Bill Bonner

Hey ho…what goes?

The stock market registered a gain of 53 points on the Dow yesterday. Gold saw a modest gain too.

And the White House came right out and with a straight face said it had saved 2 million jobs. How do you like that? More than 7 million jobs have disappeared in the correction so far. But the total would have been more than 9 million, had it not been for the feds.

Let’s see, $700 billion worth of stimulus spending…hey, that’s $350,000 per job. But every dollar of deficit is actually ‘stimulus spending.’ At that rate, each job cost about $800,000. And what about all the Fed’s pump priming? What about all the loan guarantees and toxic asset purchases…and bailouts of the auto industry, AIG, the banks, mortgage holders, Fannie and Freddie…etc. etc? That’s all stimulating too, isn’t it? The total is said to be around $13 trillion, putting the cost at $65 million for each job saved.

Of course, it’s all hooey…all nonsense…all balderdash.

It makes sense to ‘save’ a job if and only if the job didn’t need saving. In other words, the jobs that are worth doing are worth saving…but they don’t need saving. Why? Because a job that is worth doing is a job people will pay for. And if they won’t…or can’t…it’s NOT worth doing.

Otherwise, the feds could have 100% employment…just as they did in the Soviet Union. Give everybody a job. What the heck, give everybody two jobs! But it only really does any good if the jobs are productive. And how can you know if they’re productive or not? You have to wait for Mr. Market to tell you. If a job is productive, people will pay for it. If not, well…the job is cut and/or the business goes bust.

Mr. Market never gets a say on government jobs, however. That’s why the feds can say any fool thing they want.

Washington, DC is full of government bureaucrats who earn 30% to 50% more than people in the private sector. In the private sector Mr. Market puts his thumb up or his thumb down. The job is saved. Or the job is cut. But here in the federal city his thumbs are in his pockets.

For example, every day, we drive by the NIH – National Institute of Health. Thousands of cars go in and out every day. The NIH was set up in 1930. It had 140 employees, which seems like more than enough. Today, it has 18,442. The same sort of employee inflation happens at every government level on practically every government project. You set up an agency or a commission. Then, you can’t get rid of it. As the saying goes, ‘nothing is more eternal than a temporary government agency.’

But are Americans any healthier thanks to the NIH’s 18,000 + employees? No one knows.

And that’s just the NIH…where employees might conceivably be doing something worthwhile. Just for fun we went to the A-Z Index of US Government Departments and Agencies and copied some of the list. This is just the beginning of the As:

  • Administration for Children and Families (ACF)
  • Administration for Native Americans
  • Administration on Aging (AoA)
  • Administration on Developmental Disabilities
  • Administrative Committee of the Federal Register
  • Administrative Office of the US Courts
  • Advisory Council on Historic Preservation
  • African Development Foundation
  • Agency for Healthcare Research and Quality (AHRQ)
  • Agency for International Development
  • Agency for Toxic Substances and Disease Registry
  • Agricultural Marketing Service
  • Agricultural Research Service
  • Agriculture Department (USDA)
  • Air Force
  • Alabama Home Page
  • Alabama State, County, and City Websites
  • Alaska Home Page
  • Alaska State, County, and City Websites
  • Alcohol, Tobacco, Firearms, and Explosives Bureau (Justice)
  • Alcohol and Tobacco Tax and Trade Bureau (Treasury)
  • American Battle Monuments Commission
  • American Samoa Home Page
  • AMTRAK (National Railroad Passenger Corporation)
  • Animal and Plant Health Inspection Service
  • Appalachian Regional Commission
  • Architect of the Capitol
  • Architectural and Transportation Barriers Compliance Board (Access Board)
  • Archives (National Archives and Records Administration)
  • Arctic Research Commission
  • Arthritis and Musculoskeletal Interagency Coordinating Committee
  • Atlantic Fleet Forces Command

Would we be worse off if half of these people were sent home? Probably not.

But what are we ranting about? The Daily Reckoning is about money, right? It’s not about politics…

But…whoa…now politics and economics are mighty cozy with one another. A growing part of GDP comes directly from the federal government. Already, there is now more government spending than there is private investment.

