Thanks for a splendid demonstration of the empty-headedness of the Keynesians, Roy!
Clueless people like Baker can only see statistics on employment. If the government creates a job for someone who has become unemployed, that’s good because he then has, as the Keynesians like to say, “effective demand.” If the government does enough of that, the unemployment rate goes back down and supposedly we have regained prosperity. What could be simpler?
A real economist would see what’s actually going on: the government is taking wealth away from people who are doing productive things and giving it to people who are doing things that are not productive.
The objective should not be “full employment” but rather to get the maximum output for our resources. The Soviet Union had full employment, but used its resources very wastefully because it substituted governmental direction for market competition.
The debate we should be having is whether you get better resource allocation through markets or through politics. I’d like to hear what the interventionists would say.
