Jobs, Jobs, Jobs

by Alejandro Reuss | November 07, 2012

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.

The Federal Government funded and developed the Internet, putting the Internet into operation. Would you say that constitutes “government creating jobs?”

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