And many mainstream economists are calling on the government to spend more money to fight the downturn…and ‘save jobs.’ They don’t bother to think about whether the jobs are worth saving or not. And they don’t seem to care that government spending is not the same as private spending. As the feds take over, the economy changes shape. It becomes less and less a free-market, productive, wealth enhancing economy. Instead, it becomes more and more of a centrally-planned, unproductive, wealth destroying one.

It becomes Sovietized, in other words…like Venezuela.

Bill Bonner

Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America's most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind The Daily ReckoningDice Have No Memory: Big Bets & Bad Economics from Paris to the Pampas, the newest book from Bill Bonner, is the definitive compendium of Bill's daily reckonings from more than a decade: 1999-2010. 

  • trent

    The economists are just trying to save their own jobs bill, because they’ve been proven so horribly wrong over the past 30 years. Also is harry a real person?

  • John

    No, Harry is a figment of his own imagination!

  • CommonCents

    Largest voting block, AARP, Unions or general population?

    No, it’s the government itself. A now self-perpetuating cancer on what once was a healthy economic patient. Usually someone says here, we’re freaking doomed!

  • Fedest

    I suspect Harry works either for the Fed or the government… trying to discourage people to know the truth!

  • JMR_in_absentia

    Harry is the result of some very cruel scientists who captured stray dogs and spliced some of their DNA with ground cinder blocks. This explains his density as well as his affinity for the hands that feed him.

  • Frank

    Great article. It clears up the muddy fog the politicians call ‘government’. Soon the majority of voters will be government employees. Then the only winning vote will be for ‘leaders’ that will feed them more favors and any remaining almost worthless dollars they can suck out of the US citizens that still have a real job.

  • Frank

    How about a few thousand more government employees to administer the new government run health care plan….

  • Harry

    Strong Earnings Growth Unlikely, say Bill Bonner.

    I said I would post this after all the big earnings come out. Guess what? INTC crushed earnings top and bottom lines. And has a great forecast going forward.

    So far BB, you’re way wrong once again.

  • KidHorn

    I’m not going to argue whether most government jobs are needed or not, but if you think the private sector doesn’t have a lot of unnecessary jobs, you’re dreaming.

    I’ve worked for both the federal gov’t and private sector and while the gov’t has more dead weight, there are a lot of useless employees on private payrolls also. If you have an incompetent manager, regardless of where you work, you can get away with pretty much anything.

  • Paul

    Small typo (which is easy to overlook because the numbers are so big): it’s 6.5 Million per job not 65.

Recent Articles

Addison Wiggin
3 Ways to Identify Your Own Private American Oasis

Addison Wiggin

No matter where you live in the US, it seems like some federal employee has his hand on your wallet. That said, not all states are created equal in that regard. And so today, Addison Wiggin details which states offer you the least intrusive options when it comes to dealing with the various levels of government. Read on...


The One Number Every Penny Stock Investor Overlooks

Jonas Elmerraji

When it comes to investing in small companies with explosive growth potential, there is one number investors tend to be fixated on: share price. But as Jonas Elmerraji explains, there is another number that is far more important when it comes to discovering quality investments on the cheap. Read on...


Winners and Losers in the Battle of Economic Stupidity

Douglas French

A lot of people are buying to a lot of bad ideas right now, based on faulty logic or blindly following a political agenda. But if you ask the right questions, you can expose these ideas, as well as the people who support them, and show how silly (and stupid) they really are. Thankfully, one man has been doing just that for decades. Doug French explains...


Smart Investments in the Mobile Revolution

Greg Guenthner

The world is obsessed with smartphones. Most people can't go ten minutes without checking their phone for status updates on Facebook or Twitter or any number of apps they happen to have. And while Facebook's stock continues to soar, it's only natural to wonder, "What's the best way to play this mobile revolution?" Greg Guenthner explains...


The US Debt Crisis that Will Never Happen

Chris Mayer

One of the most heated political battles raging across the western world is debt versus austerity. In the U.S. this debate reached it's apex in 2011 when the U.S. credit rating was downgraded by Standard and Poor's. In today's essay, however, Chris Mayer throws the debate out the window, explaining why he thinks a U.S. debt crisis will never happen...