Paul Krugman (the hard-left economist from the New York Times) worries about a long depression. Krugman is a hyper-Keynesian. He believes that government spending will save the economy. He worries that states cutting budgets will lead to even worse unemployment.

What Krugman never acknowledges is the public/private employment situation has gotten wildly out of balance.The average public sector jobs now pay nearly double what people in the private sector make and come with benefits for live. These are the jobs that Krugman is worried about losing. These are the jobs that I believe are driving us into the ditch.

People with a leftist/statist perception of the world worry about jobs. I worry about wealth. They want to create jobs. I want to create wealth. Jobs will come when people get back to the business of creating wealth.

To understand my perspective, you need to understand wealth. Wealth is creating something of value where there was none before. It is easy to understand in the world of manufacturing. You can start with raw materials, forge it into steel, machine it into a shape and bring it to market for others to use. A lump of minerals is transformed into a tractor which improves a farmer’s productivity. That form of wealth creation has many jobs associated with it.

On a larger scale, the way to grow the economy is to create more wealth. We can create more wealth by being more productive. Creating jobs that do not create wealth is just a form a charity. I can give a man a job to dig a hole in the ground…and I can give another a job to fill the hole, but it would be more productive if I just give them the cash and tell them to go get training in a field that needs them. Building turtle tunnel under a highway does not create wealth. It is not different then giving a man money to dig a useless hole. The Obama stimulus was loaded with useless jobs that failed to stimulate the economy.

I believe this to be a fundamental flaw of liberals and progressives. They view wealth as something to be scorned.  They bemoan the profits of oil companies and drug companies. They demonize banks which finance wealth creation. They long for the days when people rode bikes and purchased food from local farmers. (Isn’t it strange that people who want to take a step backward in transportation and energy call themselves “progressive”). Our president says his energy plan  “electricity rates would necessarily skyrocket” (LINK).

How can needless spending on energy create more wealth? It can’t.

To side with our president, you must believe that spending on green initiatives will transform the way we use energy to a form that is more efficient then our current model. This is a long term objective, but we don’t need a long term strategy. We need wealth creation now.  Secondly, you must believe that the lawyers who run Washington know more about energy creation than the engineers and scientist. Trust me…the lawyers and politicians don’t know squat. They created the Department of Energy back in the 70s to reduce our dependence on foreign oil. Since that time, we have become more dependent and that trend will continue with the policies of the current administration. Their stated goals and their intentions are less than worthless. They are a drain on the people who go to work everyday to create wealth.

So back to Paul Krugman. What he never acknowledges is that we need to create wealth. If we are to avoid a depression, we need to wealth. The government needs to stop steering the economy (a job they are miserable at) and should take the position of unbiased arbitrator between citizens. The government should strive to reduce roadblocks to innovation and small business, the policy of  “too big to fail” needs to stop, and we need to stop worrying about jobs for government workers who drain capital from those who create wealth.

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