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Robert J. Samuelson: Here is why government does not create jobs

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  • Stalwart Sentinel San Jose, CA
    Oct. 26, 2012 6:57 a.m.

    Chicken meet egg.

    If we didn't have police, teachers, courts, a military, civic leadership, etc... then there would be little capability and no incentive to work in the private sector because the rule of law would be nearly obsolete. One could steal your home, your car, your cash, everything you've earned just as easily as they could steal your company's intellectual property and you'd have no recourse.

    Further, for all of Romney's pandering to the right, he seems to disagree with common conservative wisdom. In the third debate he said, as in many other cases, that "I know what it takes to create 12 million new jobs... [a]nd I'll do it with five simple steps." Sounds like, at the very least, he understands that government can set the backdrop under which job creation increases.

    Also, under Obama, public sector employment has gone down - he is the only president to have public sector hiring go down during a recession in the last 30 years. Had he inflated his recovery efforts and kept public sector hiring employment at the levels Reagan did during his recession, unemployment now would be well under 7%.

  • Blue Salt Lake City, UT
    Oct. 26, 2012 7:29 a.m.

    Boy, the Deseret News is really pouring on the rightwing talking points today.

    Today's brand of conservatism (unrecognizable to the conservatives of Eisenhower and Goldwater) seems intent on turning North America into a giant version of Iran mixed with a dose of Somalia.

  • Owen Heber City, UT
    Oct. 26, 2012 7:46 a.m.

    Dear old Dad, who had two complete careers -- one as a teacher; another with the Forest Service. Step-dad had one as a firefighter. They would be amazed to learn they never had "real" jobs -- according to their own party leaders.

    Samuelson goes through the typical gymnastics using "caveats" and his own definitions "of what 'people' mean" to contradict himself. Of course every President has counted the millions of public- sector jobs as "jobs" because they are. And most "jobs" bills since the '40s have been efforts to create these non-job jobs during periods the economy struggled.

    And if the current proposed "jobs bill" had been passed a year ago, it would have removed an arrow from the Republicans election-year quiver. Which is the only reason it hasn't passed the House yet. You can bet it will when Mitt's elected. But I'm sure he and Paul won't count the public-sector jobs it creates.

  • one old man Ogden, UT
    Oct. 26, 2012 8:48 a.m.

    Ridiculous.

  • Hutterite American Fork, UT
    Oct. 26, 2012 8:51 a.m.

    The economy under president Obama has turned around and is starting to create jobs. Let's vote for him.

  • Hemlock Salt Lake City, UT
    Oct. 26, 2012 9:29 a.m.

    Liberals - me thinks thou protesteth too much. The truth hurts.

  • LDS Liberal Farmington, UT
    Oct. 26, 2012 9:55 a.m.

    So then,

    WHY does Mitt Romney keep campaing that as President HE can create 12 Million new jobs?

    Who the liar?
    Mitt, or the Republicans who vote for him?

  • Blue Salt Lake City, UT
    Oct. 26, 2012 10:55 a.m.

    "Liberals - me thinks thou protesteth too much. The truth hurts."

    What "truth" would that be? Seriously, I want to know.

    Truth is completely foreign to the Romney campaign. How does Romney's "severely conservative" statements square with anything he said in the debates, during which he sounded like a moderate Democrat?

    When Romney says he'll dramatically raise defense spending, _and_ cut taxes, _and_ balance the budget without hurting the middle class, why do you let him get away with making patently absurd statements like that? Where is there any "truth" from Romney on this subject?

    Romney claimed on October 4th that "half of the companies that received government support under Obama's $90 billion green energy program had gone out of business."

    In reality, it was 8% of those investments that failed.

    Bain Capital had 22% of their business ventures fail.

    So, where is the "truth" in Romney's criticism of public support for alternative energy jobs?

    The real truth is that Romney constantly refuses to be truthful, and Republicans appearantly don't mind that a bit.

