July 6, 2010
A Hapless Administration
Last week was extraordinary. The president's economic advisor, Christina Romer, declared that Americans should be feeling pretty good about the June jobs report. After all, the unemployment rate dropped from 9.7% to 9.5% because 650,000 people were so discouraged that they gave up looking for work. "We've known for some time," she said, that things would get bad before they got better. Romer's advice to those losing their homes, their cars, their medical insurance, and all else was "Be patient."
Nancy Pelosi, known for her innovative solutions, such as passing major pieces of legislation without voting on them, announced that the best way to create jobs was to extend unemployment insurance beyond 99 weeks. The president himself simply reminded the American people that it's all George Bush's fault, and it will take "some time" before things get better. That should boost the public's confidence in the economy.
The fact is that government is failing to produce jobs for the simple reason that government cannot create jobs. Jobs are created by the private sector as it produces goods and services that the public wants and needs. Other than necessary spending for national defense, government should have no role in the economy.
Although it cannot create jobs, government can retard job creation. An EPA ban on mountaintop mining will wipe out thousands of jobs in Appalachia, according to the National Mining Association. The ban on deep-water drilling -- which promises to extend beyond six months since the advisory committee to evaluation drilling safety has not even met -- will cost 20,000 jobs. Financial regulation promises to drive tens of thousands of Wall Street jobs overseas to free-market havens like Singapore, Hong Kong, and Switzerland. Pending cap-and-trade legislation will further sap growth and reduce competitiveness, leading to further job losses.
Government, in reality, produces nothing of value beyond its role in national security. It only destroys.
The destructiveness of government is all too apparent in Obama's response to the Gulf oil spill. Dozens of countries volunteered to come to our aid, but government bureaucracy (and Obama's fear of being shown up as the incompetent he is) kept them out of our waters. Bureaucratic guidelines prevented hundreds of skimmers from being transferred from other parts of the country to the Gulf, and it took the administration ten weeks to decide to partially suspend the regulation. A giant skimmer-vessel (the A-Whale) has arrived in the Gulf, but the EPA so far has refused to exempt it from regulations that prohibit discharge of small quantities of oil as a byproduct of its filtering operations.
The A-Whale can remove 500,000 barrels of oil-soaked water from the Gulf daily, more than all the cleanup vessels now operating combined, but in doing so, it will discharge a few parts per million of oil back into the sea. So let's prohibit it from operating. You see, the regulation says ships cannot discharge more than 15 parts per million. The EPA doesn't want a ship to remove half a million barrels of oily seawater from the Gulf if the filtered seawater contains a few specks of oil.
The EPA may issue a permit or may be overruled by other authorities, but its behavior is a good example of the way government works -- or doesn't work.
By contrast, the way the free market works is incredible and inspiring. Watching the explosion of the Deepwater Horizon in distant Taiwan, Mr. Nobu Su, CEO of a Taiwanese shipping company, devised a plan to solve the spill problem. Within hours he had decided to convert a large cargo vessel into a giant skimmer -- the A-Whale. Within one day, the conversion plan was already well underway. Mr. Su risked his company's capital in the expectation of renting his skimmer vessel to BP and making a profit for his company.
So far, our government has done nothing to promote the efforts of men like Mr. Su. The A-Whale is currently in the Gulf undergoing tests. How long will it take EPA and other bureaucracies to license the A-Whale for actual use?
The sad thing is that government doesn't see this kind of delay as a problem. It sees it as an opportunity -- for expansion of bureaucratic power and for political shakedowns. Carol Browner, Obama's energy czar, has stated publicly that new drilling regulations will probably drive all but the largest companies out of the Gulf. That seems to be just fine with Ms. Browner, but has she considered how many companies will fail and how many jobs will be lost? Browner's reaction is typical of how out of touch, and how callous, the Obama administration has become. Just like Ms. Romer, Browner's attitude toward the economic devastation she is causing seems to be "Be patient."
In another ten or fifteen years, once coal mining and oil and gas production have been decimated, the country will have no choice but to install windmills and solar panels. Imagine how many temporary jobs that will produce, and how many nasty little industries will be driven overseas! There will hardly be an American factory left to trouble the conscience of the tree-hugging community.
When Obama's stimulus bill was passed in February 2009, the president promised that it would create four million jobs. Not only has the stimulus bill not produced jobs, it and other Obama policies have cost us five million jobs. Government has squandered trillions of dollars that might have been put to work in the private sector, creating jobs. Given free rein, the free market would already have moved the country toward full employment -- and it would have cleaned up the Gulf oil spill as well. Government is destroying our economy and despoiling the environment to boot. As Ronald Reagan understood so well, government is not the solution -- it is the problem.
Dr. Jeffrey Folks taught for thirty years in universities in Europe, America, and Japan. He has published many books and articles on American culture and politics.