9/14: Can U.S. government grow sustainable jobs?

Moderated by Rick Badie

We need jobs. Metro Atlanta’s jobless rate is 10.3 percent; Georgia’s is 10.1 percent. A widely debated question is whether the federal government can create or foster sustainable employment. Some say yes, government initiatives can jump-start growth. Others consider the notion pure fallacy. Here are local experts’ views.

Jeffrey Rosensweig, an associate professor of international business and finance at Emory University, believes teachers, firefighters and police officers should not be cut.

Dorsey D. Farr, a partner at French Wolf & Farr, an Atlanta-based investment advisory firm, argues that increased spending isn’t an elixir for economic troubles.

What do you think?

20 comments Add your comment

resno2

September 15th, 2011
6:26 am

Who decided that it is the responsibility of the government to create jobs?

iRun

September 15th, 2011
2:31 am

The problem with privatizing SOME government functions is that you can’t ensure the private sector can provide the same “public good” to the entire US.

For example, the CDC – who employs some 10K people, most of them in metro Atlanta – provides a very valuable service to national security by monitoring infectious disease trends so terrible diseases don’t sweep the entire country. The movie Contagion is no joke.

If you were to privatize that I think there are several problems:

1. Who will be able to conduct the extraordinarily massive surveillance of these diseases, especially influenza, from year to year and provide input to pharmaceutical companies on which vaccines are needed for the upcoming year – FOR THE WHOLE NATION – and provide it with equipoise?

2. Would you trust any private company that size to perform that duty with the public interest in mind and, if not, are you comfortable with the measures we’ve seen private companies do to ensure their profit margins go up every year?
– non-profits might be a better “private” choice and are a major player even today

3. With CDC’s global investigations they provide information to the Department of State regarding political policies, tensions, and “chatter”, along with creating a link between the US Govt and other govts that gives the US leverage. BTW – this is not the only US Gvt agency to do so (Census, as well).

4. The highly educated scientists who now work for CDC would probably be hired on my the private companies but for higher salaries then they are right now. Scientists and physicians come to CDC, despite the lower (but still good) salary, because they are attracted to the following things:

a. The ability to pursue a personal interest in health without dictates/threats from a profit margin. This personal interest is usually driven by an unmet need that may not be very profitable, such as unintentional injuries (which are very prevalent but so diffuse a private service would find it difficult to market towards it).

b. A general satisfaction with knowing you are helping ensure the public health of the country.

c. Knowing you can work at one place for 30 years but have the ability to move to new health issues within the agency (ie, move from influenze to HIV over the course of career).

d. Not in the least knowing that you are genuinely safeguarding the health information of the entire country. This is very distinct from (b). We’re talking about health/medical data. Some may argue the gvmt can use that data against it’s citizens, but I have yet to see an example of this. However, we do know private companies exploit this all the time (hello, health insurance industry).

I could go on. Obviously, by now, you can tell I work at CDC. I’ve mentioned it before on various blogs. After working in both the private sector and the public sector for, at the moment, equal amounts of time I am convinced that certain government functions cannot be trusted to private companies. And, on a personal level, working for the government has increased my expertise in my field by leaps and bounds because I’ve been allowed to pursue training and hands-on experience in cutting-edge science areas because I, not a target market, identified where the “product” (ie, public health) could be improved by it.

Now, at the same time, because I work for the gvmt I have found areas that I think can be leaned up. But it has to do more with operations and logistics, not services. Some of these operations and logistics are legacy and need to go. Some are layers of bureaucracy added by each new administration, leaving old layers in place due to red tape or political climates.

But most gvmt services themselves….wouldn’t trust the private sector to provide them with equipoise (not an option) or with as high quality. Because of the nature of a private business and also my sincere doubts about the ability of a private company to generate the resources necessary to perform the function. And if it were several companies then I doubt their ability to coordinate to provide the service broadly with that needed equipoise, because by nature they are competitive.

It is a very complicated matter and I don’t think the answer is a single yes or no.

Que'Shayda

September 14th, 2011
11:03 pm

The feds subsidize unemployment benefits for three years, and now Obama wants to extend that again.

It makes some on the left uncomfortable and indignant to acknowledge, but the reality is that there are those among the long term unemployed who will not make the effort to work long as the government continues to pay them to sit at home and watch TV.

Doc Brown

September 14th, 2011
5:54 pm

Obumbler the Kenyan Marxist social organizer loaned bums who pay no income tax too much money in order for them to buy mansions. Now everyone is out of work because they are being forced to buy health insurance. The only way Obummer can create the jobs we need would be to kill the EPA and all of the regulations that kill business.

meno

September 14th, 2011
2:48 pm

And who do the employers expect to do the work of creating an educated work-force to draw from? All I’m saying is that everyone plays a part and it is simplistic to think the well-off are the sole creators of all that is good in an economy and government had nothing to do with them being well off. Also, when you have the luxury of writing off entire segments of the popluation as “uneducable” it is easy to claim your way acheives results. Our public sector (government) does not have such a luxury.

