Jane Galt has a righteous rant on economic illiteracy, and specifically the bizarre notion that disasters (like this week’s blackout) are good for the economy, because they create jobs for people who have to clean up the mess. As I said in her comments section, this is due to an inability to distinguish between wealth creation, and job creation.

The two are, in fact, entirely independent of each other.

Jane’s example (which I often use myself) of hiring people to move holes from one location to another provides jobs, but it creates no wealth at all.

On the other hand, if I write a story, and put it out on the net for people to read, and people enjoy reading it, then I’ve created wealth in the sense that I’ve improved their lives, but no jobs were created.

Sadly, it’s a fallacy to which space enthusiasts (and particularly NASA enthusiasts) are prone as well. Often, when touting some program, they talks about how many “jobs” will be created in Houston or Huntsville, or in the district of some California contractor. And when someone says that “money is wasted by sending it into space,” they assume that the critic is stupid, or confused, and respond, “Not a single dime is sent into space. We don’t fill up the rockets with bushels of money and send it off to Mars. Every dollar is spent right here, on good old Mother Earth.” And even more amazingly, they say it as though it’s a useful rejoinder.

But of course, they’re attacking a strawman, because no serious critic of the space program literally believes that we are shipping currency to the heavens.

As Jane said, it’s all about opportunity costs. Any government expenditure is going to create jobs. The issue is whether it will create anything of value, other than paychecks for favored people.