From HuffPo:
…DPW has received $70.65 million and created or retained 45.46 jobs, though they are expected to create 238 jobs overall (the fraction of a job created or retained correlates to the number of actual hours works). LADOT has been awarded $40.8 million and created or retained 9 jobs, though they are expected to create 26 jobs overall. Overall, the Departments have received $111 million in federal stimulus funds out of the $594 million the City has been awarded so far and created or retained 54.46 jobs…
Government cannot actually create jobs, it can only spend money. Jobs are created when wealth is created – when a new factory comes on line, a mine opens up, or a field is plowed. If you’re not doing one of those three things, or at least supporting directly those actions, then all you’re doing is expending wealth with no return. The “jobs” for $111 million just represent a net reduction of national wealth.
It is worthwhile to remember that aside from a few who have absorbed the teachings of Hayek, the people who run our economy and government have all been taught that it was government spending and regulation which got us out of the Great Depression, and will work like magic any time the economy slumps. They are not taught this as a debatable idea: they go through primary school, college and graduate school with this concept being related as if it is a scientific fact.
The reality is that the New Deal not only didn’t cure the Depression, but made it worse. To get a clear picture, one must actually take a step back from the New Deal – two steps, actually, because you have to go back before Hoover. Hoover was just FDR-lite. He taxed and spent like mad to try and cure the economic slump signaled by the stock market crash of 1929. FDR just doubled (or, more accurately, tripled) down and spent and taxed even more.
The underlying basis of the acceptance of these moves was a conviction that the crash and slump were the result of a fundamental flaw in free market economics. That the real cause of the crash was a simply lack of demand brought about by the world missing 20 million people who would have been in their peak consumption and production years entirely escaped contemporary observers (the crash happened just shy of 11 years after the end of WWI, which took 10 million lives, and the “Spanish ‘flu” which took another 10 and perhaps as many as 20 million lives…the lives lost in these disasters were primarily younger people). A simple adjustment was necessary – and it was happening, a bit brutally, in an economic slide…which would have ended in a couple years once equilibrium was established, and then growth could have resumed. Around the world, government intervention was instigated, and everything simply went all to heck (getting out of the Depression was not caused by WWII – it was caused by the massive post-war population boom which stimulated global demand to such a point that even an over-taxed and regulated economy could prosper…until the population boom wore off towards the end of the 1960’s).
Because we are locked in to what amounts to an economic lie, we see things like this astounding $111 million for 54 “jobs”. The Powers That Be are doing what they have been instructed to do – they can do no other, because they don’t even suspect there is a different way. Only a complete sweep of the dead economics of the past 80 years will allow us to get out of this. A return to sound money, balanced budgets and low taxes is the cure for what ails us..and its just a tragedy that it will have to wait, at least, until Obama is out of office before we can even start the ball rolling in a meaningful way.
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