Jay Inslee and the Parable of the Broken Window
Raising taxes simply to fund make-work employment programs is not the same thing as sustainable job creation. Good jobs last when they’re economically viable and can stand on their own–without the crutch of government subsidies.
Somebody please explain this to Jay Inslee (D, WA-1). And please do it before he votes for even more job-killing legislation.
As I read through Jay Inslee’s book, Apollo’s Fire, he cites several examples that show he doesn’t understand sustainable job creation.
1. Inslee confuses temporary make-work jobs with sustained growth.
He cites rebuilding cities as a source of job creation. Sure, you can raise taxes and spend it on temporary construction jobs. But what happens after all the potholes are filled? The construction crews are out of work again, and you’ve only succeeded in pulling future demand forward. (Remember what happened with Cash for Clunkers and the Homebuyer Tax Credit–auto and home sales spiked temporarily, only to plummet once government support was removed.) Inslee focuses on the creation of temporary construction jobs–admittedly, a short-term employment boost–but he fails to consider the economic viability of the work for the long haul. That’s a recipe for a few crumbs now and bare cupboards in the future.
2. Inslee confuses expenditures with income.
On pg 282, he says rebuilding the nation’s electric grid will create jobs because it “would drive new investment into construction and maintenance jobs as well” and create software jobs because it requires complex software.
Not quite. The construction, maintenance, software engineer jobs he cites as job creation are actually the cost of rebuilding the nation’s grid. The new jobs would come only if the new grid makes consumers more economically productive such as by being more efficient, reliable, or cheaper. And to achieve net growth, that productivity wins would need to outweigh the cost of rebuilding.
3. Inslee claims making jobs less efficient will create more jobs.
He cites another example on pg 296 saying “[increased building codes] create jobs and demand for highly skilled construction labor.”
Not quite. This is just using inefficiency to create jobs … like trying to create farm jobs by banning the tractor. More complicated codes raise costs, which hurt jobs. Now you may fairly argue the codes have some other redeeming value, but don’t claim they lowers costs and create jobs. (This was one of the examples from a Wall Street Journal article that liberals do badly on basic economics compared to conservatives.) This theme also comes up when Inslee cites switching to less efficient energy as a way to create jobs.
After listening to Inslee, I realized that he hasn’t figured out the Parable of the Broken Window. Simply spending money is not the same as job creation.
The good news is that Inslee finally has a strong challenger, James Watkins, and James Watkins has a demonstrated history of job creation from his work with small businesses. Support James and get somebody in Congress who actually knows how to shrink government and grow jobs!