Where Were the Jobs?

CASUALTIES OF OVER-REGULATION? asks Glenn Reynolds.

That’s a good starting point for researchers to investigate why the number of projected U.S. jobs were not created over the past decade. Of course, the projections themselves and their assumptions need to be examined.

Meanwhile, Deroy Murdock comments on the lower ranking of the U.S. in 2011 Index of Economic Freedom. Another possible source.

The main question in my mind is what causes wealth creation, increased revenues, and increased profits.  Resources must be utilized to create wealth, and humans are resources that occupy jobs when they are employed by a firm, be it small, medium, or large.

My own view is take on regulation is that it diverts resources away from creating wealth and toward compliance with political dictates.  For example, credit card companies have to comply with new regulations.  These firms must use their resources to comply and that means managers, business analysts, computer software developers, testers, and other human beings employed by the firm all have to modify existing programs, computers, PCs, large-scale computer servers, and networks.  All this activity creates a lot of work for the people who have to make the changes, but that does not mean it results in new revenues and profits for the firm.  Its sort of like the Keynesian argument for paying people to dig ditches and filling them in again; there is economic activity which shows up as increased jobs and GDP but the dug out and filled in ditches did not result in anything useful for anybody.

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