Friday, January 16, 2009

Job Creation

Rather than putting money in bottles and burying them below my Westwood house, I have unintentionally been pursuing another Keynesian approach for creating jobs in this tepid economy. Dora and I had ordered an outdoor gate to be installed on both sides of our house. Yesterday, when we were at work --- the installation guys started their work. Last night, we saw two clues that something had gone wrong. Our water had been turned off and the appliances in the kitchen did not work. While I don't fully understand cause and effect, it dawned on me that the only "treatment" that the house had received was that the "outdoor gate guys" had been working on the new gate. I wondered whether these events were related but this "Freakonomics" was beyond me.

Today, we turned the water back on for the house but the kitchen appliances still had no electricity. I called the electrician and left a message. Today, when I was walking around the house I saw a small geyser about 4 inches high. On one side of our house the gate installers had clearly nailed in a nail into a water pipe and this had created the geyser. Without telling us, these guys shut down our water to stop this geyser and this geyser started again when we (not knowing about the man made leak) started up our water again.

Carlos, my trusty electrician, then came by and started to investigate why the kitchen electricity was out. He soon discovered that on the other side of the house where the other gate was being installed that the installers had hammered a nail into my home's side wall. Unlucky for me, they hit (without knowing it) an electric wire --- smashing it in half and stopping my kitchen's flow of electricity.

So today, there were 20 guys at my humble home --- painting, fixing the plumbing, and working on the electricity .

By the end of the day, I had the satisfaction of knowing that I had personally done my part to stop this recession and created jobs for my Los Angeles (without any $ from Big Ben Bernanke). Plus the geyser was dead and the kitchen appliances now worked again.

So , my fellow economists; what are you doing to jump start our economy? Can you match my effort? Dora and I are trying to sell our new book. We are employing half of Los Angeles and I am teaching 170 students the basics of free market environmental economics. That is active involvement in the market place.

Switching back to academic economics, while my tale of job demand based on short run shocks provides one snapshot of our economy. John Cochrane (one of Chicago's great teachers) offers you the opportunity to learn form him in this sensible Op-Ed.

John Cochrane's New Op-Ed --- It makes a lot of sense