Three Million Jobs?

President-elect Obama is now promising to create three million jobs. He had earlier promised 2.5 million.

If successful, Obama would become the first president in U.S. history to create even a single job.

He forgets that his plan has opportunity costs. It can redirect wealth. But it won’t be creating wealth. Every worker screwing in energy-efficient light bulbs is a worker that can’t be doing something else. The money used to pay these workers’ salaries must be taken out of the economy before it can be put back into it.

These jobs will be touted in press releases and the evening news, of course. But don’t expect very many people to point out that they will not actually be new jobs. Just different jobs.

Much of the necessary spending will be financed by debt. Every dollar lent by investors to the government is a dollar that now cannot be used for private investment. Obama’s program cannot create new opportunities on net. It will crowd out other opportunities.

There is plenty that Obama can do to make it easier for others to create jobs. Regulatory compliance costs are now higher than Canada’s entire 2004 GDP, for example. Identifying regulations that hurt more than they help — and repealing them — could do a world of good. But no president can create a job. By the very nature of government, the president must taketh away before he can giveth.