    Belief is more important than truth to today's conservatives, and that is a recipe for disaster.

  • Bebyebe UUU, UT
    Oct. 26, 2012 10:55 a.m.

    The biggest employer in the state is the federal government.

  • Mike Richards South Jordan, Utah
    Oct. 26, 2012 11:27 a.m.

    Sales tax rates are the same for every TAXABLE purchase in the locality in which they are required. Is that clear enough? The question is not whether milk is taxed, it is whether a "rich guy" pays more sales tax per dollar on his purchases than the poor guy.

    Obama is clearly telling us that taxing the "rich guy" will solve the revenue vs expenditure problem in America. The CBO has clearly told us that taxing the "rich guy" will bring in a maximum of $60 billion per year. Obama is running a deficit of $1,5 TRILLION per year, The expenditures are 25 times greater than the expected increase in revenue.

    Taxing the "rich guy" will not solve the problem.

    Increasing the tax base will solve the problem IF expenses are cut to a reasonable level.

    There are only three major expenses in the budget: Military, Social Security and Medicare. Those three items are more than the Obama's yearly deficit.

    Revenues MUST be increased WITHOUT destroying the incentive to create new business and new jobs.

    Taxing the "rich guy" will DESTROY jobs. Fewer jobs means less revenue.

    Obama is too dense to understand that principle.

  • The Real Maverick Orem, UT
    Oct. 26, 2012 11:48 a.m.

    So then why does Gov Romney keep talking about how he will create jobs once he becomes President?

  • Kent C. DeForrest Provo, UT
    Oct. 26, 2012 11:56 a.m.

    If I understand Samuelson's opinion, he's saying that you have to have demand for a product that people are willing to pay for to "create" a job. Well, I happen to enjoy the following products: police protection, libraries, clean water, interstate highways, garbage collection, sewers, security at airports, national parks, and a good education. And guess what? I'm willing to pay for these products. (In fact, I'm willing to pay more than I now pay because I realize we are putting lots of these items on the government credit card.) It so happens that these products are most efficiently produced by government.

    So what on earth is Samuelson trying to say? That money only comes from business ventures? Sorry. Try reading a ten-dollar bill. It says "Federal Reserve Note" at the top. It's issued by the United States of America, not by JP Morgan Chase, and it is signed by the Treasurer of the United States and the Secretary of the Treasury. Businesses don't create money. They pass it around in exchange for products and labor.

  • Ultrabob402 Cottonwood Heights, UT
    Oct. 26, 2012 11:58 a.m.

    If only the conservatives would try to tell the truth, or more to the point the whole truth.

    Mr. Samuelson claims that because the jobs created by the government are paid by money taken from people, that the jobs are not really jobs. He seems to think that the person in a government job pockets the money rather than spend it, therefore money is taken out of the economy and lost.

    The fact is, the government worker probably spends more, helping the economy more, than the private worker because government jobs often pay more and have better benefits. And none of the government workers wages are siphoned off as private profits. Profits that are sitting stagnant in a savings account, maybe not even in the United States.

    As for stimulus, no matter how much we give to business in expectation of their help, they do not. The only real way to help the economy is to help people, workers, consumers.

  • CHS 85 Sandy, UT
    Oct. 26, 2012 12:24 p.m.

    @Bebyebe

    "The biggest employer in the state is the federal government."

    But most of them work for the Department of Defense, who are not surprisingly exempt from any and all criticism.

  • RedShirt USS Enterprise, UT
    Oct. 26, 2012 12:26 p.m.

    I don't think that the liberals understand this at all. The point is, government does not create jobs that add to the GDP of the nation. All government jobs do is take away resources from people and companies. Some is necessary, but much is not.

    You ask how Romney will "create" 12 million jobs, he means that he will reign in government so that private businesses are confident they can hire people again.

