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Campaign warning: job creation mostly beyond politicians' power

With Election Day arriving Tuesday, political ads are everywhere and newspapers, television and radio feature interviews with candidates. A common theme will focus on the economy and jobs.

If it’s a candidate for the state legislature, Congress or the governnor’s mansion, the message often is “vote for me because I will create jobs.”

Politicians love to promise better times. They know it’s what voters want to hear.

The campaign saying that people usually vote on “pocketbook issues” is true. Bill Clinton’s 1992 presidential campaign famously stuck to the internal mantra, “It’s the economy, stupid.”

Politicians know that economic concerns, particulary after the long recession that followed the financial crisis of 2008-09, are a big concern for voters. So, challengers promise to create more jobs than the current office holder. Incumbents boast about job creation, pointing to falling unemployment rates, failing to mention that the official jobless rate has fallen, in part, because many people have stopped looking for work and are not counted in official unemployment figures.

The problem with promising job creation is that government doesn’t create jobs, at least not the kind needed to grow the economy and lift living standards. But that doesn’t stop politicians from claiming they will create jobs.

Earlier this week, Hillary Clinton created a controversy with a speech in Boston when she said the private sector doesn’t create jobs. She quickly backed away from that statement.

Campaign ads and interviews with candidates still feature promises of job creation. But most economists agree that politicans don’t have much to do with the economy or jobs, one way or the other. The bigger factors tend to be larger macroeconomic trends, both national and global.

It is true, though, that politicians and government can create an enviroment that is conducive to job growth. Republicans mostly argue that means lower tax rates and regulations that are not burdensome. Democrats generally say government spending puts money into the economy and creates more consumer spending, which helps business by increasing demand eventually leading to more hiring. Left-leaning politicians also argue increasing unemployment benefits, welfare payments and the minimum wage do the same thing — increase money circulating in the economy, stimulating demand.

Despite those reasonable- sounding arguments, economists say there is little evidence that politicians have much impact on job creation.

In a good economy, economists say, politicians can help job creation most by not screwing things up. It could be added, especially after the recent financial crisis, that politicians can help long-term economic growth by ensuring reasonable regulation, such as preventing Wall Street banks from making risky bets and watching for excessive debt levels so that crashes are less likely.

In bad economic times, politicians boost government spending, injecting money into the economy to soften the recession’s human and economic harm.

When politicians promise to create jobs or take credit for economic growth, it’s mostly campaign talk and should be greeted with skepticism. Having politicians taking credit for creating jobs sounds like the old proverb about the rooster boasting that his crowing raised the sun.

Job creation rises and falls with regular economic cycles. Most jobs created, or lost, would have been created, or lost, regardless of who is in Congress, the state legislature, the governor’s office or the White House.

Political analysts call campaign time “silly season” for a variety of reasons. One of those reasons should include politicians promising or taking credit for job creation.

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