DawgDad

September 14th, 2011
12:28 pm

Ridiculous question posed. Just what is a “sustainable job”? Needs to be defined.

If you discount political trends then of course the US Government can create “sustainable jobs”. We have politicians (Congress would qualify as a “sustainable job”, right?), administrators, military, IRS, TSA, etc. Problem is, these jobs are sustained by taxpayers and they represent a net drag on the economy, and many (me included) would argue the Government has grown larger than what can be justified in this regard.

Can the US Government create sustainable jobs in the private sector? Yes, it can, but “sustainable” in a free market is always at some level of risk. The REAL questions that should be asked are (1) how much can we shrink the size and impact of Government at this time without making things worse, and (2) how much should the US Government invest in our economic future and in what ways?

My answers, in the big picture sense, would be (1) a whole lot more than ANYONE is talking about in the political arena, and (2) worthy, but we need to be very careful with this because Government inevitably serves personal political interests, is massively inefficient, and inevitably creates unintented consequences of enormous scale and impact (often very negative).

From my experience over many decades of life there are proven ways for the Federal Government to provide stimulus to the US economy producing positve sustained results: (1) privatize Government functions, (2) cut taxes for the people currently paying taxes [only], preferrably in the form of investment tax credits, (3) invest in research, (4) invest in the education and training of people who serve the country. I’ve witnessed and lived the impact of the combined effects of all these methods applied to a market – technology – and the sustained economic results are all around us (as well as many of the positive and negative unintended consequences). Start with the Internet as a great example. Government privatized massive segments of the Internet, invested heavily in its research and development, provided investment tax credits to stimulate massive private investment and growth in the technology sector (thank you, Mr. Reagan), and provided GI Bill benefits which assisted me and many others in entering and thriving in this sector.

Couple of observations:
1. This works best when Government is a passive investor with very long term objectives. Otherwise, everything is over-politicized, markets are manipulated, and inefficiencies arise.
2. There are ALWAYS unintended consequences. Look at the numerous issues with the Internet (fraud, privacy, other abuses), terrorism (could today’s terrorists, especially International terrorists, have pulled off 9/11 and other acts without the Internet and other technologies?)

My problem with the recent TARP and stimulus packages is they were little more than open raids on the US Treasury. My problem with QEn is that is not an investment, and in the long run is likely harmful. My problem with Government at the moment is too many left-wingers in the driver’s seats wanting more of my money and wealth (what little there is) to serve their interests and work against mine.

Doug

September 14th, 2011
12:01 pm

meno – where does the money come from to pay regular workers? I think the folks in Elkhart, Indiana have a much clearer picture than you. Employees do not create jobs. Employers–whether Joe the Plumber picking up folks from the labor pool or Kia building a new plant–create jobs.

If government ‘creates’ jobs by monetary inflation, the jobs will be liquidated in their turn as the factors of production become increasingly scarce and the Fed must curtail its monetary easing to avoid hyperinflation.

If government ‘creates’ jobs by transfer payments, net tax payors, including employers, are that much poorer. No new wealth has been created.

If government ‘creates’ jobs by public debt, it is diverting capital that would otherwise be available to the private sector, which must allocate resources according to profit and loss, not political patronage or dictate. Good luck finding a private business to pay for rebuilding Iraq and Afghanistan after paying for bombs to blow up Iraq and Afghanistan, for example. Or education for the uneducable. Or mortgages for the insolvent. And on and on. Then there’s the whole distorting effect of interest rates surrounding public debt.

Baker

September 14th, 2011
11:30 am

Whoa! Stand back! Rosenweig really went out on a limb there. Teachers, firefighters, and police shouldn’t be cut. Dear God man! Outrageous!

I don’t think the vast majority of non-crazy voters are pushing for these groups to be cut. Some would surely push for the legions of education bureaucrats (not teachers) to be cut. But when (most) people complain about too much govt spending, they’re not talking about teachers, cops, or firement.

meno

September 14th, 2011
11:23 am

Doug,

No I don’t see how things work in the world you envision. You ignore that those who are well off have already benefitted from others doing their part (so, again, they did not independently attain success). Also, the private sector still needs regular workers out there doing the heavy lifting–without them wealth cannot be created. Thus, I don’t think asking those at the top to also contribute to the overall good (beyond just being “job creators) is such a crazy idea.

blahblahblah

September 14th, 2011
10:53 am

seabeau, how did protectionism work out in the 1930’s?