By Mark Penner, JMI Intern & University of Alabama Junior in Political Science and History
In recent news, there has been a major focus on the upswing of the economy as indicated by the decreasing number of persons deemed unemployed. Unfortunately “deemed” is the correct word for it, as described in this article in the Washington Post. While FDR certainly had his flaws, at least his Administration understood that persons receiving money from the government dole for doing make-work jobs aren’t actually employed. Yes, they are doing work, but not work resulting from a natural demand for labor. Attempting to portray an upswing in the economy by artificially inflating the number of Americans receiving a pay-stub is nothing more than a flagrant attempt to pull the wool over the eyes of voters and investors.Hayek tells us that the market coordinates time with interest, creating a relatively stable system. He goes on to assert that when the government interferes with the market–for example artificially inflating the demand for labor–incentives for mal-investment result. Hayek’s theory has played out repeatedly in the last two decades, first in the Internet bubble of the early 2000’s and in the most recent economic collapse. It is time to take some sound advice and stop using the printing press to inject stimulants into the economy. Just as with the chronic drug user, the high is enjoyable, but the crash in inevitable, and use is habit forming.Promoting inefficiencies is one of the largest harms of government interference in the economy. Since public works projects undertaken to stimulate the economy are designed with the explicit goal of reducing unemployment–without the need to return a profit–resources are often allocated in suboptimal ways. This was demonstrated not long ago in a comment made to me by a Florida 2010 census worker: “Recently, I was told to slow down. Apparently I was going too fast, exhausting the pool of individuals not registered with the census in my town too quickly.”Inefficiency as a policy is detrimental to the well-being of a corporation; in make-work programs it is rewarded. Wasting taxpayer money on unproductive projects in order to manipulate the appearance of economic recovery is base conduct, unworthy of this country.
2010
