The term “voodoo economics” was lodged in the political lexicon 35 years ago by George H.W. Bush, referring to presidential rival Ronald Reagan.
The two later reconciled enough for Bush to became Reagan’s vice presidential running mate, but the term survived.
It’s time to dust it off again because the Capitol seems to be infested with voodoo economics these days – logic- and fact-deficient assertions about the seemingly magical economic effects of politicians’ pet causes.
Take, for instance, what Assembly Speaker Toni Atkins has been saying while pushing tax and fee increases to fix our dilapidated highway system.
She has resurrected an oft-cited assertion about public works projects, that “investing” $1 billion will create 18,000 construction-related jobs. Oft-cited does not make it real, however.
Transportation California, the highway construction pressure group, calculates that 25 percent of each construction dollar goes to labor. So $1 billion translates into $250 million in labor or 4.2 million man-hours of work at a “fully burdened” $60 per hour.
That equals one year of employment – 2,000 hours – for 2,083 workers, not 18,000.
Secondly, supposed benefits of spending $1 billion in new taxes never are adjusted for how taxpayers would have spent it on food, housing, consumer purchases or in other ways that would support jobs, albeit in the private sector, and have at least as much multiplier effect.
It’s entirely possible that spending big bucks on highways actually would result in a net loss of employment.
That’s not to say that it would be wrong to impose those new taxes and fees and spend them on repairing our highways. In fact, it probably would be the right thing to do on its own merits, because the system has been neglected for decades and is one of the nation’s worst.
Moreover, having smoother pavement would save motorists money on auto maintenance and repairs.
Atkins is not alone in claiming job creation as a reason for tapping the public for more money.
The backers of Gov. Jerry Brown’s two pet public-works projects, twin water tunnels beneath the Sacramento-San Joaquin Delta and a north-south bullet train, make similarly extravagant and logic-free claims.
The same is true of those, including Brown, who claim that decarbonizing the California economy will have wondrous economic benefits, setting aside any consideration of what the cost-of-living effects on consumers are likely to be.
Another reality-denier is the oft-repeated assertion that giving one company or one economic sector a handout of taxpayers’ money via some tax loophole creates jobs – trumpeted most recently for a subsidy for movie and TV production in Southern California.
It’s just robbing Peter to pay Paul with no net benefit to society as a whole.
There may – or may not – be other valid reasons for enacting these and countless other nostrums that politicians are so fond of sponsoring.
But creating jobs? That’s just voodoo economics.