Create Wealth, Not Jobs


Soon after the president dropped his ill-advised “the private sector is doing fine” gaffe, White House press secretary Jay Carney scolded the media for failing to frame the comment in the proper “context.” Which is weird, because the context is the worst part.

Yes, government “creates” jobs, often out of thin air. The private sector creates wealth — which, in turn, allows us to fund the vital work of sending weapons to Mexican drug lords and prosecuting Roger Clemens.

Yet there is a pervasive argument coming from Democrats these days — and, no doubt, the president was thinking of this context when he gaffed — that goes something like this: “You know, if local governments hadn’t laid off all those public service workers — a policy conservatives embrace, mind you — the unemployment rate would be closer to 7 percent rather than 8 percent.”

Let’s just say that few Americans are grousing about the decline in government productivity since those dreadful purges. Having a robust array of government services is a luxury, not an engine of growth. Though taking out a massive advance against future prosperity to artificially pump up employment statistics might be an effective way to win re-election, it is no way to judge economic well-being. A decline of wealth, on the other hand, is.

A new survey from the Federal Reserve found that both American income and wealth have deteriorated dramatically since 2007, as the median real income has fallen by 7.7 percent — everyone taking a hit but “retirees and other nonworking families.” For the average American, net worth has declined by about 40 percent since 2007 — from $126,000 to $77,000. The average family can say goodbye to about 18 years’ worth of savings.

Meanwhile, not only does the Bureau of Labor Statistics find unemployment rates of government workers at 4.2 percent but also studies find that public-sector employees — free of the constraints of demand — make more than their private-sector counterparts in similar vocations.

What this signals to the president, naturally, is that the economy is jonesing for more unsustainable busywork and debt. Hey, good salaries and job security — what’s not to like?

Moreover, the context of President Obama’s remark is simple: He believes that public-sector jobs are a vital measure of economic growth. This is the prevalent view from the left these days. “Everybody knows that government creates jobs,” lied Sen. Sherrod Brown recently. Liberal Washington Post columnist E.J. Dionne quipped that when conservatives say “government doesn’t create jobs,” “the riposte should be quick and emphatic: ‘Yes it has, and yes, it does!’” (And really, how can anyone argue with that kind of ironclad logic?)

It’s ironic that the same people pushing unsustainable job growth find the process of wealth creation so unsightly. Not long ago, Obama and others on the left were busy attacking private equity, claiming that some people are good at “maximizing profits” but that that’s not always “good for businesses or communities or workers.” (Actually, it almost always is.)

But pumping money into public-sector unions is always good for businesses, communities and workers? Obama is peddling a “jobs” bill right now that features one pinch of protectionism, one pinch of feel-good veteran help and a few hundred cups’ worth of wealth-sucking, union-growing debt inducement. Can anyone name a single policy proposal by his administration that even pretends to clear the way for private-sector wealth creation?

In context, the entire focus of the president is warped — not simply because he underestimated the health of the private sector but because he believes that any other sector matters when talking about the economy. It doesn’t.

David Harsanyi is a columnist and senior reporter at Human Events. Follow him on Twitter @davidharsanyi.

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