Malo periculosam, libertatem quam quietam servitutem.



June 2011

Ignorance on Display: Obama Blames Increases in Productivity for Bad Economy

Written by , Posted in Economics & the Economy

Why can’t people find work? It’s the ATMs, stupid!

President Obama explained to NBC News that the reason companies aren’t hiring is not because of his policies, it’s because the economy is so automated. … “There are some structural issues with our economy where a lot of businesses have learned to become much more efficient with a lot fewer workers. You see it when you go to a bank and you use an ATM, you don’t go to a bank teller, or you go to the airport and you’re using a kiosk instead of checking in at the gate.”

This is really a special kind of ignorance. It is also the product of so much focus on jobs simply as an end. If the objective s just for everyone to have jobs, you think stupid things like that if you eliminate automation more people will have work. As the apparent leader of the new regressive movement, Obama has caught on to the fact that technology allows us to do more for less work. Clearly, eliminating the technological gains of the last decade, half-century, century, or more, would mean more people working for less output. A jobs utopia!

I’m sure my learned readers see the fault in this reasoning. If it takes more labor to produce less output, then everyone has less, because there is less to go around. Once upon a time, it took a lot more labor to produce the food needed to feed the populace. In the late 18th century, more than 90% of US workers were employed in agriculture. But thanks to technological innovation, the number of workers required to produce the amount of food the population needed soon plummeted. By Obama’s reasoning, that should have been a disaster for the economy! In reality it was quite the opposite. With all that labor freed up for other purposes – and the necessary food still being produced – the economy soared, ushering in the industrial revolution.

There is no end to the productive purpose for which labor can be employed. Making current endeavors more efficient does not, as Obama claims, reduce unemployment – it merely shifts labor to new sectors, where new waysare found to make our lives better. And that, ultimately, is what work is all about.

So no, improved efficiency is not a “structural issue” in the economy; it’s a structural benefit. Structural issues are the things created by big government proponents – such as Barack Obama and his predecessors – that punish productive people for being productive (capital gains taxes, excessive regulations, highly progressive tax rates, etc. etc) and reward unproductive people (often those with particularly strong political connections).

Not that we needed any further evidence against the futility of central planning, but is there any case at all remaining when the would-be planners are this ignorant?