Fort Monroe: Citadel of Job Creation

A bit of controversy erupted this week when President Obama designated Fort Monroe in Virginia as a national monument, and described it as a “job-creating measure.”  As reported by Fox News:

The White House noted that a 2009 economic analysis commissioned by the Fort Monroe Authority said enacting a plan to reuse the fort that once played a critical role in the nation’s slave history would help create nearly 3,000 jobs in Virginia.

“Today isn’t just about preserving a national landmark – it’s about helping to create jobs and grow the local economy,” Obama said in a statement. “Steps like these won’t replace the bold action we need from Congress to get our economy moving and strengthen middle-class families, but they will make a difference.”

Congressional Republicans promptly began making fun of Obama’s obsession with describing every nickel of government spending as a “job creation” measure:

But a GOP leadership aide said framing the proclamation as an effort to create jobs is proof that the Obama administration is “officially out of ideas to create jobs.”

“The practical effect is to tell Americans they’ve fully exhausted ways for the president to act without engaging Congress,” the aide said. “It tanks on the straight face test to suggest this action is going to put Americans back to work.”

The aide expressed hope that this proclamation will represent a turning point.

“Hopefully, now that they’ve scraped the bottom of the barrel, the White House will finally drop the charade and work with Republicans on legislation that will actually help American job creators – legislation like the Forgotten 15 or the four bills the House will pass this week designed to help small businesses raise money to expand and hire more workers.”

 It should be noted that Bob McDonnell, the Republican governor of Virginia, is looking forward to the new historical site as “a great opportunity to grow our tourism industry while sharing our history.”  It doesn’t sound like it will be the most cheerful tourist attraction Virginia has to offer:

The fort and the land it occupies are historically significant because it was where Dutch traders first brought enslaved Africans in 1619. It remained in Union possession during the Civil War and became a place where escaped slaves could find refuge. It’s also where Confederate President Jefferson Davis was once imprisoned following the Civil War.

 This is a very small microcosm of a larger problem afflicting the whole concept of employment driven by government “stimulus.”  Obamanomics is founded on the notion that virtually all government spending is some sort of job-creating stimulus, in a manner superior to private-sector initiatives.  Every action the government takes, from “infrastructure” spending to designating a historical site, supposedly opens a cornucopia of jobs.

The slightest contemplation of our long years of high unemployment, coupled with astronomical levels of government spending, should expose the absurdity of this idea.  In fact, the opposite is true: government spending is less productive for job creation than leaving money in the hands of those who earned it.  Besides the value lost during the process of separating money from its rightful owners, there is the matter of what people are hired to do.

Healthy private sector job creation is a response to opportunity, and the jobs sustain themselves through the value created.  The employees generate value to their employer well beyond what they are paid.  When the government tries to create jobs with “stimulus” spending, it tends to produce a lot of jobs that disintegrate after the stimulus is removed.  The greater the level of stimulus involved, the more pronounced this effect is.

That’s why unemployment can’t be “fixed” by instructing the government to hire a million people to dig holes, and another million people to fill them in.  It’s why throwing huge piles of money at vaguely defined “infrastructure” projects might briefly employ some people, but it won’t “create jobs.”  And it’s why Obama can’t reduce unemployment by designating a bunch of historic sites across the land, and producing a few thousand jobs apiece. 

Hopefully Fort Monroe will work out as well for Virginia as Governor McDonnell hopes, but the demand for tourist attractions is not bottomless, and it cannot be conjured into existence by fiat.