Wednesday, February 10, 2010

We need to stop focusing on jobs

It seems lately that the only thing our politicians have been focusing on is jobs. I hate to say it, but this is a waste of time. We only need to go back to the old motto: government cannot create wealth, it can only destroy it.

Our focus on jobs is a waste of time because we need to realize that the value of a job is the wealth that it creates. If you have an economy where everyone works for the government digging holes and you have 1 farmer, you're going to have mass starvation. Yes, everyone will be working, but the government jobs are a drain on the economy. If these people were not working for the government, they could be making tools to help the farmer or become a farmer in order to compete. We have to realize that the only reason that a job naturally comes about is because there is a demand for the wealth created by the job.

And this is why all make-work programs naturally fail. The way out of a recession is to ramp up production. Government cannot do this because it does not operate from the profit motive and as such it does not know what people want. Only the private sector which can know what the demand is. Those companies that stick around and profit will successfully be satisfying the demand of the people Those that go bankrupt are not. This is why those companies that are not making profit should fail. When a company is failing, it means that the resources that they are using are not being put to a good enough use. With the liquidation of that company, those resources will be free to meet the demands of the people.

We have forgotten this old lesson, something that we should have learned from our high school economics classes. If you do not have an economy producing the things that people want, then you do not have a good economy. It is time that we stop these make-work programs and instead let the market correct and get back to making those things that we want.

No comments:

Post a Comment