Creating So Many Jobs that Destroy Wealth

By Gary M. Galles. He is a Professor of Economics at Pepperdine. Excerpt:

"Professors Susan Dudley and Melinda Warren have studied federal regulatory agencies that explicitly restrict private sector transactions. They found 277,000 such regulators in 2015 (substantially larger than General Motors’ worldwide workforce) and an 18-fold increase in those agencies’ inflation-adjusted budgets since 1960, to over $57 billion (in 2009 dollars). 

More recently, The American Action Forum reported that Biden administration agencies “published $875.3 billion in total costs and added 4.7 million annual paperwork burden hours” in just one week last month, “just $20 billion less than what President Obama did in two terms,” which its president Douglas Holtz Eakin called “simply a jaw-dropping regulatory blitz.”

Forcible federal interventions often lead to multiplier effects on state and local government employment as well (even if not the Keynesian multiplier effects students hear about in macroeconomics courses). Further, interventions at all those levels also create private sector jobs to comply with the growing extent of their dictation. Many human resources and health care industry jobs, for example, were created to comply with Obamacare, and the mushrooming of Medicaid since then. But for ill-advised programs and restrictions, such jobs can create costs rather than benefits for society.

The sharp increase in government’s “Peter-Paul” (robbing Peter to pay Paul) approach evident in almost every area of public policy also multiplies into more lobbyists being hired to help special interests benefit at others’ expense. Others, in turn, are forced to hire more of their own in self-defense, to combat the extent of robbery they will be forced to bear. The expanded fight to control federal government theft has created a booming job market in the influence industry, which has dramatically stimulated the economy in Washington, DC, but destroyed wealth for people everywhere else in a massive negative-sum game.

Similarly, when laws or rules of questionable constitutionality or legality are promulgated (as with the Biden Administration’s environmental and education policies), it increases the number of lawyers and legal resources the government employs. It also increases the number employed by those who would be abused. Such opposition can be one of the most valuable investments for Americans in stopping such inroads on people’s rights, but even fighting them to a standstill leaves Americans worse off than if those overstepping initiatives had not been advanced in the first place."