The longer this recession goes on the more people are going to forget that in the long run job creation doesn’t matter. Because output is below potential and employment is below the natural rate, we do care about job creation in the short run. The slower the recovery is, and it’s looking slow right now, then the more job creation matters in the medium run as well. But in the long run full employment reins, and you can only create a job by killing a job.

Consider two scenarios. Capitalist A took over a company that fires half its workforce without decreasing output. Capitalist A is a dreaded jobs destroyer, and is pilloried for this (to be fair, some capitalist politicians bring this on themselves by bragging about how many jobs they’ve created). Now consider Capitalist B who took over a company that doubled its workforce and its output. He is a Real Jobs Creator, hailed as a champion of American Interests (and he wants a higher tax rate than his secretary).

But if output has doubled at Capitalist B’s factory, then surely he has taken market share from his competitors, which means his competitors have most likely had to lay workers off, perhaps half of them. The fact is that direct jobs creation that we see can often be completely offset by job destruction that we don’t, and in the long run it pretty much has to be.

While do want to celebrate job creation in the short run, in the long run productivity and innovation are how we improve well-being in this country. So when some capitalist-turned-politician comes out bragging about his career of job creation the reaction of the economist should not be to get in an argument with him about whether or not he was in fact a job creator. By all means, point out that his claims are unjustified at best. Score the political point that the politician has opened himself up to. But the job of the economist is not to accept false terms of debate because doing so is the best way to make the politician look bad. An economist should point out that in the long run job creation doesn’t matter, it’s productivity and innovation that matters, and declare that if the politician wants us to judge his contribution as a capitalist he should tell us about the productivity and innovation he delivered.