Juno News - August 18, 2022


Trudeau's 'build back better' agenda creates fewer jobs


Episode Stats

Length

5 minutes

Words per Minute

183.52736

Word Count

1,051

Sentence Count

65


Summary


Transcript

00:00:00.000 In the era of Build Back Better in the post-COVID recovery,
00:00:03.380 we've heard a lot from politicians who are really sanguine about their ability to
00:00:07.060 create jobs. Take a listen. Create more jobs. Creating more steady, well-paying jobs. Creating
00:00:13.100 good jobs. 380,000 jobs. Creating good middle-class jobs. We need a million jobs to fill.
00:00:20.120 Our plan will create jobs. Create great, well-paying, local jobs. And create tens of
00:00:28.020 thousands of jobs. To invest in the jobs of the future. Our top priority is getting as many
00:00:34.180 people back to work in good jobs. And to create jobs. We just heard from a variety of Canadian
00:00:39.680 politicians from across the political spectrum, all saying that their government was able to
00:00:44.460 create jobs by spending your money. This is Keynesian economic theory that if the government
00:00:49.580 spends money during recessions or during down economic times, they can stimulate the economy
00:00:54.860 by quote-unquote creating jobs. Now they claim to create jobs in two different ways. One
00:00:59.920 is through creating jobs directly. That's if they create a thousand jobs by hiring a thousand
00:01:04.880 teachers, for example. They also claim to create jobs indirectly. That's through infrastructure
00:01:09.920 spending. These aren't direct employees, but it could create construction jobs, for example.
00:01:15.820 So while politicians will claim that they're creating jobs either directly or indirectly,
00:01:20.100 your argument is that on net there's actually job losses. The key here is to really look at
00:01:26.680 opportunity costs. So if they've taken all of that money out of the economy, they've spent that money
00:01:32.220 to quote-unquote create their jobs. How many jobs were lost because of the money that they've removed
00:01:37.360 from the economy? The government can only get money in three main ways. Taxation, by printing it,
00:01:41.980 or by borrowing it. And all of these three things create unemployment. Consider taxation, either a personal
00:01:47.440 income tax or corporate income tax. Both of those things remove disposable income out of the pockets
00:01:52.760 of either individuals or businesses. In the case of individuals, that means that they now have less
00:01:58.120 money in their pocket to stimulate the economy on their own, to buy goods and services that would
00:02:03.440 create jobs. When you look at corporations, for example, they're not just going to take a hit that
00:02:09.060 increased taxation would give them. So they're either going to raise the cost of their goods,
00:02:13.140 decrease or stagnate wages, or even eliminate jobs. And all of those things would decrease
00:02:18.480 employment. Yet politicians of all political stripes are still addicted to the ribbon-cutting
00:02:23.580 announcement that they've created jobs or they've made investments. Because at first, the results are
00:02:29.260 highly visible. If you've given a thousand people money to work, then everybody can see that you've
00:02:34.800 quote-unquote created a thousand jobs. But because the negative side effects of that are so widely
00:02:40.380 dispersed across the economy, it's far more difficult to point out the opportunity costs.
00:02:44.980 The reason why the government will always destroy more jobs than it creates by taking money out of
00:02:49.320 the economy is because of this simple principle. Nobody spends somebody else's money as carefully as
00:02:55.200 he spends his own. Because you've worked hard for your money, you want to spend it as wisely as
00:02:59.440 possible and make sure you get the best return on your investment. But the politicians and bureaucrats
00:03:03.700 spending your hard-earned tax dollars have different incentives. Perhaps re-election, so they want
00:03:08.840 short-term positive news stories like ribbon cutting and quote-unquote job creation. Or in
00:03:14.240 the bureaucrats example, perhaps they just don't want their budget slashed next year, so they're
00:03:18.160 incentivized to spend through the entire thing. So while politicians may claim to be investing,
00:03:23.440 and you'll hear that word so often, economist Ricardo Caballero said that investing means trading
00:03:28.860 the present for the future. But politicians often take the exact opposite approach when it comes to
00:03:34.520 quote-unquote investing. You'll always hear politicians say that they're making investments
00:03:38.700 for the future, but really what they're doing is short-term spending that's beneficial now,
00:03:44.080 and that actually will be quite costly and not the best decision for taxpayers in the future.
00:03:48.740 As famed economist Thomas Sowell says,
00:03:51.380 it's hard to imagine a more stupid or a more dangerous way of making decisions than by putting
00:03:56.280 those decisions in the hands of people who pay no price for being wrong. This rings especially true for
00:04:01.900 the politicians that we seem to have in Ottawa today, and it's hardly surprising that they make
00:04:06.320 so many errors when it comes to quote-unquote job creation in our economy when you look at their
00:04:12.000 background. So let's take a quick look. Let's start with Justin Trudeau, Canada's current prime
00:04:16.280 minister. Take a listen to this clip of him from 2014. It was the year before he was elected prime
00:04:21.460 minister in Canada. So in this economic climate, how committed to a balanced budget would you be right
00:04:28.320 now? Would it worry you to go into deficit in this current climate to, as you say, put more people
00:04:33.040 to work? The commitment needs to be a commitment to grow the economy, and the budget will balance
00:04:38.760 itself. He honestly believes that government spending is the path to prosperity. That's
00:04:43.000 terrifying. But when you look at his background, it's hardly surprising that he's so ill-informed
00:04:48.080 about economics. He didn't have any formal training in economics. In fact, he didn't have any real
00:04:52.660 business experience at all. He was a teacher for a few years before getting into politics.
00:04:57.740 Next up, if you look at federal finance minister and deputy prime minister, Chrystia Freeland,
00:05:02.800 while her resume is very impressive as a journalist, she too lacks the business credentials that she could
00:05:08.780 draw on to justify these grandiose claims she makes about her ability to create jobs in Canada.
00:05:15.240 True North actually did some great reporting on this and found that more than half of Trudeau's
00:05:19.700 cabinet have zero business experience. That said, Canada is a democracy. And while we don't vote for
00:05:25.180 the specific roles of who gets to fill prime minister or the rest of cabinet, Canadians did
00:05:29.600 elect a liberal government led by Justin Trudeau, who clearly lacks very fundamental economics and
00:05:36.400 business training or experience. And that shows when it comes to his abysmal track record on his
00:05:41.500 promises to quote unquote, create jobs.