    To "Hutterite" if the economy has turned around, why is it that the U6 unemployment rate is still over 10%, and the labor participation rate is at 1980 levels? Also, for a recession that ended in July 2009, why is it that GDP and job growth are slower than population growth? If Obama is doing so great, why are all the economic indicators showing such high unemployment and anemic growth?

  • CLM Draper, UT
    Oct. 26, 2012 12:29 p.m.

    Obama's administration, as all before his, skew statistics to make things look better than they are. Case in point, the current job situation. The current administration is congratulating itself for the near one million jobs reported in the September Household Survey. The huge majority of these are part-time jobs desperate families are resorting to in a job market so poor that full-time work cannot be found.

    The 7.8% unemployment figure doesn't count the total 8.2 million who have, over the last 4 years, dropped off the unemployment rolls and out of the job market. According to ShadowStatistics website, the total rate for the employed and underemployed is a frightening 22.8%.

    As for claims about the renaissance of manufacturing jobs, they actually declined by 16,000, making a total loss of 40,000 jobs in the last two months.

    Don't take any candidate seriously without looking into the facts, in this case clearly indicating that we are experiencing an increase not in jobs but in income disparity, not to mention heralding a double-dip recession that no administration will be able to prevent.

  • atl134 Salt Lake City, UT
    Oct. 26, 2012 1:25 p.m.

    What really creates jobs is demand. A job, particularly in the private sector, is not going to be created unless an extra employee is needed. If a company can get by with fewer workers it will tend to do so. Hiring is a means of last resort for businesses. The reason the recovery is so slow is because Americans are so busy paying down personal debts and rebuilding savings that we're not pumping enough money into the economy to fuel job growth. That's the #1 issue facing businesses right now with regards to why they aren't hiring... it's because there's not enough demand to require it.

  • atl134 Salt Lake City, UT
    Oct. 26, 2012 1:31 p.m.

    @RedShirt
    "The point is, government does not create jobs that add to the GDP of the nation. "

    I disagree. Firefighters protect property from damage. Police protect people and businesses from crime. Teachers provide education that leads to a smarter workforce. Construction projects better facilitate travel and transport of goods. All of these things add to GDP on some level.

    "If Obama is doing so great, why are all the economic indicators showing such high unemployment and anemic growth?"

    Republicans keep filibustering his jobs bills to death. What the heck do you expect a guy to do when anything he attempts gets blocked by the party of no?

  • Truthseeker SLO, CA
    Oct. 26, 2012 2:25 p.m.

    UT ranks in the top 10 nationwide in per capita number of federal employees.

    The UT Olympics was a success, in part, due to a massive influx of federal dollars.

    How many jobs does my tithing create? The LDS Church is also a major employer in the state of UT and
    when the construction industry nationwide was decimated during the economic crisis, the LDS church was engaged in a massive commercial building project in Salt Lake.

    Federal dollars and church funds enable people to spend money, increasing demand and stimulating the economy.

    DN should report that.

    I don't hold any illusion that Utahns are ever going to recognize the inflow of money from outside their state in the form of taxes and tithing.

  • RedShirt USS Enterprise, UT
    Oct. 26, 2012 2:53 p.m.

    To "atl134" and you have now proved his point. What is the GDP value of a government paid firefighter? Yes they are important, but they do not add directly to the GDP, they only take away from it.

    Republicans have only been an issue for 1 1/2 years. For 2 years Obama had full control of Congress, yet he still couldn't get things done. You can't blame Republicans for the inability of the Democrats to agree.

    You also forget that the recession ended in July 2009, so if the Republicans were such a hindrance, why is it that from July 2009 through December 2010 things remained bad? Also, if what the Republicans were doing was so bad, why is it that after the Republicans took control of the House that the total non-farm jobs number started to increase. If you look at it, any recovery in employment is due to Republicans, not Democrats, or no Obama's policies.

  • Stalwart Sentinel San Jose, CA
    Oct. 26, 2012 3:44 p.m.

