Wednesday, November 01, 2006

Magic Wands and Magic Multipliers

The Magic Job and Wealth Wand of Politicians
by Bill Barnwell

If you’re like me, you’re getting tired of politicians and all their so-called "plans" to add new jobs to the workforce. In my home state of Michigan, two unimpressive candidates are both trying to woo voters with their respective "plans" to "bring jobs to Michigan." There is almost never an explanation of what these "plans" are and what exactly they entail; all we know is that there is some secret plan that will be enacted upon the respective candidate’s election that will bring economic utopia to their constituents.

The talk of Governor Granholm’s "plan" is all the more interesting considering Michigan has lost thousands of jobs in the past four years under her Democratic administration. Yet she now wants voters to believe that she’s just been holding back these past four years only so she can enact her secret "plan" upon being reelected (and in her recent State of the State address she promised that everyone would be "blown away" with awe five years from now).

There is a problem, however, in giving politicians too much credit or even too much blame for the economy. In Granholm’s case, while she hasn’t objectively been a very good governor, much of Michigan’s job woes are a result of the state having a hard time adjusting to the new economy. Much of Michigan still wants to work in an economy that resembles the 1930’s instead of 2006. But instead of leading Michigan through a needed economic transition, politicians from both parties instead want to wave around their Magic Job Wand, promising that they can somehow "create jobs" out of thin air. Not only do their respective "plans" not make any sense, they are cruel in the fact that they give people false hope.

Voters need to understand that Presidents and Governors do not have some magical ability to create hordes of private sector jobs. They can create new government jobs and new government agencies, but it is the rest of the public that pays for these jobs (through their tax dollars) and has to put up with the added inefficient bureaucracy. It appears that much of the public does in fact view politicians as mini-gods who have the power to create jobs ex nihilo. Just as the Bible recounts God speaking creation into existence, many voters appear to buy into the propaganda that politicians can speak jobs and economic progress into existence.

On the contrary, politicians and governments typically do more harm than good for the economy. Just about every day, our money loses purchasing power through inflationary policies, thanks to the Federal Reserve. This is another area where many Americans are typically ignorant. I’ve actually heard grown adults with college degrees say things like, "Why can’t they just print more money and give it to the people that need it?" Most people reading this column know, however, that the more money the Fed prints, the less it is worth, but a frightening number of Americans have never been educated in these matters (which is why you should send this to your friends or family members who do not have a background in basic economics).

Another thing politicians like to do is take your money though taxes. The moment somebody suggests lowering the amount of taxes that are taken out of your paycheck, a number of politicians and liberal advocacy groups complain about how much this will "cost" the government. This sort of reasoning suggests that the government is indefinitely entitled to an ever-increasing supply of your earnings. We should not be surprised then when this entitlement mentality spawns a similar entitlement mentality amongst the masses who cast their votes for the economic looters. Politicians know they can gain much more votes promising free goodies to voters rather than telling voters the truth about responsible economics or being advocates for private enterprise.

Tax cuts, however, are only part of the equation. Government spending also needs to be controlled. You cannot cut taxes and then continually grow government and increase government spending. Most polls show a large sector of the public want both lower taxes and higher government spending on programs. But where exactly is the money supposed to come to pay for these programs? Ah, that’s right; the Federal Reserve can just print more money from which Congress can borrow. That way we can have both inflation and rising deficits.

Whatever the answer, the solution is not found in a benevolent politician’s magic wand. There is nothing in the world of government that is "free." Wealth and jobs do not spontaneously generate. Somebody somewhere has to pay for all the government programs and positions. And we all pay when the Fed, the President and Congress conspire to decrease the purchasing power of our dollar through an inflationary monetary policy while at the same time taxing and spending like there’s no tomorrow.

Interestingly enough, according to the Magic Wand Politicians, the major villains in this drama are often the people and businesses that actually are creating jobs, or at least contributing most of money to government programs. This is not a total apologetic for the rich or business classes, who often are looking for their own handouts and have their share of greedy and selfish people. Though the fact remains most jobs are being created by private enterprise and innovative people, not by politicians with magical powers.

Education is the key to seeing through the smoke and mirrors of the Magic Wand Politicians. As long as people stay ignorant of these matters, government can continue to loot the populace while cruelly giving them false hope in their supposed magic powers. Next time you hear a politician talk about his or her plan, read the fine print. Instead of job creation what you are more likely to find is empty rhetoric or a combination of higher taxes, more spending, and increased inflation.

The net result leaves you, poorer, not richer. It also helps keep you dependant upon your government overlords who in turn are dependant upon your vote. It is time for independence and time to end this vicious cycle. A good first step would be to recognize that politicians do not have superhuman abilities and are not our secular saviors.

1 comment:

DRS said...

Thank-you for posting this.....I can defintely empathize with the author since I am from Michigan too. It is very frusterating listening to both politicians talk about helping the economy when there is really little they can do, and even less they should do.

A huge problem is the number of people who directly blame the govenor for the economic woes and use it as their main premise for supporting one candidate over the other. The same people who believe this are the ones who credit Clinton for the economy in the 90's.