Know your role
It’s not the government’s job to create jobs
- Thursday, February 5, 2009
Have you ever been driving with one of those dreaded backseat drivers?
"Turn left! Turn left!" "Wouldn't it have been faster to go through town?" Horrified gasp and foot hitting an imaginary brake as a car turns into the roadway 300 yards in front of you.
While backseat drivers' advice might be well intentioned, it drives us crazy. If you're not driving, your responsibility is to entertain the kids or enjoy the scenery, not try and do the driver's job for him.
In the same way, it is individuals' and businesses' role to create jobs, not the government's. Government's job is to fairly enforce laws, not to pick the winners and losers in an economy or a job market.
That doesn't stop politicians like Assembly Speaker Barbara Buckley from trying, though.
In her Legislative Session Opening Day address, Speaker Buckley said, "People I have talked to all over the state are terrified of losing their jobs. In better times, when we clung to the illusion that our state was recession-proof, we never worried about coping with a 9 percent unemployment rate. Job creation must be one of our top priorities."
Job creation shouldn't be a top priority—or a priority at all—for Nevada's politicians. Creating jobs isn't the duty of the state or federal government. If you're not so sure, just google Nevada's Constitution. Good luck finding the part where it talks about the inalienable rights to life, liberty and being employed.
Government and politicians like Speaker Buckley have an important role to play. It's their responsibility to make laws, fund basic services and choose the state bug.
There are also three practical reasons why the government should only employ people to fulfill its basic functions and shouldn't attempt to create jobs. First, every dollar Nevada's government spends comes, by way of taxation, from the state's residents or from tourists. So when the state takes more, the rest of us have less.
As George Mason University economics professor Dr. Richard Wagner wrote recently, "Whether government finances its added spending by increasing taxes, by borrowing, or by inflating the currency, the added spending will be offset by reduced private spending. Furthermore, private spending is generally more efficient than the government spending that would replace it because people act more carefully when they spend their own money than when they spend other people's money."
Dr. Wagner also identifies the second reason why government shouldn't try to create jobs: Government tends to be highly wasteful.
Now, wasteful spending occurs in both the government sector and the private sector. The difference is that a wasteful business has to face competition from other businesses. If another business can operate more efficiently, and offer similar services at a better price, it will force its wasteful competitors to either reform or go out of business. The government, however, often faces no competition, and it's therefore not surprising that waste and corruption thrive within government.
The third reason is that job creation should not be treated as a goal on its own. Everyone in the state could be employed tomorrow if politicians simply passed a law requiring all unemployed persons to go to work digging holes with shovels, spoons or their fingers on one day, and filling the holes the next.
Nevada would have full employment, but so what? A job isn't an end in itself. It is a means to an end. Private-sector jobs create wealth—a product or a service that someone else values enough to exchange cash for it. The producer then takes the money he has earned and uses it to purchase products or services he values. If everyone is digging and filling holes, we have full employment. But no wealth is being created.
So while Nevadans may appreciate Speaker Buckley's sympathy, the way for her to really help is not through "job creation." When the government tries to take on the role of private industry, confusion ensues and poor decisions often get made—just like when a backseat driver shouts directions.
Instead, we should keep government in the background where it belongs, and let private individuals and businesses—the drivers of our free-market economy—create the jobs.
Victor Joecks is the deputy communications director at the Nevada Policy Research Institute.