by Henry Oliner

While eating dinner I see an Obama ad that by pushing alternative energy programs he will create – ready for this- 5 million jobs.

It is a common myth perpetuated by candidates, often from both parties, that the federal government can create jobs. This is a sucker line for the economically ignorant.

What they can do is spend money in one place- your money- and generate some jobs in one area, but it always comes at the expense of a job from another place. If the government confiscates a million dollars in taxes and spends it on windmills, the windmill fabricators will find work, but that million dollars will kill at least that many jobs in other areas. That million dollars is a million dollars not spent on cars, clothes, iPods, books, computers, furniture, single malt scotches, cell phones, cigars, Tupperware, dog sweaters, shotguns, flat screen TVs, remodeling, road maintenance, vacations, hotels, Craftsman tools, charitable donations, Broadway shows, guitar strings, athletic ware, hair coloring, plastic surgery, orthodontics, bicycles, art….. well you get the picture.

In fact if the government is efficient, which is like saying if Osama bin Laden was Jewish, the job loss would only be one job for every job created. But since the free choices of the population allocates money much more in line with what people want and is subject to the brutal discipline of the market, the more likely scenario will be that for every job Obama or any other candidate promises, he will likely kill another 2-3 jobs in the private sector for every job he will claim to create.

The economic theory here is as sound as gravity, but if it escapes you just look at the results of every job creating program that has passed. If a fraction of the job creation promises held true we would have had zero unemployment for decades.

The road to a sound economy and real job growth is:
1. Low taxes
2. Low regulation
3. Free Trade
4. A strong currency

Obama is on the wrong side on three of these four requirements, and I doubt if you can have the fourth without the other three.

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