Over at The American Spectator, I break down the debate over regulation’s impact on the job market and propose one regulation that could create countless jobs:
As everyone knows, winter is coming. And many of the nation’s least-employed states will see a lot of snow this year. Already, giant snowplows are beginning to traverse the highways and byways of Michigan, Ohio, and other states going through hard times. With these plows, one man can do the work of a hundred.
I say we ban snowplows and hand out some shovels.
Think about it for a minute. In Michigan alone, nearly 520,000 people are looking for a job and can’t find one. Tens of thousands of miles of roads zig and zag across the state. If this winter lives up to lofty Midwestern standards, it’s possible that every last one of those 520,000 could work at least part time clearing the way for their fellow citizens. And all because of regulation!
I do enjoy economic humor. Read the whole thing here.
Have a listen here.
In a speech tonight, President Obama is expected to announce the creation of a government infrastucture bank as part of his plan to reduce unemployment. Vice President for Policy Wayne Crews explains why it won’t work as planned, and offers an alternative idea: liberalization.
I’ve argued for a long time that stimulus bills are poorly named; it implies that they stimulate the economy. “Spending bill” is a non-loaded term that has the added advantage of being accurate. Both parties have passed spending bills over the years in the hopes of stimulating the economy. Intentions being different than results, Democrats are finally starting to agree with me on this misuse of language, as The Hill reports:
Democrats are now being careful to frame their job-creation agenda in language excluding references to any stimulus, even though their favored policies for ending the deepest recession since the Great Depression are largely the same.
The article continues:
Recognizing the unpopularity of the 2009 package, however, Democratic leaders have revised their message with less loaded language – “job creation” instead of “stimulus” and “Make it in America” in lieu of “Recovery Act” – in hopes of tackling the jobs crisis.
Spending bills work by taking some money out of the economy and then putting it back in, minus transaction costs and political malfeasance; one can see why they don’t have much effect. The thinking is that Congress can invest money more wisely than private investors. If Solyndra is any indicator, that isn’t true.
[click to continue…]
In California, a war is quietly being fought: workers versus technology. And the war has materialized in the form of a bill that seeks to ban the sale of alcohol by automated checkout machines at grocery stores. You may have seen them, those machines that allow customers to scan and bag their own items, which can speed up the process and keep lines smaller. Those machines also allow grocery store owners to reduce their costs by employing fewer workers. Herein lays the problem: workers fear that they are slowly being replaced by machines and that increased reliance on automatic check out machines threatens their jobs.
The legislation, AB 183, would ban the sale of alcohol at self-checkout aisles. The bill’s proponents drag out the old “save the children” argument, claiming that minors can easily purchase alcohol without the human oversight a traditional checkout process offers. Of course, the robots aren’t completely automated and require a worker to authorize any purchase that contains an age-restricted item such as alcohol. Additionally, the numbers of “sales to a minor” violations submitted by the state’s alcohol control board seem to indicate that most of these sales do not occur at grocery stores, but rather at liquor stores and in restaurants.
[click to continue…]
Have a listen here.
In a recent NBC interview, President Obama blamed ATMs for taking away bank tellers’ jobs, and computerized airline check-in kiosks for eliminating aviation jobs. Communications Coordinator Lee Doren points out that innovation doesn’t affect the number of jobs so much as the types of jobs. Accomplishing more while using less labor is actually the key to prosperity. People looking for an explanation for today’s high unemployment need to look elsewhere.
The economy may be slowly recovering, but that’s in spite of — not because of — the recent orgy of federal spending. Two economics professors, Tim Conley and Bill Dupor, concluded this month that the $800 billion stimulus package wiped out a million private-sector jobs, destroying a net 550,000 jobs. (The American Recovery and Reinvestment Act, also known as the stimulus package, created 450,000 government jobs, partly offsetting the million private-sector jobs it wiped out.) “The majority of destroyed/forestalled jobs were in growth industries,” they say.
The stimulus package was earlier criticized by many leading economics professors, like Harvard’s Jeffrey Miron, Robert Barro, and Martin Feldstein. Professor Barro called it “the worst bill that has been put forward since the 1930s.” Nobel laureates Gary Becker and Vernon Smith have also criticized it. 200 economists signed a statement publicly opposing the stimulus package.
