creators.com opinion web
Liberal Opinion Conservative Opinion
John Stossel
John Stossel
16 Apr 2014
Earth Daze

"The heavens reek, the waters below are foul ... we are in a crisis of survival." That's how Walter Cronkite … Read More.

9 Apr 2014
Taxing Life Away

It's tax time. I'm too scared to do my taxes. I'm sure I'll get something wrong and my enemies in government … Read More.

2 Apr 2014
Gambling and Government

Did you fill out a March Madness bracket this year? In many states, if you put money in a pool, that's illegal! … Read More.

The Economy Needs No Conductor

Comment

We spend too much time waiting for orders — and money — from Washington.

The collapse of the housing bubble gave politicians a license to do what they wanted to do all along: spend. The usual checks on extravagance, weak as they are, were washed away. Budgets? We'll worry about that later. Inflation? We'll worry about that later.

As I point out in my brand new book, "No, We Can't: Why Government Fails — and Individuals Succeed," a true free market doesn't require much. It's not like an orchestra in need of a conductor. What it needs is property rights, so no one can take your stuff. Then people trade property to their mutual advantage. Resources move around without the need for a central, coercive government telling people which resources should go where — or telling them that they must get permission to do what they think is advantageous.

Given time, an economy, unless crippled by further government intervention, will regenerate itself. But during the recession, Keynesians in the administration said government had to "jump-start" the economy because businesses weren't hiring. An economy, however, is not a machine that needs jump-starting. It is people who have objectives they want to achieve.

If the economy continues to recover, President Obama will claim he caused that. It wouldn't be the first time a "leader" ran in front of a crowd and claimed to have led the way. But politicians don't deserve credit for what free people do.

Despite politicians' talk of "giving" money to this or that (remember those tax rebate checks with President George W. Bush's name emblazoned on them?), government has no money of its own. It has to take it from the private sector. Grabbing those scarce resources stifles the real economy.

One of the most important questions in politics should be: "Would the private sector have done better things with that money?"

A healthy economy does not just create jobs of any kind, it creates productive jobs. The pharaohs of ancient Egypt created plenty of jobs building pyramids, but who knows how much better the lives of ancient Egyptians (especially the slaves) might have been had they been free to engage in other work? They would all have had better housing, more food or snazzier headdresses.

Even as smart a person as economist John Maynard Keynes seemed to forget about that when he wrote in his "General Theory" back in 1936, "Pyramid-building, earthquakes, even wars may serve to increase wealth."

By that logic, government could create full employment tomorrow by outlawing machines. Think of all the work there'd be to do then!

Think about the two other methods to "increase wealth" that Keynes lumped in with pyramid-building: earthquakes and war. Now, sure, after a war or earthquake, there's plenty of construction to be done. After the Haitian earthquake, Nancy Pelosi actually said, "I think that this can be an opportunity for a real boom economy in Haiti." New York Times columnist Paul Krugman made a similar error. On CNN, he said if "space aliens were planning to attack and we needed a massive buildup to counter the space alien threat ... this slump would be over in 18 months." Before that, he said the 9/11 attacks would be good for the economy.

This is Keynesian cluelessness at its worst.

Isn't it obvious that without a catastrophe those same workers and resources could have done productive work — with the overall standard of living higher as a result? There is something wrong with mainstream politics and economics when some of its most respected practitioners overlook this point.

The economic philosopher Frederic Bastiat called their mistake the "broken window fallacy." If I break your window, it's easy to see that I gave work to a glass-maker. But what we don't see is this: You would have improved your circumstances with the money you paid the glass-maker. He merely restored your previous condition. That money could have created different jobs, perhaps more productive ones. They're unseen.

People favor government projects because they notice the seen, not the unseen.

Creating jobs is not difficult for government. What is difficult is creating jobs that produce wealth.

The private sector does that.

John Stossel is host of "Stossel" on the Fox Business Network. He's the author of "Give Me a Break" and of "Myth, Lies, and Downright Stupidity." To find out more about John Stossel, visit his site at <a href="http://www.johnstossel.com" <http://www.johnstossel.com>>johnstossel.com</a>. To read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at www.creators.com.

COPYRIGHT 2012 BY JFS PRODUCTIONS, INC.

DISTRIBUTED BY CREATORS.COM



Comments

1 Comments | Post Comment
A lot of money is made by
The books that bash the government.
The authors sell the reasons why
Buying their books is cash well spent.
Freedom of press is rarely free.
It comes and goes with some price tag.
The gov be bashing wannabe
Has fingers in the money bag.
As government grows more and more,
Its bashers will be less and less.
There'll be government jobs galore
Out to punish the unfree press.

So bashers sell your bashing now.
Gov's got its sights on you - and how!
Comment: #1
Posted by: Ima Ryma
Tue Apr 17, 2012 11:37 PM
Already have an account? Log in.
New Account  
Your Name:
Your E-mail:
Your Password:
Confirm Your Password:

Please allow a few minutes for your comment to be posted.

Enter the numbers to the right:  
Creators.com comments policy
More
John Stossel
Apr. `14
Su Mo Tu We Th Fr Sa
30 31 1 2 3 4 5
6 7 8 9 10 11 12
13 14 15 16 17 18 19
20 21 22 23 24 25 26
27 28 29 30 1 2 3
About the author About the author
Write the author Write the author
Printer friendly format Printer friendly format
Email to friend Email to friend
View by Month
David Limbaugh
David LimbaughUpdated 18 Apr 2014
David Harsanyi
David HarsanyiUpdated 18 Apr 2014
Larry Elder
Larry ElderUpdated 17 Apr 2014

8 Dec 2010 Why Do the Poor Stay Poor?

27 Feb 2008 Guns Save Lives

27 Apr 2011 Government Creates Poverty