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Dizzy with Failure

September 7, 2010

“I am not an economist.”, Secretary of Labor Mme Solis is telling us. She goes on: “I believe that numbers only tell you part of the story.”, and then makes the argument that if you’re unemployed, all you need to do is learn a different trade (ideally one that has to do with renewable energy) and you’ll get a job.

Frankly, if I were the labour secretary and knew zilch about economics, I wouldn’t advertise it. Instead, I’d try to learn as much about it as I possibly could because it seems to me that having an understanding of economics is essential to be effective in such an important position. But Solis seems to think this fact about her competence (or lack thereof) is endearing her to the people who are affected by her professional decisions. If the labour market was looking rosy these days, that might work. But as things stand, I doubt that it’s a smart tactic.

And what about that second sentence, “I believe that numbers only tell you part of the story.”? Honestly, this coming from a member of the “science-at-its-rightful-place” administration is surprising. Aren’t we all about numbers now? 3 trillion embryonic stem cells saved or created, 2 million solar panels not shipped overseas, countless college graduations financed for dead people in a non-existing district in Ohio.

Really, the sentence smells of desperation. Job numbers are so bad that Solis can’t even defend them, but has to resort to claiming that they’re not relevant. Actually, she’s going further than that and doesn’t say that statistics are irrelevant, but simply false.

But beyond that, the sentence is offensive to at least two groups of people. One, it’s offensive to economists. It suggests that if you’re an economist, you’re a narrow-minded number-cruncher who can’t see reality due to a vocational disease that makes you care only for misleading numbers while missing the facts on the ground. Well, admittedly, this notion isn’t entirely faulty. And yet, when we’re talking about unemployment numbers, there’s very little to misinterpret. If anything, then current unemployment numbers are hiding even worse facts, as the statistics don’t include those who have given up looking for jobs because of the bad market situation and those who are working unsatisfactory jobs with respect to their abilities. Also, current long-term unemployment is much too common for comfort and atypical for the US job market.

The second group that Solis is offending with this sentence is simply all Americans, especially those who are unemployed or struggling with their job situation because of the recession. After the “numbers are only part of the story” line, Solis suggests that the jobless themselves are to be blamed for their situation. It’s not “the economy”, the business-hostile style of the Obama administration, the catastrophic accumulation of public debt, the disastrous ARRA, the cost and uncertainty created by ObamaCare, or any of those things. It’s the jobless’ fault if they’re not employed. (Ed Morrissey also reads this bold-letter message between Solis’ lines.)

According to Mme Solis, all the unemployed need to do is switch careers. You’re a plumber? Learn how to install solar panels instead. You’re an auto worker? Learn how to draw blood and become a medical assistant. And so on.

Sure, if you’re flexible in your career choice you’re more likely to find a job. What Solis is ignoring, though, is the risk you take in changing careers. It’s a pre-investment of money and time into a new job you obviously cannot be sure to get. And one inconspicuous looking sentence in Solis’ piece deserves closer attention in this context:

We [in this administration] are ensuring industries that we know are growing have workers prepared through high-quality training programs that we know are working.

Really? If the Obama administration knows which industries are growing and will continue to grow so that people entering training programmes today will be able to join those industries after their training is over, then what do we need markets for anyway? All we need is the administration to determine the number of people to enter specific training programmes at a specific point in time and to start working a specific job in a specific industry for a specific period.

Of course, financing would be determined in a similar manner. No more investment risks, there’ll be fixed rates of return.

Solis’ claim that the administration knows which industries will provide which number of jobs and which won’t, is part of what Austrian economist Friedrich von Hayek has called the pretence of knowledge. (Ironically, Hayek also contended that numbers don’t necessarily tell the whole story.)

Solis — and all the rest of the Obama administration — could learn a (fundamental, transformative) thing or two from Monsieur Hayek. Maybe Obama can find room for this quote on his Oval Office carpet:

If man is not to do more harm than good in his efforts to improve the social order, he will have to learn that in this, as in all other fields where essential complexity of an organized kind prevails, he cannot acquire the full knowledge which would make mastery of the events possible. He will therefore have to use what knowledge he can achieve, not to shape the results as the craftsman shapes his handiwork, but rather to cultivate a growth by providing the appropriate environment, in the manner in which the gardener does this for his plants. There is danger in the exuberant feeling of ever growing power which the advance of the physical sciences has engendered and which tempts man to try, “dizzy with success”, to use a characteristic phrase of early communism, to subject not only our natural but also our human environment to the control of a human will. The recognition of the insuperable limits to his knowledge ought indeed to teach the student of society a lesson of humility which should guard him against becoming an accomplice in men’s fatal striving to control society – a striving which makes him not only a tyrant over his fellows, but which may well make him the destroyer of a civilization which no brain has designed but which has grown from the free efforts of millions of individuals.

3 Comments leave one →
  1. September 10, 2010 09:13

    “Learn a different trade?” Remember all the talk about shovel ready jobs? I’ve seen many site development companies go out of business and they are on the front lines of building infastructure. Small companies fortunate enough to still be operating are really struggling, not expanding and keeping as small a payroll as possible. Construction workers are suffering. The “Stimulous” stimulated nothing but debt.

    • frenchcowboy permalink*
      September 10, 2010 09:32

      It’s also interesting to note that plumbing and auto repair are not jobs that can be “shippped overseas”. Such services are less in demand because American households are living through an economic low tide, not because of “evil” companies using tax-minimising opportunities.

      Medical services and green energy jobs, on the other hand, are financed to a large degree by public money. If those sectors are offering jobs they’re not backed (directly) by private demand, but by the government’s structural policies.

      What Solis (and all the rest of the Obama administration) are advocating — or rather cultivating — is a shift of workforce from the private sector into the public (or at least tax-financed) sector. But that’s not news, of course.

  2. September 10, 2010 11:57

    That’s my observation too–all of this malarky is meant to grow the government, not to sur private growth–Many of the construction projects funded with stimulous money are government sites where the jobs “created” are for inspectors and paper-pushers who handle the paperwork for the bureaucratic red tape. This doesn’t benefit the small business construction company and ends up actually costing the business big time! Example: 13 gov’t people with clip boards watching 1 excavator operator, making notes about emmissions from the equipment, soil quality and safety. Result: A job that should take 8 months to complete ends up taking 14 months and the construction company on that job is lucky if it’s still in business.
    We can’t let this happen in the medical industry. We need to campaign, vote, defund and repeal and roll things back ASAP!

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