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Wednesday, September 3, 2008

Dear Gov Strickland, please leave my economy alone.

We're saved! Ohio's government now has a super awesome, totally strategic plan for economic development. The veritable magic wand - all they have to do is wave it and jobs will be created, people will be richer, and we can finally start living the good life. If only the state came out with this before, things could have been so much better.

Their plan has three goals: growing our income, creating jobs, and expanding productivity through innovation. All great things for sure. One of the most laughable parts of the executive summary is their goal to "operate government at the speed of business". For this, all they have to do is check off a list of initiatives and their goal will be accomplished. Good for them!

The unfortunate part of the plan is that it will never work. How can I know this without even trying out the plan first? Because governments simply do not create jobs. They don't increase our income in any way, shape or form. The best they can possibly do is take one person's income and give it to someone else who wasn't quite as productive.

There was recently a great article about this very subject. Claiming that governments create jobs and wealth is nothing more than a simple exercise in Frédéric Bastiat's parable of the broken window. The money they would use to create these jobs and wealth only comes from others who would be spending it more efficiently on the same goods on the open market. It's the equivalent of paying someone to move a pile of dirt across the field. The person you pay to move it will have a job and get more money. But it does absolutely nothing to increase the wealth of society. It's still just a pile of dirt in a different location.

This isn't just a party issue, either. People from both political parties, left and right, from all economic classes still believe this. They say that if the candidates from their own party were elected, there would be more jobs created. I think they're all wrong.

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