Weekend Economists Rise Again August 10-12, 2012

[Demeter]

25. Can Government Create Jobs or Not? By David Sirota

http://www.nationofchange.org/can-government-create-jobs-or-not-1344605218

I'm confused by Republicans in Washington, and here's why: For most of President Obama's term, they have ignored the millions of jobs the Congressional Budget Office says the 2009 stimulus legislation created and instead argued that the government is incapable of boosting employment. Summing up the larger sentiment, Sen. John Kyl (R-AZ) in 2011 said "government spending doesn't create jobs," and Sen. Kelly Ayotte (R-NH) insisted in 2010 that "it's not the government that's going to create jobs in this country."

Fast-forward to the present debate over impending budget cuts. Incredibly, the same Republican Party that once insisted the government can't create jobs is now barnstorming the country telling us the government can, in fact, create jobs — lots of them. This isn't an exaggeration. As The Hill newspaper reports, Republican senators — many of whom suggested government can't create jobs — are hosting town hall meetings to sound the alarm about how proposed defense spending reductions "would cause significant job losses" and therefore hurt the economy. Ayotte's rhetorical paroxysms are especially illustrative — and perplexing. In a CNN interview to promote the events, the New Hampshire senator — the same lawmaker who said, "it's not the government that's going to create jobs" — implored Americans to "think about (the Pentagon cuts) in terms of jobs, 136,000 defense jobs in Virginia. They have to issue layoff notices before the election, so members of Congress need to come together on this."

So, as I said, I'm confused. Do Republicans believe government cannot create jobs? Or do Republicans believe the government is so good at creating jobs that we can't even minimally reduce the largest military budget in the world for fear of layoffs? Because of the rhetorical backflips, there is no discernible answer to these questions — but there is an explanation for the contradictions. Since at least the 1980s, Americans have been inculcated to think of the military as separate from "government" — even though the military is part of the government. In fact, it's not just any old part of the government — in terms of budget and manpower; it is one of the leading entities that put the "big" in the concept of "Big Government." Yet, in discussions about national priorities and spending, many still reflexively see the Pentagon as wholly separate from everything else. This is not just the view of Republican senators — it is a pervasive misconception in the larger population. As an example of that fact, behold an emblematic locale like Colorado Springs.

According to the Colorado Springs Business Journal, "One of every three residents of the (region) depends directly or indirectly upon the military" — that is, upon the government. That makes the area as close to a ward of the state as it gets in this country. And yet, because residents there (like many Americans) psychologically separate the military from "government," the city's Republican-leaning voters typically send anti-government conservatives to Congress. No surprise, these lawmakers often embrace the same contradictions as their Republican Party brethren in Washington — when it comes to non-military spending, they imply the government can't create jobs, but when it comes to military spending, suddenly they tout the government as a crucial force for job creation. Of course, economic data suggest that in comparison to other government agencies, the Pentagon is a relatively inefficient job creator. But just like so many other public institutions, it does indeed create and sustain jobs. In doing so, then, the Pentagon is a stark reminder that Republicans' contradictory rhetoric on job creation isn't rooted in economic facts — it's driven by an ideology that circumnavigates inconvenient truths.