.
Let’s at least agree that the sky never did fall when any of those separate calamities befell the country, nor did it fall from the collective weight of all of them.
We’re all entitled to our view of what is best for the country. But some views are backed by history; others are just misguided, notwithstanding the good faith of those who hold them.