Obama’s 3 Million Jobs, Part 1

This is the first of a three part series.

One of the easiest ways to illustrate that Obama is a total phony is analyze his ongoing claims that he will create (or save) 3 million jobs. He has now included this as a major point of his faux-stimulus plan.

As this is more new jobs than has ever been created by any one organization, this would be ridiculous for any president to say. It is especially ridiculous for Obama to say this because—in his entire life—he has never employed one person. He is clearly not adequate to create 3 million jobs and this is not a casual inadequacy.

Don’t you agree? Don’t you agree that it seems preposterous that a person who has never found a way to create one job is going to find a way to create more than any president (or CEO) ever? If you don’t think this is preposterous, how gullible are you? Would you believe anything he said? What if he said he will create 4 million jobs? Or 5 million? 10 million? 20 million? What is your number? Would you still believe at 100 million? What all of these numbers have in common is that they are all equally ridiculous. It’s no more plausible that Obama could create 3 million jobs than 5 million.

Let’s put 3,000,000 into perspective. The largest US corporations employ 250,000 – 300,000 employees (and a only a few employ this many). The smallest employ 50 – 70. The average is just under 2,000 employees. This means that Obama is going to generate enough jobs to create, roughly, one thousand and five hundred new corporations. 1,500!! There are only 2,773 on the entire New York Stock Exchange. But wait, it gets more ridiculous…

The current minimum wage in the US is $6.55. Accordingly, if Obama creates the crappiest jobs possible to “help” these people and pays them minimum wage with no benefits it will cost the economy $19,650,000 per hour to create these jobs. Adding the appropriate payroll taxes and payroll expenses, the number gets above $25 million/hour. Multiply that by the 40 hour work week and the total weekly cost is over $1,000,000,000. For those of you that can’t read between the lines, this means that it will cost over a billion dollars PER WEEK to create or save these jobs.


Analyzing the issue deeper

Though the points above illustrate that it would be unlikely (because of Obama’s lack of experience) and impractical (because the high cost will actually hurt the economy) to create 3 million jobs, the points do not illustrate or prove the impossibility of Obama to create the jobs.

To illustrate that it is impossible, you must examine the economic fundamentals of job creation. You must explore the question: how and why are new jobs created? It should be obvious that employers do not create jobs to be nice and do not purge them to be mean. There are certain economic conditions that must be met to create and maintain a paid position of employment.

In order for an employer to create a job, there must be a market need for it. More specifically, the job must generate enough revenue to support its continuation. For example, if I owned a pizza shop that only served 20 – 30 pizzas a day, I couldn’t hire 50 pizza makers. There would not be enough revenue to support their pay. Even if I wanted to hire them to be “generous”, my money would soon run out, my pizza shop would go under, and the 50 pizza makers would be right back where they started—unemployed, as would now the entire staff of the pizza shop.

What this demonstrates on a conceptual level: 1) The result/output of a job (either it be a good or service) is what gives it value—not the effort put into it and 2) What gives the output value in the marketplace is consumer demand. To lack either output or demand is too lack value. This concept refutes a commonly held misconception that the labor that goes into a good or service is what gives it value. This misconception is called the labor theory of value, which in essence asserts that products are more valuable as more labor is put into them.

An example that easily refutes this misconception: A person can perform several hours of hard labor digging thousands of holes. They can double their efforts filling the holes, yet at no point does this labor generate any value, it's useless energy.

In order for this labor to be valuable, it must produce something people want…the laborer must dig the holes and fill them with fence posts, landscaping bushes, etc. As such, it is the output (the new fence, the attractively landscaped yard) that gives the labor value; not the other way around.

The more important of these two conditions is the second: consumer demand. This portion is a little more complex but it is essential to understand, so stick with me. In the marketplace, even the fence and landscaping have no value if there is no consumer demand for these products and services. Someone must want a landscaping service. Someone must need a fence for their property. So even if one tried to sidestep the “labor” problem by producing infinite goods and services, their efforts are equivalent to merely digging holes if no one wants the goods and services. Perhaps a couple of visual descriptions will help:

A consumer demands a good or service ----> this makes the good or service valuable ----> the effort made to produce the good or service makes the labor valuable

The labor theory of value asserts:

Laborers work hard to produce a good or service----> because so much work/labor has been put into the product or service, the good or service is valuable----> because it is valuable, consumers want it

No matter how many people you hire, you cannot force value into the economy by assigning millions of tasks to day laborers. There is no such thing as “value osmosis”. It is the logical equivalence of sleeping on your textbook to learn Chemistry. (Which I tried my freshman year in Gen Chem and it didn't work.)

Placing this in the context of our current economy

One of the primary symptoms of our current economic state is lack of consumer demand. As explained above: without consumer demand, it is not possible to create jobs—especially such a high number. More emphatically, it is economically ridiculous to state that we could successfully answer a decrease in consumer demand with a surplus of jobs. It is therefore impossible to create 3 million jobs. This principle cannot be modified. Obama is not magic.

Remember the amount of money I referenced earlier…that it would cost a minimum of 1 billion dollars ($1,000,000,000) a week to hire 3 million workers. Hopefully it is obvious that this much spending is not an economic cure. But just in case you need more:

Have you ever heard the adage, “You can’t buy your way out of debt”? When your personal budget is low, do you go on a spending spree? You try to save money. You try to spend wisely. You surely don’t go out buying things that are not necessary in hopes of somehow kick starting your budget. The national budget works the same way.

When the economy is bad, the government cannot spend the nation out of debt. It doesn’t help the economy to spend money on unnecessary “special projects” just like it doesn’t help you to spend more when your personal funds are low. Sure a newly paved Main Street may look nice…just like a new 52” flat screen TV would look nice in your living room and sure the new road might be great income for the guy paving it just like the flat screen purchase would be a great commission for the sales guy at the electronic store. However, the purchase would send you further into debt. Similarly, paying 3 million people to perform unnecessary tasks that answer no consumer demand is an abandonment of unchangeable economic fundamentals.

Even if you took the attitude…“Who cares about the economy? Who care’s about the other 300 million Americans? Let’s try to help this special 3 million!”…even if you took this attitude, these people would not be helped. For what happens once all of the roads are fixed and we have national parks coming out of our ears? Three million people working a full-time work load will be able to get all of this finished quickly. At 40 hours/week, there would be 120,000,000 hours (13,700 years) of labor in one week! What do they do when they are finished? They’ll be right back to unemployment status. Then what? Other special projects? Then other special projects? And once the third round is finished what happens? One can only give people but so many bogus projects before running out of tasks.

This is elementary stuff...

so surely Obama knows this. Right? They are simple to understand…I explained them in merely a few moments. Both theory and practice have proven this to be true for many years. Surely a smart guy like Obama can understand this. Fearsomely, it is most likely he does understand this all very well. So the real question is, why the facade? What is his motive? Obviously this is a malicious political trick. I will explore this trick—this deceptiveness—and its implications in part two of this post:

Obama’s 3 Million Jobs, Part 2: Obama is a Fraud

:::helios:::