Video of My CBS Interview on Where the Jobs Will Be

I was interviewed yesterday on CBS News in San Francisco about whether government can create jobs and the impact of another Obama administration on jobs. HERE is the link to that interview.

Obama's Plan Would Have Us Eat Our Seed Corn

It's unfortunate but most people's minds are not changed by intellectual analysis. Most people's opinions are more often changed by metaphor, images, and slogans.

My previous posts have used logical analysis and economic theory to explain my antipathy to Obama's unprecedented trillion-dollar spending package. In this post, I will use metaphor, an image (see right,) and a slogan:

We'd ridicule a farmer who'd eat his seed corn (the corn he uses to plant his crops.) Yet Obama's "stimulus" plan of bailouts for bad companies, overreaching credit card and mortgage holders, and tax increases (Yes, he WILL increase net taxation) would eat America's seed corn: the money that successful businesses use to hire new workers and develop new products, and the money that individuals use to buy things from good companies and to save/invest for their future.

Sure, short-term, Obama's stimulus package will create some jobs but when the seed corn of our tax dollars runs out, the jobs created by our tax dollars will wither away and our economy won't grow--Rather, America will become an ever less arable land.

So, the slogan? Don't Let Obama Eat Our Seed Corn!

Obama's Stimulus Spending Won't Stimulate Much

In Wednesday's, New York Times, University of Chicago economics professor Casey Mulligan argues that Obama's stimulus package in fact will create few new jobs.

For example, one of Obama's priority spending areas is health care. But there already is near full employment in health care. The U.S. has to import nurses from countries such as the Philippines to meet the current need. Indeed, health care is the one field that has increased employment during every month of the current recession. Spending more taxpayer money on health care will mainly just move health care workers from one employer to another--or result in importing more health care workers. It won't, as Obama promises, create many new jobs

Even in Obama-priority fields in which many jobs have been lost in the recession, for example, infrastructure construction, few jobs will be created by the Obama spending spree. Mulligan points out that many, although certainly not all, the workers laid off from residential construction have already picked up work in commercial construction. Too, much construction work is done by illegal immigrants, for whom Obama has promised to create a path to citizenship within his first 100 days in office. So, ironically, the largest stimulative effect of Obama's infrastructure spending may be to create jobs for illegal immigrants.

Mulligan additionally points out that while the large majority of the recession's job losses have been to men, Obama's economists report that half the jobs Obama will create will be aimed at women (and minorities.) So, many of those unemployed men will remain jobless. That is yet another reason why Obama's stimulus plan will not provide as many new jobs as he promises.

Of course, even more problematic is this question: "Where will the trillion dollars to pay for the unprecedentedly massive (and dubious) spending come from? "It will come from the taxpayers, who if instead, were allowed to keep their money would spend much of it on products and services, which would create real, new, enduring jobs. And of course, the Obama spending spree will also be funded by the tax dollars from successful businesses, which if instead were allowed to keep their money, would use much of it to expand their businesses and hire more people.

Sure, the Obama Spending Spree will yield a short-term boost in the economy by taking taxpayer money to create some (temporary) jobs, prop up badly run banks and car manufacturers, invest in private-sector-rejected alternative energy and other schemes, and bail out people who bought more home or took on more credit card debt than they could comfortably afford. But long term, that won't stimulate the economy. It will kill it.

It's only human to be tempted to bail out the most failing people and businesses but as every triage medic in the battlefield knows, you'll save more lives by using the limited resources to help those most likely to recover, not those who scream the loudest.

That means allowing successful people and businesses to keep their money, not have the government forcibly take it from them to give to the unsuccessful. Real, sustainable, enduring growth comes not from tax increases but from tax cuts.