A couple of weeks ago, the New York Times published an editorial arguing–contrary to the myth being promulgated by then-candidate Mitt Romney and affirmed by President Obama–that the government actually does create jobs. Washington Post columnist Robert Samuelson published an extraordinary rebuttal, titled “The Flat-Earth Theory of Job Creation,” ripping the “simplistic” thinking of the Times editorialists.
It’s almost mind-boggling what Samuelson managed to achieve in one short column. He argued, against the “flat-earthers” who think that the government can create jobs:
1) Government doesn’t really create jobs, because an increase in government jobs means a decline in private-sector jobs. (This claim assumes that the economy is at full employment. But, at full employment, an increase in jobs in any sector means a decrease in jobs in other sectors. So, by this standard, the private sector doesn’t create jobs either.)
2) There’s no basis, in general, for preferring private-sector over public-sector jobs (or vice-versa). (In other words, more government jobs with fewer private-sector jobs is not necessarily worse than more private-sector jobs with fewer government jobs.)
3) In a “deep slump” (really, in any slump–any time the economy is not at full employment) the government may, in fact, create (net) jobs. (That’s true!)
Wait, was this a column rebutting the case for government job creation?
Shout out to co-editor Chris Sturr and frequent D&S contributor Marty Wolfson for alerting me to the NYT-Samuelson debate, and for an interesting email exchange on the topic.