This post is going to attempt to tie together commentary of FDR, Green Jobs, the Michigan 21st Century Investment Fund, and Jeff Daniels... I hope it makes sense.
As a teacher, I always become annoyed when students repeat the myth that FDR saved us from the Great Depression. It is now such a widely accepted myth that when I voice my doubts, the students think that I must be joking. It is like claiming the world is flat they think- after all, look at all the jobs that FDR created to fight the Great Depression. Look at all the never-done-before government actions, and the massive expansions in federal power that he shoved through during an unprecedented 4 terms in office. Surely he saved us, because after all, massive government action must be good, right?
Wrong. It is a myth that FDR saved us from the Great Depression. Excellent information this can be found in the essay Great Myths of the Great Depression. In fact, FDR's New Deal program was an economic failure that likely stretched a usual downturn in the economy (albeit a bad sharp one) into a depression that the US did not truly emerge from until after FDR was dead. Roosevelt’s formula of substituting government programs for a normal business recovery did not create the high unemployment. FDR's idea of extracting tax dollars from individuals and corporations to fund government programs such as the Works Progress Administration (WPA) was a bad idea. The WPA hired workers to pick up trash, cut down trees, and build roads, bridges, and schools- but even though the government was 'creating jobs,' in reality they merely transferred jobs from the productive private sector to the inefficient public one. For more yet, see this site.
This myth does not die though. In Michigan, our government has dramatically increased the amount of money that it spends on two 'job creation programs' that are the centerpiece of Granholm's economic recovery program for Michigan. In fact, during her campaign, these two 'job creation programs' featured prominently, and obviously people bought this myth, because she won re-election over a real job creator in Michigan, Republican Dick DeVos. As michiganliberal.com put it "Granholm announced the creation of funding for new companies that will help diversify our economy and keep people and ideas in this state," buying into the myth that the government can tax productive companies and then somehow create jobs with that money.
In reality though, government can not create jobs, it can only force people from productive private sector jobs to inefficient public sector jobs. An article in the Detroit Free Press described how tax dollars in Michigan (where taxes have been steadily been raised) were used by two state programs, the Venture Michigan Fund and the Michigan 21st Century Investment Fund, to try to help bring new jobs to Michigan. These programs were created because Democrat Governor Jennifer Granholm and liberal state lawmakers believed that they could create jobs using the power of the government. The result?
According to the research, Michigan's government spent 116 million dollars and to create 40 new Michigan jobs over the last two years - at the cost of almost $3 million per 'created' job! What's even worse, liberals and government has reached the wrong conclusion- they think that this is a success (the headline of the Free Press article- 'State Venture Capital Funds Start Paying Off'). Thank you to the Michigan Taxpayers Association for staying on top of this one.
So what sent me off on this long rant and prompted me to spend 30 minutes coming up with this post? Those annoying commercials I have to listen to that are narrated by Jeff Daniels! The Michigan Economic Development Corporation has a whole library of video's that they run on TV and the radio that they have put together to tout the myth of government creating jobs. The most annoying of these are the ones that claim that the MEDC is doing great things when it uses massive amounts of taxpayer money to lure environmental companies here, and by doing so somehow creates jobs. Michigan is now fully behind the myth of government job creation- even worse, it is buying in more and more into the more specific myth of green jobs.
John Stossel destroys this myth in his recent article "The Fallacy of Green Jobs." I'm going to pull from it and edit it below:
Democratic presidential candidate Barack Obama has a great twofer pitch: "green jobs." It sounds like a winner. Politicians always promise that their programs will create jobs. The fallacy is the same in every case: Even if the program creates jobs building bridges or windmills, it necessarily prevents other jobs from being created. This is because government spending merely diverts money from private projects to government projects.
Governments create no wealth. They only move it around while taking a cut for their trouble. So any jobs created over here come at the expense of jobs that would have been created over there. Pharaohs created thousands of jobs by building pyramids. Our government could create jobs by paying people to dig holes and then fill them up. Would actual wealth be created? Of course not. It would be destroyed. It's like arguing the hurricanes create jobs. After all, the destruction is followed by rebuilding. But does anyone seriously believe that replacing destroyed buildings creates wealth?
Look at Obama's plan- it wholeheartedly buys the myth. If "green jobs" make so much sense, the market will create them. They will be created by private entrepreneurs and venture capitalists who are eager to profit from winning investments. The best ideas will rise to the top, and green energy will gradually replace coal and oil. If politicians were serious about creating jobs and cleaner technologies, they would step aside and let the free market go to work.
The last thing I want to leave you with is the Broken Window Fallacy, as spelled out by French economist Frederic Bastiat. He pointed out that a broken shop window will create work for a glassmaker, but that work comes only at the expense of the cook or tailor the shopkeeper would have patronized if he didn't have to replace the window. Government taxing tax money, cycling it through inefficient bureaucracies and vast overhead, and then trying to build things inefficiently that the market is not does not create jobs- it destroys jobs.
Need proof- during the Great Depression, FDR's unemployment rate hovered around 15%. And in Michigan, under liberal Democrat Granholm's administration and her government-jobs creation program, Michigan has lurched into a one-state recession and had it's unemployment rate climb from 3.7 to 7.2%.
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