CNN is reporting that President-elect Barack Obama has announced the outline of his plan to create 2.5 million jobs by 2011. The first question that comes to my mind is how does he intend to measure the number of jobs created? Is he suggesting that he will increase the total number of employed people relative to today by 2.5 million? Or is he instead suggesting that he will authorize the creation of 2.5 million more government positions? My guess is that he intends the latter, but wants people to believe the former.
Question 2: How does Obama intend to pay for the jobs he wants to create? The government is not a business. It doesn’t have independent capital reserves that it can call on to fund expansion. If it grows, it must do so by raising revenues in the form of taxation (with borrowing being the promise of future taxation). Frederic Bastiat had a few things to say about government job creation schemes. For every wind-turbine engineer, solar-panel installer, and green car mechanic employeed by the government, there will be a myriad of other private sector jobs like computer programmers, fry cooks, and brokers that either never get created, or are forced to pay less. Due to the inherent deadweight loss of taxation, this is almost always a negative sum game in which the growth in government fails to offset the decline in living standards of the population at large.
Question 3: What does Obama know about advanced energy technologies that people actively working in the industry do not? If it was possible to create viable alternatives to the internal combustion engine and coal-fired power plants, why has no one done so already? I didn’t read anything in Obama’s outline about the specific strategies he has in mind for overcoming the technological hurdles associated with converting solar energy to portable fuel. Instead what I saw was a desire that we lived in a different kind of world and a willingness to forcibly extract and spend other people’s money in the attempt to move in the desired direction. Just because you perceive a problem doesn’t mean there is a solution. If this is what was meant by the “Audacity of Hope” consider me thoroughly offended. I assume what Barack Obama wanted to convey with that title was simply the idea of courage founded upon the faith in one’s own abilities; at least, that is a message that I could understand wanting to communicate. Unfortunately, the most sensible reading of the words he chose suggests instead that he is willing to aggressively pursue his dreams regardless of the costs he might impose on others.