Friday, January 29, 2010

Yes, government creates jobs

Erick Erickson at the right-wing blog Red State made Keith Olberman's "worst person in the world" list Thursday night, but what he rants here is far worse:
After reflection on Barack Obama’s State of the Union address, I am left with one overarching conclusion... Barack Obama’s State of the Union address was a declaration of war on the free market.

Barack Obama said, “Now, the true engine of job creation in this country will always be America’s businesses.”

But prior to that, he said, “Because of the steps we took, there are about two million Americans working right now who would otherwise be unemployed. 200,000 work in construction and clean energy. 300,000 are teachers and other education workers. Tens of thousands are cops, firefighters, correctional officers, and first responders. And we are on track to add another one and a half million jobs to this total by the end of the year.”

Review the list. Every job listed is either a government job or a job so connected to government that it would not exist but for government. The clean energy industry? It would not exist, but for government subsidy. Construction? He is talking about roads and other infrastructure — jobs that will go away once the project is done and the whole way through is dependent on the government.

All of these are government jobs.

Hmmm, yes, it's bad to create government jobs - a war on the free market even. Jobs like firefighters, teachers, police officers, scientists. Everyone knows correctional officers and first responders are the bulwark of socialism.

Here's a question for Erickson: Without these government jobs, who will protect private property from fire and theft? Who will teach our children to invent the technologies and build the companies that create jobs 10-20 years from now? Private companies are the engine of growth, but government is the foundation.

There are few left in the GOP who understand such ideas, simple though they be. Since purging intellectuals from the party, the GOP has lived in a magical fantasy land in which businesses will solve all our problems, if only the government would get out of the way. The base has descended into boorish binaries: that Government and Business are opposing forces and never partners, that everything good comes from the private sector and government action always kills growth. If an infant industry depends on government support, it must be a war against the free market; since the market is always perfect, the government is stopping it from finding more efficient uses for capital.

For example, Erickson bashes the clean energy industry because "it would not exist, but for government subsidy." But can he name a single industry created in the last 100 years that was not jump-started by government subsidy, research, protection, or infrastructure? The automotive industry could not have gotten rolling without government-built roads. Power lines and water pipes would not have been laid without government backing up private investment. Today's high-tech firms would not exist even in our imaginations were it not for the government-created Internet. Indeed for almost any tech firm around today, its latest top-selling technologies stand on the shoulders of discoveries made 20-30 years before in government-funded research labs - research which would never be funded by private capital because the payoff is too uncertain and far away.

And just what does Erickson think will happen to American business when our infrastructure crumbles to the point that goods can't move quickly across the country? After all, the federal government subsidized the railways and built the interstate highways. Maybe infrastructure jobs wouldn't exist "but for government subsidy," but they're the lifeblood of commerce.

The bottom line is, government and business need each other. The way the economy works is that the government lays the foundation upon which private companies build, and corrects externalities that result from market breakdowns. Government-employed police officers allow businesses to operate without fear of theft or intimidation. Government regulators enforce property rights that allow investors to create jobs without fear that their investments will be damaged by others (Republicans ostensibly support property rights, but they aren't doing much to protect my property right to a clean atmosphere). Government-subsidized hospitals help the working poor get better and get back to work. Government-employed teachers educate tomorrow's inventors and job-creators, while government scientists conduct crucial basic research - research that's not commercializable on any kind of investment time frame, but which lays the groundwork for the next 50 years of growth. And yes, government environmental regulations prevent companies from dumping waste into our drinking water and polluting our air - kindof important services, don't you think?

This is the narrative liberals need to tell, the counter to the brutish but intuitive thinking of "taxes bad, regulation bad, markets good." Low taxes increase profits on iPads and iPhones, but it took government-educated brains to create them.

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