This was sent in from regular reader and contributor ‘Logan’, also an astute observer of political events:
2/11/09 SPRINGFIELD, Va. – President Barack Obama said Wednesday that heavy-equipment maker Caterpillar has informed him it will rehire some of the thousands of workers it has laid off in recent weeks if Congress passes an economic stimulus bill.
2/12/09 EAST PEORIA, IL. – President Obama today repeated the claim we asked about yesterday at the press briefing that Jim Owens, the CEO of Caterpillar, Inc., “said that if Congress passes our plan, this company will be able to rehire some of the folks who were just laid off.”
Asked if the stimulus package would be able to stop the 22,000 layoffs or not, Owens said, “I think realistically no. The truth is we’re going to have more layoffs before we start hiring again”
2/17/09 WASHINGTON, D.C. – President Barack Obama has signed into law the most sweeping economic package in decades, a rescue plan designed to create millions of jobs and boost consumer spending.
3/17/09 PITTSBURGH (AP) – Caterpillar Inc. on Tuesday announced plans to lay off more than 2,400 employees at five plants in Illinois, Indiana and Georgia as the heavy equipment maker continues to cut costs amid the global economic downturn.
Now that’s change you can believe in.
As I’ve written many times before, government cannot ‘create’ any jobs. Government jobs (or private sector jobs sponsored by the government) simply drain resources from the real economy in the form of taxation or borrowing – both of which are paid by the private sector, the former in overt confiscation and the latter in the form of inflation, the stealth tax on every private dollar earned or owned. The net result is worse than simply the absence of any true, viable economic gain. Far worse, the result is the inefficient allocation of capital (capital allocation by government fiat rather than market determination of capital value), and unintended consequences to the real economy that are only felt far down the line.
But this is only phase one. As covert nationalization fails, government will overtly nationalize infrastructure projects and financial sector firms, among others. Then we will once again re-learn the Law of the Commons (also known, aptly, as the Tragedy of the Commons): that, in the absence of incentive to maintain or increase the value of a given resource, the functional (and capital) value of the resource deteriorates rapidly over time.
As if this law needed an additional proof after the human tragedy of the 20th century statist experiments, we are in the process of creating one in the 21st century United States.