Debugging Treasury Propaganda Part 2 of 13

Today your faithful correspondent continues his unflinching analysis of the very interesting propaganda released by the U.S. Treasury Department, “The U.S. Economy in Charts”. Although I am a dirty heathen libtard soshulist anchor baby, I don’t accept communiqués from the government of Our Lord and Savior (Barry Obama) without at least some skepticism.

So, join me as I unpack the unstated assumptions, questionable data, and leaps of logic underlying this presentation from ObaMao’s Ministry of Truth. It’ll be a good mental warmup for this afternoon’s festivities, wherein Magic Sam will analyze the fake controversy from last night’s Fox Noise non-event in which a young Bammerz was caught on video saying nice things about a #scaryblackman, Derrick Bell, who despite being a highly regarded constitutional scholar and the first tenured black law professor at Harvard was really just a terrorist, because Jeremiah Wright.

And now back to our lesson in Economic Skepticism for Degenerates!

Your faithful correspondent wants to engage you in a thought experiment. This is lovingly ripped off the excellent Tim Harford, economics correspondent for the Financial Times and a gifted explainer of microeconomic principles to non-economists.

In the American Colonies, telephone service is provided by the free market (sort of) and the highway system is (mostly) provided by the government. So if a telephone company is announcing that it is hiring, oh hooray capitalism and liberty and freedom. Many of you would not have the same enthusiastic response if the gubmint road bureaucracy announces it is staffing up.

But there are places around the world where it’s the other way around: telephone service is provided by the government and the national highway system is a private enterprise regulated like other utilities. Policymakers in ‘Merica could decide to privatize the road network and nationalize the phone system; stranger things have happened. Would that then make transportation jobs good and telephone jobs a drag on hard-working taxpayers?

Of course not. What really matters are the incentives at the levels of the individual, the firm, and the bureaucracy to provide services to customers, rate-payers, and taxpayers as the case may be. Although unlikely as a practical matter, it’s entirely possible to have a sustainable economy with no private sector at all if the incentives are right.

With that in mind, the incentives are definitely not right in many major Amerikan industries such as finance, single-family housing, mineral resource extraction, and the military-security-industrial complex. So, it’s not necessarily good news that private sector gross domestic product (GDP) growing and public sector spending is flat.

Furthermore, the distinction between “private sector” and “public sector” is not well defined in any case, making the data presented above arbitrary and the trends inferred from it specious. For example, spending on defense contracting shows up (properly) as public sector spending, but defense contractor jobs are counted as private sector employment. Similarly, government-owned businesses like municipal utilities should properly be counted as private sector and are not.

This slide skirts around the real issues behind the GDP and jobs numbers, namely that GDP growth is well below where it normally is after a deep recession, and that labor force dynamics will make it difficult for entire segments of the adult population to find meaningful employment ever again without the kind of structural reform that is impossible to get through Congress today.


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