While pushing the stimulus package through Congress, Obama cited claims by the Congressional Budget Office (CBO) that it would save jobs in the short run, while ignoring the CBO’s own conclusion that the stimulus package will actually shrink the economy over the long run, by increasing the national debt and thus crowding out private investment. Contrary to the CBO’s findings, Obama claimed that “irreversible decline” would occur if the stimulus was not enacted into law.
Obama has run up the largest budget deficits in history, running monthly deficits that are bigger than Bush’s entire annual deficit for 2007, after the economy started to go south.
In The Wall Street Journal, economists John F. Cogan and John B. Taylor argue that the impact of the $800 billion “Obama stimulus” was “zero” in terms of increasing economic growth.
I think its impact was less than zero — that it actually shrank the economy in several ways. One way was its use of “green jobs” subsidies to send American jobs overseas: 79 percent of the subsidies went to foreign firms, such as an Australian firm that imported Japanese wind turbines. Another was how it wiped out jobs in America’s export sector.
But it’s good to see more economists demonstrating that Obama was wrong when he claimed that economists support his stimulus package. In 2009, 200 economists signed a statement publicly opposing the stimulus package in an ad published in The Washington Post and New York Times. The “‘stimulus’ is not the road to economic recovery. It’s the problem, not the solution, wrote Nobel laureate economist Vernon L. Smith.”
Even the Congressional Budget Office admitted that the stimulus package would shrink the economy in the “long run” by driving up the national debt and thus crowding out private investment through increased debt-service costs.
My colleague Ben Lieberman’s thoughtful op-ed in The Washington Times focuses on voters’ rejection of environmental alarmism about the Gulf oil spill. It appears that voters discounted the exaggerated claims of Gulf devastation and were more concerned instead about the moratorium on offshore drilling and its devastating effect on jobs. With a faltering economy, voters didn’t appreciate the Administration’s job-killing over-reaction.
As Lieberman said:
“For a while, it was fashionable to ridicule those who had chanted “Drill, baby, drill” during the 2008 race. Opponents of domestic drilling thought they had a defining issue heading into the midterms.
“Now the “Drill, baby, drill” crowd is back – and they’ll be returning to Washington with quite a few new allies.
“Ironically, it was not the spill itself but Mr. Obama‘s overreaction to it in the form of a job-killing moratorium on offshore drilling that really angered voters in Louisiana and other impacted states. The only reason the Obamatorium didn’t hurt Democratic candidates along the Gulf was that they were just as vocal as Republicans in their opposition to it.”
And he has some words of caution for policymakers who would try to ram through energy-restrictive policies:
So what does all of this tell us about voters? For one thing, it shows that they are getting wise to environmentalist alarmism and exaggeration. Just as the drumbeat of doom-and-gloom predictions about global warming didn’t generate public support for “cap-and-trade,” neither did overblown claims of oil-spill-induced ecological devastation create a backlash against offshore drilling. And given the still-struggling economy and stubbornly high unemployment, the electorate is not going to accept costly solutions to overstated threats.
Unemployment averaged about 5.2 percent under both Clinton and Bush, but rose to an average of 9.43 percent under Obama (the current rate is at least 9.6 percent, and may rise to over 10 percent next year). See this graph. The unemployment rate began rising in 2007, after House Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Harry Reid (D-Nev.) took charge of Congress (their control of Congress led to massive increases in federal spending). It rose further after passage of the $800 billion stimulus package under Obama. 48 out of 50 states have lost jobs since passage of the stimulus package. The Obama administration mistakenly said the stimulus would keep unemployment under 8 percent.
As noted earlier, the stimulus package contained wasteful “green jobs” funding, 79 percent of which went to foreign firms, effectively sending American jobs overseas. A recent biofuel program actually wiped out jobs rather than creating them as intended, while costing taxpayers a lot of money. New EPA rules are expected to wipe out at least 800,000 jobs, and the EPA is considering new ozone rules that could wipe out 7.3 million jobs. The stimulus package contained provisions that wiped out thousands of jobs in America’s export sector. New laws backed by Obama, and Obama Administration regulations governing employers, have discouraged employers from hiring new employees.
RSS Updates 
RSS E-Mail Updates 
Twitter 
Facebook 
CEI.org 
WorkPlaceChoice.org 
GlobalWarming.org 
CEI On Demand Video 
Liberty Week Podcast 