Economics & Finance

These Job Makers are Going, Boys, and They Ain’t Coming Back

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Now main streets whitewashed windows and vacant stores

Seems like there aint nobody wants to come down here no more

They’re closing down the textile mill across the railroad tracks

Foreman says these jobs are going boys and they ain’t coming back to

Your hometown, your hometown, your hometown, your hometown

— Bruce Springsteen and E-Street Band, Your Hometown

Obama in Michigan

“The hard truth is that some of the jobs that have been lost in the auto industry and elsewhere won’t be coming back,” he said in a speech at Macomb Community College in Warren, Mich. “They are the casualties of a changing economy. And that only underscores the importance of generating new businesses and industries to replace the ones we’ve lost, and of preparing our workers to fill jobs they create.
 
He added, “For even before this recession hit, we were faced with an economy that was simply not creating or sustaining enough new, well-paying jobs.”
 
But some economists believe Obama is training people for failure.

Well, perhaps training people for his failure. The real problem is that neither Obama nor The Bruce understands what jobs really are.

We talk about jobs as if they are physical objects. We find jobs. We lose them. We trade them. We save them. We export them by shipping them overseas. Occasionally, we believe they are stolen. Metaphors are common in language and usually harmless, but sometimes we seem to forget that they are metaphors. This in turn causes us to misunderstand the phenomenom under discussion.

In the case of jobs, the metaphor stops us from asking what physical event actually occurs when jobs “go away” and “don’t come back.” Examining this metaphor tells us something that is very important and ignored in most political discussions.

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Stimulus Bungle

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Government as a real-world institution makes very poor decisions overall. Many people buy into the myth that individuals in government who are driven by a greed for power make better decisions than do people outside of government who act from other motives. A Fox News analysis [h/t Instapundit] provides profound evidence this is not the case.

Comparisons between foundering California and prospering Texas are all the rage now because the differences are quite stark. Now matter what area you examine, California is hurting badly. The state was Ground Zero for the housing bust. Unemployment is exploding and people are leaving the state in droves. Texas, by contrast, escaped the housing bust, has a balanced budget, a growing manufacturing sector and low unemployment compared to most places.

Clearly, California needs more help than Texas. (What form that help should take is another discussion.)

Look at this Wall Street Journal table (scroll down) that breaks down the per capita stimulus spending for each state. Compare California and Texas. Texas get more money per capita from the stimulus in virtually every single category, sometimes by quite a lot. When California does get more per capita it’s not by much.  When you factor in Texas’s significantly lower cost of living, the comparison looks even worse.

How did the political system crank out such a perverse result? It can’t be political pull. The Texas federal delegation is overwhelmingly Republican and therefore locked out of the stimulus distribution. Texas has even less pull with the Obama White House. As previously noted, Obama routed money preferentially to areas that supported him, which in the main Texas did not.

In a time of perceived national emergency and one-party rule, fans of government decisionmaking would predict that government would make even better decisions than usual, but,  unsurprisingly to the rest of us, in the bizarre sausage-making nightmare of the federal political system, Texas came out with more money per capita than California. If the political system worked as well as it does in the fantasies of leftists, all of the money that went to Texas would have gone to California instead. Even those of us who believe the stimulus foolish nevertheless believe that we should at least spend the money on the people hurting.

The guy with the surfboard needs the help not the guy with the Waverider. Why couldn’t the real-world federal political process figure that out?

texasvscalifornia

Texas and London

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I am a subscriber and a regular reader of the Economist despite their maddening tendency to recommend US presidential candidates that are left-leaning. The Economist is very useful on business and international issues and their US focused articles sometimes have a candor and simplicity that is lacking elsewhere.

A recent cover story titled “America’s Future – California v. Texas” described the falling fortunes of virtually bankrupt and high-tax California against the high flying economy of Texas. In typical Economist style, there is a one-page editorial type summary of the article in the front of the magazine and then two special sections on California and Texas, respectively.

One critical element of the story, however, is mentioned nowhere in The Economist’s article – that is of personal freedom vs. state control.

London, as anyone who has visited recently will tell you, is completely blanketed with security cameras. Virtually the entire city is under surveillance. At the same time, London has completely disarmed its residents of any firearms. Even the police, for the most part, are unarmed (although they do have heavily armed police at the airport and on call for other types of engagements). And building anything in London is difficult and slow, with myriad restrictions; notably they limit the heights of buildings and also require extensive open spaces outside the cities. London also has a famous congestion tax, which hits all drivers who enter the city limits and is managed through a vast system of security cameras, as well.

It isn’t fair to say that everyone in London is behind all of this; but these facts are generally accepted by the populace and aren’t likely to be changed any time soon.

The Economist basically reflects many of these views; they support free markets but with a huge dosage of state control. They have limited use for other types of freedom, such as the right to bear arms, or to live your life in private, or to drive where you please without paying inordinate taxes.

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Cool Retrotech

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Here’s a guy, Thomas Thwaites, who is attempting to make a toaster, literally from the ground up, starting with primary materials such as iron ore and mica.

For real retrotoasting, though, seems like he also should make the power source from scratch, with a small generator powered by either a waterwheel or a steam engine. The waterwheel approach might be fairly straightforward, but I’d guess it would be pretty hard to make a viable steam engine without using any machine tools.

Which raises, of course, the interesting proposition of making a machine tool without any machine tools to make it with…

Via Isegoria, who sadly says:

As you might imagine, Thwaites is not celebrating trade, technology, and mutually beneficial exchange; he’s condemning it. Sigh.

Hopefully the project will turn out to be a little more nuanced than that–Thwaites does say “The project won’t be a ‘how is it made?’ industrial promo or an anti-industry tirade either”…we’ll see.

The Leftists’ Doomsday Machine

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startrekdoomsday

Commenter Mike on this Hit&Run post on California [h/t Instapundit] observes:

First the once-great city of Detroit, then California, and soon the entire country if we don’t come to our senses, and fast.

 

Saul Alinsky’s new leftism combined with old-style Tammany Hall democratic party corruption is the political version of the Star Trek Doomsday Machine, devouring and destroying everything in its path. [links added]

 Heh. Here’s a video if you don’t remember the episode.  

Can’t say he’s wrong. Leftists have progressively destroyed the economic vitality of every region they dominated for more than a few decades. They do seem  inexorable  at times but I think we need to remember that things looked equally bleak back in the ’70s after leftists trashed everything. But the nation as a whole recovered and prospered.

Our diversity and compartmentalization remain our great national strength. If one region destroys itself with foolish policies, others can still prosper.  California and the Northeast are failing but Texas and other similar states are prospering.  

Perhaps this crisis will prove to be the end of the doomsday machine. Perhaps, like the Star Trek doomsday machine, their greedy, selfish overreach in this time of crisis will cause them to choke to death on the cream of their own runaway spending. This happened in the ’70s and led to the rebirth of the ’80s. Let’s just hope it doesn’t take as long this time.