Job Creation and Other Economic Myths
Dec 27, 2010
Fred Buzzeo writes: Job creation has become the central theme of the current recession. The focus on job growth is widespread among both conservative (if I may use this term liberally) and left-leaning economists. Furthermore, if you ask the man on the street what the pressing economic problem of the time is, he will certainly respond, “Jobs.”
In a Gallup poll taken in March of 2010, unemployment was listed as the most important problem facing the country. This finding was reinforced in a poll conducted by the Washington Post in October of 2010. In fact, the lack of job creation was one of the major reasons that the GOP achieved such widespread electoral victory in the 2010 midterm elections.
It is clear that job creation is essential. But where are these jobs to come from? The huge stimulus plan of the Obama Administration and the quantitative easing of the Federal Reserve have failed to solve the problem. In fact, with time, these actions will create greater ills than the problem that they were intended to cure.
The reality of high unemployment continues to plague the economy. Therefore, we must look elsewhere for solutions to the unemployment problem. We must ask, what is the correct path to sustained, noninflationary economic growth?
To answer this question, I suggest that we take a step back in time and examine the writings of the early economic thinkers. In doing so, we find that the main concern of these economists was in the production of goods and services.
Jean-Baptiste Say makes the case most succinctly, He writes,