Wednesday, May 9, 2012

A Note on "Job Creators"

Something I have said before in the pages of this blog: when economists talk about creating jobs we are talking about sustained economic activity that creates economic growth and related jobs.  We are not talking about, therefore, a three month job repaving a road.  What is confusing of course is that we also speak about fiscal stimulus getting the economy going and lowering the unemployment rate.  This is true, but the unemployment rate lowering is not, in general, from the people we employ to fix roads but from the new economic activity they ands the project generates which breathes some life into a moribund economy.

Which makes it all so frustrating when candidates for public office are asked about "job creation."  The right answer to this question is to talk about how much you have done to advance public education, how much you have assisted in creating a higher education system that is helping R&D, how much you have done to create the infrastructure (and not just roads and bridges) to support a modern economy that will grow and create jobs.  But the answers are inevitably along the lines of, "well I helped get money for the project to build X Y and Z and they hired 1,000 people to do it."  Which is all well and good but pretty much beside the point.

And I don't blame politicians so much, they need to say something that sounds good and concrete, but they often twist themselves into pretzels in so doing.  I mention all of this because the Willy Week has a new fact checking article on jobs claims and find that some numbers don't add up.  This is all well and good, I suppose, but pretty much beside the point.  They miss the big picture too.  Personally, I am gratified when candidates like Jefferson Smith get uncomfortable talking about specific numbers and defer to more general themes like education because they are right to do so.  That is not, however, what voters want to hear apparently.  But unless you are one of a tiny number of people directly hired by a specific project, you shouldn't care about such minutiae - what you should care about is a state that has fertile soil for economic growth.


Jessica said...

I don't think Charlie's comments were "I helped get funding". His were "I led a division, and was an executive, but I was still part of a team." HDR is a huge engineering firm, and I appreciate that he was an executive of more than just a 10 person company. It's closer to running the large, cumbersome, slow moving bureaucracy that is the City of Portland. If you don't know the beast, you can't change it!

OhNoNotAgain said...

In the hurly burly of a campaign, it IS a strong pull to make strong statements, name names, cite statistics, trumpet The Numbers. It is, arguably, less self-aggrandizing to say, "Gee, I'm not certain.". Haven't we suffered enough with Grand Statements only to be let down later? We can do LOTS worse electing leaders who make large claims, which they are then bound by, either because they've made "promises" they can't keep, or worse, made in ignorance of what's actually do-able. Jefferson Smith has a track record of healthy skepticism, and working with diverse viewpoints to attack problems. We all want solutions. Let's embrace our own inner skeptic.

Torrid said...

I agree with OhNo, I feel more confident about success when Smith brings out a lot of little ideas that all serve the same themes and goals. Every million miles you have to take a first step, and small positive movements have a tendency to compound and snowball if applied diligently. Do enviro retrofits on our schools stop climate change and make everyone an A student? No, but it helps and it's cost effective. Does sending out a human trafficking hotline packet with business license renewals stop the smuggling of young people for sex work? No, but what if you're one of the people saved by making the call? Does moving $250k into credit unions take down the Big 5 banks? No, but it sets us on the right course and reframes our priorities--and makes Portland a state leader that other cities can look to in that area. The smaller the promise, the more likely it will be fulfilled.

Finally, the whole "job creator" thing drives me nuts, because businesses don't create jobs, markets do. Businesses respond to those markets by hiring people. No demand, no hire. And yet some candidates act as if we can just incentivize businesses to hire a bunch of people and then wait for recovery to begin. Pffft