Thursday, February 19, 2009

Mankiw and Caplan on "Jobs Created or Saved"

Mankiw makes this smart comment based on public choice theory about the use of the expression "jobs created or saved" by the government:

The expression "create or save," which has been used regularly by the President and his economic team, is an act of political genius. You can measure how many jobs are created between two points in time. But there is no way to measure how many jobs are saved. Even if things get much, much worse, the President can say that there would have been 4 million fewer jobs without the stimulus.

Caplan adds:

Yes, yes! Let me add, though, that when politicians are spending a trillion dollars, any sensible voter would insist upon a measurable standard. "Create or save" is simultaneously absolute nonsense and an act of "political genius" because political genius is nothing other than the masterful manipulation of voter irrationality.

On a dark note, government's ambiguous discourse indicates that what the government is really trying to tell us is this: "no matter the size of the fiscal burden that we're creating for current and future generations, the only truth is that we're not sure if this is going to work." Wow, I can't believe that I'm back to Voltaire's dilemma between knowledge and happiness!

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