Forget About Jobs, Darn it!!

Have you noticed that one four-letter word seems to be dominating the economic debate, lately? And it's a bad one, because by focusing on it we enable a dysfunctional view of economic reality. The word? Jobs.

We see it everywhere. The President wants to create more "jobs," both parties want to focus on "jobs," and conventional wisdom tells us that PresBo's re-election chances revolve around "jobs." The high point of this irrational fascination came when PresBo began urging businesses to hire more people. He blamed our economic troubles on, of all things, ATM machines.

“There are some structural issues with our economy where a lot of businesses have learned to become much more efficient with a lot fewer workers. You see it when you go to a bank and you use an ATM, you don’t go to a bank teller, or you go to the airport and you’re using a kiosk instead of checking in at the gate.”

This is the view of a Keynesian, who believes that any job, even one created by government, is just as good as any other. In his mind, ditching all ATMs and hiring clerks to take their places would create jobs, and so that's a good thing.

But the problem with this "jobs" fascination is quite simple: businesses do not exist to create jobs. They exist to make money. The jobs they create are a side-effect of that quest for money.


Asking a business to focus on creating jobs is like asking a hungry man to bake a pizza... it might help him achieve his real goal, but it's probably not necessary to it. Just like the man can eat by letting Dominoes cook his Pizza, the business might be able to achieve ITS goal through automation. Creating new jobs is not always essential to business success, so focusing on jobs alone misses the point.

The key to building strong growth in jobs isn't as straight-forward as borrowing another trillion dollars and giving it to any politician with a wish-list. The key to creating jobs is simple... demand.

Right now, with unemployment so high, and faced with the reality of rising taxes and massive amounts of new regulations, people are skittish and unwilling to spend all their money on the newest Nook... and I don't care if it DOES have a nifty text-to-speech feature that sounds like Kathleen Turner. In this environment, with all the uncertainty about just about EVERYTHING, people don't want to spend.

Which means that businesses don't want to take risks or expand their enterprises to meet that non-existant demand. Hence, no new jobs.

In this climate, businesses have to try and find new opportunities without expanding their employee base, because those employees come complete with a lot of extra baggage, responsibilities, and requirements... which means costs.

I am not attempting to chart a path out of our current situation, mainly because I don't have the hubris and ego necessary to believe I'm the smartest man on earth. Barack Obama I'm not. But I DO know this focus on jobs, while convenient from a political viewpoint, is counterproductive, at best.

Our job outlook will not improve simply because we want it to. We have to rebuild a climate where people are regaining their confidence and are willing to engage in economic activity... which is kind of what businesses live for, you know?

Businesses don't create jobs because the President asks them to, nor because they HOPE customer demand will increase. Businesses create jobs to make money... period. Without customer demand, nothing the government can do will "bring jobs back."