[Note: This essay was written on 3/7/2015.]
The third season of the Netflix political-drama, House of Cards, chronicles cunning Democrat politician Francis Underwood’s ascent to the highest political office of the American Empire. As with so many grand leaders, Underwood seeks a grand program with which he might win the confidence of his party, and the trust of the American people. Grabbing the presidency not by popular vote, but through his VP chair, Underwood needs something big to tantalize his constituency to secure his position in the next election.
His solution? “America Works” (or “AmWorks”), a $500 billion jobs program aimed to add 10 million people to the labor force; how ambitious! But $500 billion is a lot of money, where will it come from? Underwood proposes to dismantle an array of entitlement programs, from Social Security to Medicaid in order to free up the funds—a bipartisan heresy in both this reality and Underwood’s.
Notwithstanding some non-fictional commentators lauding AmWorks as a potentially great idea—minus, of course, the part about cutting entitlements—this program simply would not work. To understand why, one needs to perceive just what it is a jobs program like AmWorks aims to do.
As revealed through a minor plot point, the fictive AmWorks involves direct state-subsidies to various businesses, with the intent that the funds will pay the wages of new employees. On what basis the government selects firms to receive funding is left unsaid, whether first-come, first-serve, or favoritism and nepotism matters not. Regardless of how such allocation decisions are made, they can only be wholly arbitrary from the point of view of economic efficiency.
The normal mechanism of job-creation on a free market is supposed to be driven by the choices of hundreds, even thousands, of individuals. For every economic decision made, slight changes are imputed into the network of prices. Thus, under normal conditions, a business is ready to expand and genuinely create new jobs only when the decisions of consumers align in a way that justifies expansion. Put another way, a business can only begin to employ a greater proportion of society’s resources toward the production of some good or service when that business is given sanction via the choices and actions of consumers.
What AmWorks attempts to do, however, is quite different. The technicians running any jobs program, real or hypothetical, are few and concentrated—a relatively small group of bureaucrats. This tiny crowd presumes to make decisions that, on the market, would usually involve the wide-spread knowledge and choices of thousands of different people.
But instead of allowing the tax-payer to keep the fruits of his labor and use them as he sees fit—in a way “subsidizing” those firms he chooses to patronize—the bureaucrat can do no better than to take a guess at which firms or industries the consumers might choose, if given the choice.
This means that whatever jobs America Works might create, they can only be genuine “new jobs” insofar as they align with what consumers would actually choose to spend their money on. Handing out money willy-nilly to any and every employer simply cannot guarantee sustainable job growth, or a healthy labor market.
For example, a $50 million subsidy to, say, Jerry’s Shit Sandwich Shop, may very well create 1000s of new jobs. But if no consumer is willing to buy shit sandwiches, nothing props up those new jobs but hot air, i.e., the government dole. All that can be accomplished here is the creation of new dependencies, wherein government pays people to contribute to the production of goods that consumers do not desire. Until consumers decide they want what Jerry’s shop has to offer, the jobs he creates employing new sandwich-makers are meaningless in regard to economic growth.
Moreover, slashing entitlements, despite the typical anguished cries and apocalyptic visions, is ultimately a good idea. Welfare programs are economically harmful for similar reasons that AmWorks-like job programs are harmful: they grab up wealth and resources from the hands of their rightful owners in the private sector and toss them into a government system of allocation which, by its very nature, can’t succeed. Of course, this isn’t the sole problem involved with such programs, but our basic lesson serves to explain, to some extent, their failure: government’s spending decisions are always arbitrary and inefficient.
The question regarding entitlements, though, is when to abolish them, not if. There remains a colossal structure of burdensome government policies and programs which continually and ever-more suck the life from the private sector. Short of severing this massive ball-and-chain, escape from welfarism seems unlikely.
The seemingly-limitless military expenditures; the Federal Reserve and all of its tinkerings; the tens of thousands of pages of regulations added to the books each year; the minimum wage, licensing, permits, certifications, and all other artificial barriers to entry (for both business and labor); intellectual property and all other de facto monopoly grants; the propping up of prices for various industries (such as agriculture); the extravagant salaries and benefits of public employees; the ever-rising tax burden, etc. That’s hardly the beginning; the list of ruinous programs is too long to compile.
It strikes one as bizarre to so often hear the American right-wing complain and hector about domestic spending, welfare benefits, and entitlement programs, yet in the same breath wholly endorse the obscene waste of the military-industrial complex. Before righteously condemning the little old woman for her food stamps, let’s start with the Lockheed Martin and General Dynamics. These welfare recipients are regularly awarded billions in stolen tax-dollars to create the elaborate machinery of wholesale slaughter (which often turn out to be absolute pieces of crap anyway!).
Strategically, from the viewpoint of the tax-payer, the urgency of repealing, say, the global military empire trumps that of domestic welfare programs. Unquestionably the costs of entitlements soar, yet it is no surprise why the welfare rolls swell as they do. The American economy is one rotten at its core, with its lifeblood—money—destroyed and devalued by government fiat.
Today, jobs are created not through real consumer demand, but with ill-gotten loot stolen from its rightful place in the economy. Prosperity is attained not through real savings and investment, but through debt and the expansion of the money supply. An economy based on war and inflation will undoubtedly expedite the need for massive welfarism and fraudulent jobs programs like America Works, it’s to be expected.
Suggesting the wholesale repeal of welfare programs before eliminating those institutions and policies most responsible for the bad economy in the first place seems to place the cart far before the horse. The real solution: abolish all government programs that do not directly create dependency first, allowing the tax-dollars to flow back into the hands of their rightful owners (while simultaneously forgoing a massively harmful shock to welfare recipients). The decisions that people make with their own money will determine which businesses can expand, and this will dictate the creation of new jobs.
If the goal is genuine, sustainable job-creation, we must allow consumers to choose which firms are worthy of growth via their own patronage, not sending government to steal it away from them before they get the chance. Rightful owners will almost always spend their money more wisely, based on their own needs and wants, than will a bureaucrat, whose only incentive is to spend more; to increase his own budget. The market economy naturally allocates resources to their best stewards.
If, on the other hand, the goal is to eliminate entitlement programs in a humane, non-catastrophic way, it can only be done when other massive state-imposed burdens are repealed, lifted from the backs of not only the poor, but from those on all steps of the economic ladder. Prosperity accompanies a society built on the basis of free association, where there exists no presumption that government is a rightful third-party to any conceivable transaction. Only freed from these hindrances will welfarism be defeated and a significant number of jobs created, it is unjust and unrealistic to expect otherwise.
A plan like America Works, though, solves none of this. It threatens to pull out the rug from under those trapped in a system of dependency, while at the same time promises jobs that are inevitably unsustainable. An obvious parody of Obamacare, with its exaggerated promises and results that fall laughably short, America Works is nothing more than a political maneuver. Healthcare, jobs programs, “stimulus packages,” these are seen as desirable, populist measures to the average American, and it behooves any presidential candidate to put his weight behind one of them to win over voters.
Ultimately, Frank Underwood, like Barack Obama, offers nothing but the same stagnation, shrouded in the attractive garb of reform. Like Obama, Underwood deserves to end his presidential term a laughingstock, at best an incompetent blowhard, at worst a deceitful tyrant.
But hey, that wouldn’t make for very good television, would it? I await Season 4 with bated breath.