The Locker Room

Getting government out of the way

Posted by Mitch Kokai at 06:53 AM

The headline of TIME’s latest cover story promises to explain “How to Create a Job.” The subheadline explains that getting back 8.4 million lost jobs “means understanding what makes the economy tick.” (You’ll find the same article online with a different headline here.)

Writer Barbara Kiviat demonstrates that she has at least a great understanding of the economy than those in Washington who approved a “jobs package.”

President Barack Obama, in his State of the Union address, called jobs his "No. 1 focus" and proposed repurposing bank-bailout money to lend more to small businesses, which would then, presumably, generate jobs. On March 17, Congress passed a job-creation bill that includes, among other things, an estimated $13 billion worth of tax incentives to coax companies into adding to their payrolls.

The cold truth of the matter, though, is that there's not much Washington can do to gin up permanent jobs on such short notice. The federal government is a key player in engendering job growth in the long term — by establishing smart policy in areas such as trade, education, immigration, health care, energy, infrastructure and taxes — but over the course of months or even a few years, there's little it can effectively do besides hiring directly or stepping in as a buyer of goods and services.

Kiviat does not mention that government hiring and purchasing require taking resources out of the private sector — resources that could have created jobs to serve actual consumer demand.

In considering the proper role of government in creating a job, one is tempted to turn to the same seven-word recommendation George Will recently offered to the group looking for deficit-reduction measures: “Stop doing almost everything you are doing.”

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