    @Redshirt -

    GDP (Y) = C + I + E + G

    C = private consumption. I = gross investment. E = excess of import over export. G = government spending.

    Basic macro; pretty clear you should do some more research. I'm glad you're talking "GDP" talk though b/c, perhaps unbeknownst to you, belief that GDP is even measurable inherently means you're a Keynsian.

    I also enjoy the mental gymnastics you go through to try and attribute any job growth to the Republican-controlled HoR. What specifically did they do to create jobs? Be painfully specific. You do realize that, either way, whether repubs or dems were responsible, it ultimately points to government creating jobs, right?

  • Truthseeker SLO, CA
    Oct. 26, 2012 4:13 p.m.

    re:Redshirt
    "For 2 years Obama had full control of Congress,"

    FALSE

    1/20/2009 Obama inaugurated Congress: 58 Democrats

    4/2009 Arlen Specter switches from Republican to Democrat. 59 Democrats

    5/18/09 Robert Byrd hospitalized until June 30, 2009: 58 Democrats

    7/7/09 Al Franken seated: 60 Democrats (counting Robert Byrd, Ted Kennedy had not cast a Senate vote for about four months because he was terminally ill)

    8/25/09 Ted Kennedy dies: 59 Democrats (During the last 6 months of 2009, Byrd missed 128 of a possible 183 votes in the Senate).

    9/24/09 Paul Kirk fills Kennedy vacancy: 60 Democrats

    2/4/10 R-Scott Brown takes Kennedy seat

    Also one needs to take into consideration the days Congress was not in session due to holidays.

    Congress was in session 55 days between 9/24/2009 (when Kirk filled Kennedy's seat) and 2/4/2010 when Republican Scott Brown replaced Kirk).

    Obama had a "filibuster-proof" majority approx. 72 days.
    Nowhere near 1 year, let alone 2 yrs.

  • andyjaggy American Fork, UT
    Oct. 26, 2012 4:37 p.m.

    I wonder what all the people employed by the private sector think when they are told that they don't contribute to the economy, they detract from it. Let's all bow down and worship the mighty GDP, the mysterious and often unmeasurable measurement of our success as a nation.

    I guess I take a very simplistic view of economics. If someone is employed, whether it be in the public or private sector, and are productive employees providing some product or service to other members of society, then they are contributing to our success as a country, wherever their paycheck is actually coming from. Most often they then invest that money back into the system by purchasing other products and services. The money comes from us as a people, whether through taxes or voluntarily purchasing that service, in the end the money is from the same place.

    Frankly I wonder if anyone really understand economics, it seems like a field plagued with contradictions and differing opinions.

  • boxerdog915 Clearfield, UT
    Oct. 26, 2012 6:14 p.m.

    Romney and Obama are both idiots for believing they can create jobs. More government jobs means no private sector because taxes will be so high to pay for government jobs, the private sector will eventually disappear. That's common sense and as I read some of these comments, a lot of you have no common sense.

  • WHAT NOW? Saint George, UT
    Oct. 26, 2012 7:24 p.m.

    @boxerdog915

    Romney is an idiot?

    Which Romney said HE would create 12,000,000 new...high paying jobs ($50,000 with benefits)...by 4/15/13 as reported by hannity on his radio show.

    Which Romney might be over optimistic, but I will wait until 4/15/13 to call him something else.

  • Eric Samuelsen Provo, UT
    Oct. 27, 2012 12:35 p.m.

    So how do you live up to the legacy of a famous father? In Robert Samuelson's case, it's by rejecting the ideas that his father so famously advanced and defending. This column is a perfect example. In a demand side recession, the government can and should create jobs. And the Keynesian multipliers will increase demand, leading to the creation of more private sector jobs. Macro 101.
    Does it work? Well, compare economic growth in the US following the meltdown with job creation in, say, Great Britain.
    We know what works. The evidence is overpowering. We're seeing the triumph of Keynes once again.