Misleading Metrics

Written by Joe Driscoll

February 12, 2010

The media has been clamoring for it, and now the politicians are focusing on it.  Jobs, jobs, jobs.  Yikes, hold onto your wallets.  The gang(s) that can’t shoot straight are off on another hunting expedition.  One thing you can be sure of, they will miss the target again!!!!

The focus on “jobs, jobs, jobs” recalls memories of a similar focus on “body counts” during the Vietnam War.  McNamara and Johnson wanted body count statistics to validate their policies.  They got dubious body counts while they lost strategic focus on real results.   Misleading metrics missed the mark.

Now we have another administration looking towards body count statistics to validate their policies.  And once again, they’ll get the statistics, just not the results; jobs are created in congressional districts that don’t exist while various White House staffers claim wildly differing totals for jobs “retained or created”.  All the while the larger economic malaise continues.  Another case of misleading metrics.

Jobs are important, but all of us who are working jobs in the real economy know that jobs are the result of economic activity, not the end.   Job creation is such an appealing political rally cry (who can be against it), that no one is “telling the emperor(s) that this is a naked policy”.

Former Chairmen of the Federal Reserve Allen Greenspan said it politely when asked about the current Washington preoccupation with the creation of “jobs programs”.

“I think we have to start with the focus of economic activity.  In other words, jobs are created by having something to do, so you can’t put jobs before economic activity.  (Small business) are a big creator of jobs, but they won’t hire anyboday if they don’t have any business.”

So what’s Washington in the process of doing, passing a tax credit for employers that hire new employees.  There aren’t many businesses that are going to hire a new employee to get a tax credit.  New employees are hired when there’s economic activity and work to be done!!!!  Why is that so hard to understand?

At the recent Q & A that the President conducted with Senate Democrats, Arkansas Senator Blanche Lincoln expressed the fears of her constituents:

“They fear there’s no one in your administration that understands what it means to go to work on Monday and make a payroll on Friday.”

This isn’t a partisan issue, it’s an economic literacy issue.  There are only three ways to the create wealth that generates economic activity that results in real job creation; mine it, manufacture it or grow it.  If we want to rejuvenate the US economy and lower unemployment, we’ll never do it by re-distributing wealth or manipulating wealth.  We won’t do it by encouraging increased consumption of wealth.  We must create it. In a land blessed with great natural resources and more freedoms ever known to man, we used to be pretty good at doing that.

If our politicians, of both parties, want improve the economic environment that will lead to real job creation, it’s time to stop political posturing on phony job metrics and begin address real issues that will lead to economic prosperity.  While jobs creation legislation has grabbed all the Washington headlines this week, the following article appeared in the back pages of the Wall Street Journal.

“Obtaining the permits and approvals needed to build a mine in the U.S. takes an average of seven years, among the longest wait time in the world. So despite having vast underground stores of raw materials, the U.S. is one of the last places miners go to start a project.

At the proposed Kennecott Eagle nickel mine in Michigan’s sparsely populated Upper Peninsula, the wait is at seven years and growing. Global miner Rio Tinto says the project would fill a raw-material gap in the U.S. economy, but the company has yet to produce an ounce of nickel there.

Last month, a state agency issued a final order making state water, air and mine permits effective, but Rio still needs a federal water permit. And the company expects challenges from environmental groups.

Overall, the U.S. is tied with Papua Guinea for the longest approval process among the 25 top mining countries in the world, according to Behre Dolbear Group, an international mining and mineral advisory group. In Australia, a huge mining center, the process takes an average of one to two years.

The length of the mine-approval process means that the U.S., while having the reserves as well as the market appetite for metals and minerals, remains one of the top importers of the materials from Australia, Brazil, Canada and Africa.

“We are becoming more and more dependent on metal imports in the U.S.,” said Luke Popovich, spokesman for the National Mining Association, an industry group. Imports into the U.S. for selected metals—including gold, copper and zinc—rose 8.7% from 1998 to 2008, according to the U.S. Geological Survey.”

Let’s stop this current nonsense and get about implementing policies that will get our farmers growing, our manufacturers working and our miners exploring.

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