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Saving Jobs

The President-elect has set a goal to "save or create 2.5 million jobs" by January of 2011.  In his column published in yesterday's Chicago Tribune George Will raised some important questions about that goal.  He first noted the difficulty in measuring the number of jobs "saved".  Jobs are being lost and created all the time and, he references Joseph Schumpeter's concept of "creative destruction" (discussed in this space - see previous posts) in his discussion to emphasize the ebb and flow of destruction and creation of jobs.  Ours is a dynamic society and it is very difficult to determine a point in time with appropriate limits to calculate job creation.  More importantly, using India's experience as an example, Will points to the utter failure of central planning to "save" or create jobs over the long term (I would refer you to the work of Friedrich Hayek for the proof of this).  As Will concludes "everyone agrees that Obama's economic team is composed of brilliant economists."  Unfortunately that spelled "misfortune" for India and may be so for us as well.  Left alone, the market will work through the process of creative destruction and the creative result will be growth and new jobs.

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