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 in numerous industries. His unique writing style, philanthropic undertakings and preservationist activities have been recognized by some of America's most respected authorities. With his friend and colleague Addison Wiggin, he co-founded The Daily Reckoning in 1999, and together they co-wrote the New York Times best-selling books Financial Reckoning Day and Empire of Debt. His other works include Mobs, Messiahs and Markets (with Lila Rajiva), Dice Have No Memory, and most recently, Hormegeddon: How Too Much of a Good Thing Leads to Disaster. His most recent project is The Bill Bonner Letter.

  • 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
Profit from Global Warming, Even if You Don’t Believe In It

Addison Wiggin

Global warming is one of the most debated subjects of the last few years. But regardless of whether you're a "true believer" or a merely an unconvinced skeptic, there are significant ways to make serious money from this controversial topic. Today, Addison Wiggin brings you three of them. Read on...


Mogambo Guru
How to Buy Your Own “Bread and Circuses”

Richard Daughty

The U.S. is in debt up to its eyeballs - both in the public and private sectors. And more than anything, this has to do with a "borrow and spend" mentality of which no one is willing to rid themselves. Luckily The Mogambo Guru is willing to point out these flaws... and offers an actionable way out of them. Read on...


How to Double Your Money in 5 Hours

Wayne Mulligan

Everyone loves to believe that stocks soar on IPO days. But statistically speaking, that's simply not the case. In fact, over the last decade the average first-day returns for IPOs was just 12.2%. Today, Wayne Mulligan shows you a way around that - and how to make twice as much as everyone else who's scrambling to get a piece of the IPO. Read on...


The Ancient Secret to Thriving in Any Environment

Chris Campbell

The world is full of self-help books and empowerment guides. But one ancient text beats them all. In fact, some early adopters call it "the definitive text on self-discipline, personal ethics, humility, self-actualization and strength." And according to Chris Campbell, it could be the only thing you need to thrive in today's chaotic world. Read on...


How Wall Street Strategists are Trading the Current Market

Greg Guenthner

Amid all of the excitement over the Alibaba IPO and the launch of the iPhone 6, stocks hit new all-time highs on Friday. But stock prices don't tell the full story... Today, Greg Guenthner deciphers the current market trend and gives insight into whether or not these record highs portend another market crash. Read on...