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Beltway Economic Nonsense

by

Leave it to 495ExpressLanes.com to bring a bit of humor and misguided economic analysis to the Washington, D.C., environs in the form of an advertisement in the Washington Post. The ad promotes the new beltway express lanes that are set to open this month and states that the project:

  • Supported more than 16,000 jobs in Virginia
  • Contributed nearly $3.5 billion of economic impact to Virginia and the region
  • Awarded more than $490 million in contracts to small and disadvantaged businesses
  • Employed more than 250 contractors – more than 75 percent based in Virginia.What the advertisement failed to point out, however, is that the project also:
  • Destroyed more than 16,000 jobs in Virginia and around the country
  • Cost nearly $3.5 billion of economic impact to Virginia and the rest of the country
  • Cost $490 million in revenue to small and disadvantaged businesses
  • Cost employment for hundreds of people around the country.Public officials, of course, love big public-works projects precisely because they’re able to point to them and proclaim, “Look at what we have done for your community, region, or state. With our grandiose project, we have brought jobs and prosperity to your area. Praise us!”

    Left out of the calculation, however, is where they got the money to build the project. That’s the part they don’t want people to focus their attention on.

    Where does the money come from for these projects? It’s seized from people in the private sector through taxation.

    Now, ask yourself: What would all those people have done with all that money if it hadn’t been confiscated from them?

    Answer: They would have spent it, or invested it, or donated it. In the process, they would have been creating jobs and “economic impact” in the sectors of the economy that they would have been putting their money into.

    So, when public officials say their project created 16,000 jobs, they also destroyed the thousands of jobs that never were allowed to come into existence owing to the fact that people had their money confiscated from them to pay for the big public-works project.

    Thus, government cannot and does not create jobs and prosperity. It simply reorients jobs and prosperity from the sectors on which people would have spent or invested or donated their money to the sectors that the government is spending the money.

    That’s what the 19th-century French free-market legislator Frederic Bastiat referred to as the seen vs. the unseen. What is seen is the grandiose public-works project—the road, the dam, or the public school. Public officials point to these things, puff out their chests, and say, “See what we have done for you!”

    What is unseen, however, is the horrific economic damage that comes about by virtue of the people not being free to dispose of the money that was taken from them to pay for the grandiose public-works project.

    There’s another amusing twist to this story. On the same day the 495 Express Lanes advertisement came out, the Post published an article from Reuters entitled “Ecuador’s Correa Begins Reelection Bid as Favorite.”

    Now, keep in mind that Correa is one of the U.S. government’s Latin American nemeses. He is part of the Hugo Chavez, Daniel Ortega, Fidel Castro leftist clique. U.S. officials hate the guy. Not only did Correa boot the U.S. military out of Ecuador, where it had one of its worldwide imperial bases, he also is the guy that has given asylum to Julian Assange, the man U.S. officials consider to be a sworn enemy of the U.S. Empire. In fact, if the U.S. Empire weren’t bogged down with its war on terrorism and its 11-year occupation of Afghanistan, it is likely that Correa would be finding himself as the target of one of the Empire’s vaunted national-security regime-change operations in Latin America.

    You’re going to get a real kick out of the following sentence from the article: “Government spending on roads, hospitals and schools has made the 49-year-old U.S.-educated economist very popular with the impoverished majority….”

    Is that funny or what?

    First, notice that he’s a “U.S.-educated economist.” That’s why he thinks the same as your standard American economist, politician, and mainstream newspaper pundit.

    Second, notice how that U.S. education manifests itself — by having the government spend money on road, hospitals and schools — i.e., the favorite public-works projects of American statists! Why, I’ll bet Correa is saying the same thing to the Ecuadorian people that U.S. officials are telling the people of Virginia about that 495 beltway project. I’ll bet he’s telling them about all the jobs and prosperity that he’s bringing to Ecuador with his grandiose public-works projects.

    That’s not all. Consider the lead paragraph of the article: “Ecuador’s President Rafael Correa launched his reelection bid Saturday for a February vote that is likely to give him a new four-year term to continuing boosting state control over the Andean nation’s economy.”

    Boosting state control over the economy? Where have we heard that one? Why, we just heard it thousands of times from our very own presidential candidates, Barack Obama and Mitt Romney, along with their supporters and the mainstream media. Weren’t they running against each other based on which one of them would be a better manager of the economy? Didn’t they both have detailed plans to make the nation’s economy work better? Weren’t they both claiming to be a better job-creator-in-chief? Wasn’t that how the mainstream media determined which candidate to endorse?

    The 495 beltway advertisement and the Correa article are helpful, in that they remind Americans how similar the economic philosophy of people like Fidel Castro, Hugo Chavez, Daniel Ortega, and Rafael Correa is to that of Democrats and Republicans. After all, these socialist rulers believe in Social Security, Medicare, Medicaid, subsidies, bailouts, welfare, public schooling, and, of course, grandiose public-works projects as much as American liberals and conservatives do.

    The differences come in over foreign policy. Those particular rulers have failed to be submissive and accepting of the U.S. Empire’s worldwide military empire and its war on terrorism, torture, assassinations, indefinite detentions, support of dictatorships, and other policies that, ironically, are consistent with how things are done in totalitarian, communist regimes.

 

This post was written by:

Jacob G. Hornberger is founder and president of The Future of Freedom Foundation. He was born and raised in Laredo, Texas, and received his B.A. in economics from Virginia Military Institute and his law degree from the University of Texas. He was a trial attorney for twelve years in Texas. He also was an adjunct professor at the University of Dallas, where he taught law and economics. In 1987, Mr. Hornberger left the practice of law to become director of programs at the Foundation for Economic Education. He has advanced freedom and free markets on talk-radio stations all across the country as well as on Fox News’ Neil Cavuto and Greta van Susteren shows and he appeared as a regular commentator on Judge Andrew Napolitano’s show Freedom Watch. View these interviews at LewRockwell.com and from Full Context. Send him email.