From: jwh@citi.umich.edu (Jim Howe)
Subject: Re: YYYEEEEESSSSSSS!!!
Date: Fri, 13 Nov 92 08:45:46 EST
Organization: IFS Project, University of Michigan
Reply-To: jwh@citi.umich.edu
Keywords: lame birds, Election, deliverance.

In article <1992Nov12.205226.22312@vexcel.com>, dean@vexcel.com (Dean Alaska) writes:
|> In article <50B=6c#@engin.umich.edu> jwh@citi.umich.edu writes:
|> >sector.  I don't believe that government can *on net* create new jobs
|> >via fiscal policy.  It can rearrange which jobs exist, but this won't
|> >necessarily improve the overall picture.
|> >
|>
|> Two comments on this.  If intelligent investments are made in a variety
|> of infrastructure, then the efficiency of production will increase
|> and productivity along with it and this leads to more jobs than just
|> those directly involved with the government spending.  
|> The applicable phrase is "intelligent investments".  
|> Clinton must avoid too much pork for this to work and
|> that is his greatest challenge.  
|> 

What makes government employees any better judge of what makes a good
investment than someon in the private sector.  A person in the private
sector has a real incentive to invest in something that will yield a
real return.  In general, money in the private sector will flow to
where it is needed.  It's not perfect, but nothing ever will be, however
it is certainly better than some bureaucrat spending money which isn't
his and which he has no vested interest in.  In addition, there is this
little know concept known as freedom.  I don't care if government *can*
invest money better than the private sector.  Government's only legitimate
purpose is to protect the rights of *all* its citizens.  It does not
exist to 'optimize' the allocation of goods and services.

|> Secondly, only some types of
|> private investment create jobs.  Speculative investment does not
|> create jobs or help the economy in any way.  So when speculative
|> investment looks good, as it did in the 80's with all the takeovers,
|> job creation is lessened.

I believe if you do some investigating, you will find that speculation
is an economically beneficial activity.  It is also ironic that you
should mention lessened job creation in reference to the 80's.  The
80's were a period of tremendous job creation.  18 million new jobs
is nothing to sneeze at (and they weren't mostly low paying either).

|> 
|> So the question is, which lowers job creation intensity (jobs/$ invested)
|> more, government pork, or nonproductive private investment?

The real question is, who owns the money which will be invested.  I don't
believe it is the business of government to take money simply because
it *might* (but probably won't) invest it more 'wisely' than the private
individual.  Government theoretically could require all people to take
aptitude tests to determine where a person could 'optimally' be put
to work.  It could require, for instance, that a person with a good
doctor potential attend medical school.  This may optimize the allocation
of resources for the benefit of 'society' but it is hardly the type
of environment I would want to live in.  Likewise with investment funds.
People have the right to spend their money as they see fit.  It is
not up to the government to tax away money because it might be misspent.
Taxes should be used to pay for reasonable and legitimate government
services only, not to implement some politician or bureaucrats vision
of 'proper' investment.


James W. Howe                  internet: jwh@citi.umich.edu
University of Michigan             uucp: uunet!mailrus!citi.umich.edu!jwh
Ann Arbor, MI   48103-4943         

Newsgroups: alt.activism