Tag Archives: Massachusetts

The Great Jobs “Creation” Debate: Confusion And Delusion

CAN ANY PRESIDENT REALLY "CREATE JOBS?" Public domain photo, Wikimedia Commons

See if you can find any cause-and-effect relationship in this repartee from Wednesday’s televised debate among Republican presidential candidates:

Moderator Brian Williams:  “Gov. Romney . . . Massachusetts ranked only 47th in job creation during your tenure as governor . . .”


Gov. Mitt Romney:  “We created more jobs in Massachusetts than this president (Barack Obama) has created in the entire country . . .”

Gov. Richard Perry:   “We created more jobs in the last three months in Texas than he created in four years in Massachusetts . . .”

Perry:  “. . . Michael Dukakis created jobs three times faster than you did, Mitt.”


Romney:  “Well, as a matter of fact, George Bush and his predecessor created jobs at a faster rate than you did, Governor.”

We are doomed if we base our debate about the economic crisis on a fallacy. The fallacy is that a governor or a president can create jobs, or fail to create jobs.

Truth is, the president of the U.S. and the governors of the states can not and do not directly create jobs, nor do they have any but the most ephemeral impact on economic conditions and events that affect jobs in the private sector.

If a governor decided by himself to add an employee to his executive staff, then I suppose you could give the governor credit for creating one job. If a governor decides to add a new bureaucratic agency, consisting of 100 state employees, then I suppose you could credit him with creating 100 jobs.

But the president and the governors do not have it within their power to add or subtract a single job from the private economy. Even the Federal Reserve Board has only feeble power to affect the economy, through manipulation of interest rates and money supply, and the FED is independent of the president and Congress.

Congress has limited power to indirectly stimulate the economy by increasing government spending. But just now, spending is out of favor, and many politicians and voters support cutting government spending and debt.

The only way government can directly impact private job creation is by funding a project or a program that must hire workers in the private sector. For example, the government could decide to build a bridge, or a water system. The government would contract with private business to build the bridge, and the business would hire workers.

Presto! New jobs are really created to build the bridge! That’s a direct cause and effect between the bridge and new jobs.  Plus, the bridge project and its workers have a ripple effect, adding more jobs in the community, and perhaps opening up the property on the other side of the bridge to new economic development. Simple, no?

— John Hayden

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