The enduring myth of government job creation

Jim Huffman Dean Emeritus, Lewis & Clark Law School
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A recent Gallup poll (see The Daily Caller story here) suggests that Congress and the president are not reading the pulse of the nation’s voters — or at least not very well. While lawmakers are caught up in battles over gun control and immigration reform, voters are far more concerned about jobs and the economy. Large majorities of voters identified job creation (86%), economic growth (86%) and deficit reduction (84%) as top concerns, while only around half said the same of gun violence (55%) or immigration reform (50%).

It’s not surprising that a largely dysfunctional Congress and an aloof president would misread or ignore voters’ priorities. With partisan flames constantly being fanned by the White House, and both Democrats and Republicans already pressing to shore up the support of their bases in anticipation of the next election, there is little prospect for legislative actions that would actually encourage economic growth — like tax and regulatory reform, entitlement reform, or deficit reduction.

But even if Congress were paying attention to voters’ priorities, the Gallup results could encourage lawmakers to pursue the wrong policies. Remember, overwhelming majorities of both parties said “creating more jobs” (90% of Democrats and 84% of Republicans) and “helping the economy grow” (88% of Democrats and 84% of Republicans) should be top priorities for Washington. Yet far smaller majorities said the same of deficit reduction (69% of voters) and tax reform (59% of voters). A significant number of Americans, apparently, see little or no connection between jobs and economic growth on the one hand and deficit reduction and tax reform on the other.

But if we are serious about economic growth, which is the only way to increase long-term employment opportunities, we need most Republicans and at least a few Democrats to acknowledge that government does not and cannot create jobs and produce economic growth by itself. For their part, Republican and Democratic politicians must be willing to ignore the special interests that finance their campaigns (in return for government programs, subsidies, and tax breaks) and focus their attention on eliminating government-imposed barriers to entrepreneurship, investment, and growth.

During the last two election cycles, Republican candidates repeated ad nauseam that government does not create jobs and that the best way for government to promote economic growth is to get out of the way. They were right. But do Republicans really believe it? Eighty-four percent of them told Gallup that job creation and helping the economy grow are top priorities for Congress and the president.

We can hope that what Republicans mean when they say government should create jobs and grow the economy is that government’s role in the economy is to facilitate private sector investment and entrepreneurship, and otherwise get out of the way. Republicans did rate deficit reduction (84%), Social Security and Medicare finances (77%), and tax reform (64%) as top priorities, so perhaps those actions are what they see as creating jobs and promoting growth. But if Republicans are on board for job creation and economic growth as affirmative tasks for government, as the Gallup questions imply, there is little hope that any Congress or president will take on the immense political challenge of getting government out of the way and allowing the private sector to do what only it can do.

Because the Democratic base consists largely of voters dependent on government programs or enamored with Keynesian economic theory, few Democrats in Congress will embrace the serious reforms upon which economic prosperity depends. So it falls to Republicans to keep Congress focused on making Medicare and Social Security financially sustainable, reforming and simplifying the tax code, and reducing the deficit through controls on spending. This will require Republicans in Congress to resist the inevitable pressures from those in their base with personal stakes in the vast array of federal programs, regulations, and tax expenditures.

Next time, Gallup should ask voters whether getting government out of the way is a high priority for Congress and the president. My guess is that the vast majority of Democrats will say no. Hopefully Republicans will say yes, and Congress will be listening.

Jim Huffman is the dean emeritus of Lewis & Clark Law School, the co-founder of Northwest Free Press and a member of the Hoover Institution’s De Nault Task Force on Property Rights, Freedom and Prosperity.