Economic vain hopes

Jacob Sullum makes an excellent point in regard to the exaggerated hopes (at least on the part of Obama-favouring media pundits) for job creation if Barack Obama is elected:

[Many Americans] probably will be disappointed, because Obama seems to view job creation not only as something the government does with taxpayers' money but as an end in itself. That's a recipe for wasteful spending that will divert resources from more productive uses and ultimately result in lower employment than would otherwise occur.

Obama says he will "transform the challenge of global climate change into an opportunity to create 5 million new green jobs," which he likens to the economic activity triggered by the personal computer. This way of looking at climate change is a variation on the broken window fallacy, according to which the loss caused by a smashed window is offset by the employment it gives the glazier.

By the same logic, Obama should view war, crime, and hurricanes as opportunities to create jobs. All three generate economic activity, but we'd be better off if the resources spent on bombs, burglar alarms, and reconstruction were available for other purposes, instead of being used to inflict, prevent, or recover from losses.

Almost as a throw-away introduction to the article, Sullum also points out that the turmoil in the real estate and banking sectors has not directly impacted other sectors of the economy yet:

Despite all the facile comparisons between the current economic situation and the conditions that preceded the Great Depression, the most recent figures show GDP continuing to grow, with unemployment at a historically modest 6.1 percent.

It must be remembered that all economic data is collected after the fact, so that what we think of as the "current" numbers are only indicating the situation from one to three months earlier.