Progressive’s job creation: $1,400,000 cost for each job created; a known failure anticipated since 1848

Really ! ? !

Once you read the findings of the Brookings Institute’s study on “cash for clunkers”, you might think, “lesson learned”, The Federal Government won’t do that again.  However, read further down and you will see where I linked Frederic Bastiat’s classical explanation which he penned in 1848.

1848

“Cash for clunkers” implemented by the modern Progressives in 2009 is nothing new.  The outcome was known by any honest person who is relatively “learned”.  Especially so for any trained or schooled economist.

After you read Bastiat’s explanation, ask yourself, “Can the Progressives really be this ignorant?” or, are they educated and the Progressives realized the effects upon “that which is not seen”?

The Brookings Institute published a study evaluating “cash for clunkers” on October 31, 2013.  Kevin Robillard writes and Politico’s reports;

As a job creator, the Obama administration’s Cash for Clunkers program was a sputtering old jalopy that deserves to stay in the scrap yard, according to a study released Wednesday.

The program, which fueled a car-buying spree in the summer of 2009, cost $1.4 million for every job it created and did little to reduce carbon emissions, a Brookings Institution report said. In comparison, research has found one job is created for every additional $95,000 spent on unemployment benefits.

“In the event of a future economic recession, we would not recommend repeating the CARS program,” Brookings researchers Ted Gayer and Emily Parker wrote, using the acronym for the Car Allowance Rebate System.

In 1848, French economist Frederic Bastiat penned his “window panes” example and explained how destructive such a program is to everyone except the window pane manufacturer.  Bastiat’s “parable of the window panes” as related by the Mises Institute here:

Have you ever witnessed the anger of the good shopkeeper, James B., when his careless son happened to break a square of glass? If you have been present at such a scene, you will most assuredly bear witness to the fact, that every one of the spectators, were there even thirty of them, by common consent apparently, offered the unfortunate owner this invariable consolation: “It is an ill wind that blows nobody good. Everybody must live, and what would become of the glaziers if panes of glass were never broken?”

Now, this form of condolence contains an entire theory, which it will be well to show up in this simple case, seeing that it is precisely the same as that which, unhappily, regulates the greater part of our economical institutions.

Suppose it cost six francs to repair the damage, and you say that the accident brings six francs to the glazier’s trade — that it encourages that trade to the amount of six francs — I grant it; I have not a word to say against it; you reason justly. The glazier comes, performs his task, receives his six francs, rubs his hands, and, in his heart, blesses the careless child. All this is that which is seen.

But if, on the other hand, you come to the conclusion, as is too often the case, that it is a good thing to break windows, that it causes money to circulate, and that the encouragement of industry in general will be the result of it, you will oblige me to call out, “Stop there! Your theory is confined to that which is seen; it takes no account of that which is not seen.”

It is not seen that as our shopkeeper has spent six francs upon one thing, he cannot spend them upon another. It is not seen that if he had not had a window to replace, he would, perhaps, have replaced his old shoes, or added another book to his library. In short, he would have employed his six francs in some way which this accident has prevented.

Let us take a view of industry in general, as affected by this circumstance. The window being broken, the glazier’s trade is encouraged to the amount of six francs: this is that which is seen.

If the window had not been broken, the shoemaker’s trade (or some other) would have been encouraged to the amount of six francs: this is that which is not seen.

And if that which is not seen is taken into consideration, because it is a negative fact, as well as that which is seen, because it is a positive fact, it will be understood that neither industry in general, nor the sum total of national labor, is affected, whether windows are broken or not.

Now let us consider James B. himself. In the former supposition, that of the window being broken, he spends six francs, and has neither more nor less than he had before, the enjoyment of a window.

In the second, where we suppose the window not to have been broken, he would have spent six francs in shoes, and would have had at the same time the enjoyment of a pair of shoes and of a window. Now, as James B. forms a part of society, must come to the conclusion, that, taking it altogether, and making an estimate of its enjoyments and its labors, it has lost the value of the broken window.

Whence we arrive at this unexpected conclusion: “Society loses the value of things which are uselessly destroyed,” and we must assent to a maxim which will make the hair of protectionists stand on end — to break, to spoil, to waste, is not to encourage national labor; or, more briefly, “destruction is not profit.”

What will you say, Moniteur Industriel? What will you say, disciples of good M. F. Chamans, who has calculated with so much precision how much trade would gain by the burning of Paris, from the number of houses it would be necessary to rebuild?

I am sorry to disturb these ingenious calculations, as far as their spirit has been introduced into our legislation; but I beg him to begin them again, by taking into the account that which is not seen, and placing it alongside of that which is seen.

Bastiat, Frederic

The reader must take care to remember that there are not two persons only, but three concerned in the little scene which I have submitted to his attention.

One of them, James B., represents the consumer, reduced, by an act of destruction, to one enjoyment instead of two.

Another, under the title of the glazier, shows us the producer, whose trade is encouraged by the accident.

The third is the shoemaker (or some other tradesman), whose labor suffers proportionately by the same cause.

It is this third person who is always kept in the shade, and who, personating that which is not seen, is a necessary element of the problem. It is he who shows us how absurd it is to think we see a profit in an act of destruction. It is he who will soon teach us that it is not less absurd to see a profit in a restriction, which is, after all, nothing else than a partial destruction. Therefore, if you will only go to the root of all the arguments which are adduced in its favor, all you will find will be the paraphrase of this vulgar saying — what would become of the glaziers, if nobody ever broke windows?

 

Dear reader,

Again I ask you to ponder:

Are the progressives who enacted “cash for clunkers” really this ignorant?  Or are progressives actually “learned” and understand the consequences upon “that which is not seen”?  

I propose the Progressives understand, not only, the costs would far outweigh the benefits, but the Progressives’ actions would actually punish “that which is not seen” at the same time.  

Today, “that which is not seen” is the US taxpayer.  Is it possible the Progressives are learned and they realized they would punish the US taxpayer, just as they punished the US taxpayer during last fall’s “government shutdown” by withholding cancer treatments for children?

I urge you to consider honestly.

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2 thoughts on “Progressive’s job creation: $1,400,000 cost for each job created; a known failure anticipated since 1848

  1. Pingback: 2nd Amendment creates jobs and saves lives | The Rio Norte Line

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