The Providence Journal‘s front-page promotional series for Rhode Island’s ObamaCare health benefits exchange continues today with an article about the government-funded start-up’s hiring spree.  Reporter Andy Smith explicitly puts the 75 jobs in the context of the state’s terrible employment landscape, furthering the message that Rhode Islanders need the work:

The recruiting event took place the day before the state releases its latest unemployment figures, for the month of July. Rhode Island had an 8.9-percent unemployment rate in June, highest in New England , with 49,500 residents officially classified as unemployed.

Many in the meeting room fit that category.

But it’s another category of applicants that ought to catch the eye:

Robin Burkitt, of Middletown, said she has a job at a jewelry store in Newport, but her hours were cut from full time to part time. “I’m looking for a full-time job with benefits,” she said.

There are myriad reasons a jeweler in a Rhode Island tourist hub might cut employees’ hours: the failure of a recovery horizon to emerge in the state, impending tolls that threaten to squeeze the flow of consumers from the northeast, or simply the waning summer season.  And then there’s this:

NBC News contacted around 20 small businesses and other entities for this report and found that employee hours are being cut to 29 hours because of Obamacare, despite the delay of the employer mandate. But the White House, NBC News reports, says that there is no systematic evidence that this is because of Obamacare and dismisses the report as anecdotal.

As stated above, there are many reasons that Ms. Burkitt’s hours could have been cut, but her own anecdote highlights an important point that the Providence Journal glosses over.  The government can’t just will economic activity into being.  At first, yes, the money for HealthSourceRI is coming from the federal government, meaning that it’s being extricated from the larger American economy (now or in the future), but once the federal seed money ends, the start-up will be the responsibility entirely of Rhode Islanders, whether through taxes, surcharges on healthcare, or both.

Think about how that differs from private-sector start-ups.  In such cases, the investors are taking risks with their own assets and therefore ensure that the business plan is sound and the organization competent, at least to their satisfaction.  The people running the organization are putting their own resources and careers on the line, so they have incentive to do everything in their power to make it work.

When the government decides to venture into a particular line of business, the money is not that of the people making the decisions, but of the general public.  The people hired for the enterprise have some professional integrity on the line, to be sure, but at its bottom, it’s a job they were hired to do, not an idea that they took it upon themselves to build.  Between those two groups, politics layer many considerations on top of the sheer competency of the people hired to run the organization that reduce the likelihood of success.  And if the business model doesn’t work, the government can simply force the customers (or even people who aren’t customers) to cover the deficit.

All of this is to say that the government cannot simply create economic activity and jobs.  On one end, ObamaCare is forcing private-sector organizations (for which the incentives point more fully toward economic growth) to cut back employees’ hours.  That, on the other end, the law sparks the hiring of some of them full-time (and with healthy benefits, no doubt) will likely fall short of being a neutral tradeoff, let alone a positive one.  The incentives don’t point as fully in the right direction, and the money involved has the cartoonish feel of having been created magically, like play money to fund a pretend start-up.