This Under the Dome post represents the prevailing economic ignorance so dominant in our society – and among our politicians – today.
federal stimulus packaged called "Jobs Now," Rob Christensen reports.
"With every construction project that is beginning in North Carolina with the
federal money that we will have a sign up that says "Jobs Now," Gov. Beverly Perdue told a meeting of black
elected officials this morning in Raleigh.
"That is going to be the logo in North Carolina. We want people to know that
we are putting folks back to work," she said.
This reminds me of perhaps the most important lesson about economics, as first popularized by 19th century French economist Frederic Bastiat:
birth not only to an effect, but to a series of effects. Of these effects, the
first only is immediate; it manifests itself simultaneously with its cause – it
is seen. The others unfold in succession – they are not seen: it is well for us,
if they are foreseen. Between a good and a bad economist this constitutes the
whole difference – the one takes account of the visible effect; the other takes
account both of the effects which are seen, and also of those which it is
necessary to foresee.
It's easy to see the "Jobs Now" projects of government roads and bridges. But where does that money come from? What use would that money have been put toward if not taken by the government to finance their public works?
As Bastiat put it:
neglect to state also the destination which the taxpayer would have given, but
cannot now give, to the same. Then you will understand that a public enterprise
is a coin with two sides. Upon one is engraved a labourer at work, with this
device, that which is seen; on the other is a labourer out of work, with the
device, that which is not seen.
What signs will be given to the laborers put out of work because of a redirection of resources from the private sector to political ends? What signs will be given to those workers deprived of opportunity due to jobs never created because resources are tied up in public works?