Be Careful What You Wish For
By Arnold Kling
Nick Schulz emailed me this paragraph from the Bureau of Labor Statistics:
Eleven of the most populous metropolitan areas are composed of 34
metropolitan divisions, which are essentially separately identifiable
employment centers. In November, Detroit-Livonia-Dearborn, Mich.,
again registered the highest division jobless rate, 10.6 percent,
followed by Los Angeles-Long Beach-Glendale, Calif., and Warren-Troy-
Farmington Hills, Mich., at 8.7 percent each. Bethesda-Frederick-
Gaithersburg, Md., continued to report the lowest unemployment rate
among the divisions, 3.8 percent.
We already have lower unemployment in the D.C. area than in the rest of the country. Putting more of the economy under the control of Washington is going to exacerbate that differential.
For another argument against more government spending, see Eileen Norcross and Frederic Sautet.
job counts are taken as evidence of guaranteed economic activity. But for economic benefits to occur, it matters how jobs are created. Jobs created by the private sector result from entrepreneurial innovation and trade. This process leads to real productivity gains and higher standards of living. At the end of the day, the government cannot replicate what only private entrepreneurial activity can do
You will hear Keynesians cry over the “lost output” that results from having unemployment. That is somewhat misleading. The reason we are getting less output from home builders, mortgage securitizers, and auto makers is that we do not want so much of from them. Putting them back to work doing stuff people don’t want may produce output in an accounting sense, but in economic terms it is still lost output.