Jobs & Unemployment

According to Obama, this morning, our economy is moving in the right direction.



In claiming that we are recovering, he ignored the specifics of today's job's report and other economic indicators - that unemployment (U-3) is at 9.5%; that our economy shed another 125,000 jobs; that the work force contracted; that the average hourly earnings decreased; and that the actual measure of unemployment / underemployment stood at $16.5%. The sum total of these indicators point to "a rather serious softening in the employment market." Indeed, the "percentage of the overall working-age population that is in the labor force fell last month to 64.7% -- near a 25-year low." Further, Obama failed to note another ominous indicator:

New orders for factory products tumbled much more than expected in May, posting their sharpest drop since the depth of the recession and their first decline in nine months, a government report showed on Friday.

Ignoring all of the above, Obama claims that, this year alone, "government" created "600,000 private sector jobs." That is laughable.

The reality is that we have hemorrhaged over 8 million jobs since this recession began. As to Obama's arrogant assertion that he has created 600,000 private sector jobs - the government cannot create a single private sector job. What the government can do is twofold. One, government can direct funding for government contracts to the private sector. But Obama has gerrymandered that process by freezing out non-union businesses that make up 92% of the private sector.

Beyond such government contracting, government can only create the conditions effecting the entire economy that will help or hurt private sector employment. As near as I can tell, there is nothing that Obama has done to positively effect the economic environment. To the contrary, his massive increase in spending and entitlements, with the promise of more taxes and entitlements to follow, are creating the conditions for economic malaise. Indeed, Obama is directing our economy on a downward spiral of historic proportions. The graph below shows current job losses in comparison to previous post-WWII recessions:

So how is the left attempting to address this mismanagement of epic proportions? Beyond the fantasies spun by Obama, there is the effort to paint Republicans as heartless for refusing to sign yet another blank check to extend unemployment benefits. It is actually rather comic, between Nancy Pelosi claiming that unemployment benefits are the best method to increase employment to Harry Reid, et. al, screaming that the Republicans are intransigent and unfeeling while it is they themselves that are refusing any deal:

Congress adjourns this week for the July Fourth recess without having passed a bill to extend unemployment insurance benefits to 1.3 million people who started losing them this month.

Democrats have been painting Republicans as unsympathetic to the long-term unemployed who will be unable to collect benefits, but Democratic leaders have rejected several offers by the GOP to vote for the bill if at least some of it is paid for.

"My concern is that the Democrats are more interested in having this issue to demagogue for political gamesmanship than they are in simply passing the benefits extension," said Sen. George Voinovich, R-Ohio, who offered a deal that was rejected by Sen. Majority Leader Harry Reid, D-Nev.

Democratic leaders were quick to attack Republicans for opposing the benefits, with House Speaker Nancy Pelosi, D-Calif., calling their opposition "just cruel" and "contrary to what our country is about."

Republicans, meanwhile, stood firm in their argument that extending benefits should not add to the deficit.

Voinovich told Reid he would vote for extending benefits if at least half of the extension could be paid for with unused money from the $787 billion stimulus package.

"I came to the table with a fair compromise, and the ball is in their court," said Voinovich, whose state suffers from a 10.7 percent unemployment rate. . . .

Obama should be doing everything possible to create the environment for private sector job creation. It goes without saying that his administration is on the opposite course.

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Stimulating NewMath

Not only has the stimulus led to a massive number of new jobs, apparently its led to an Orwellian rethinking of the science of mathematics.

In 2009, the Obama regime told us that, without the stimulus, our workforce would shrink to 133.9 million jobs.

Well, 14 months into the stimulus, we now have 129.7 million jobs - not surprising really, since the stimulus was aimed at everything but the creation of new jobs in the private sector.

And yet . . . the Obama Administration, but a few days ago, claimed that the stimulus "created or saved" 2.8 million jobs.

So lets see . . . . 133.9 - 129.7 = 4.2 million less jobs . . . . [erase] . . . hmmm, maybe if I carry the 2 and divide by the square root of Obama's I.Q. . . . nope . . . . jeez, I just don't understand this new math . . . .

As Big Government points out, to get to the Obama administration's 2.8 million jobs created or saved, the administration had to subtract 7 million jobs from their 2009 baseline of what the workforce would been without the stimulus. That is new math indeed.

The reality is that, for all practical purposes, the only thing the Obama stimulus actually saved were public sector jobs and some very small, very limited jobs in the quasi-private sector that deal with green energy and/or that rely on government contracts. That means nearly three quarters of a trillion dollars that could have gone to stimulate the private sector was wasted. The vast majority of the jobs attribuatable to the stimulus are in the public sector that, itself, produces no new wealth.

Thus, in the words of that iconic American philosopher, Rev. Jeremiah Wright, "America's chickens are coming home to roost." The public sector, having survived a year on borrowed Obama-money, is now now facing deep cuts. So will the Obama administration begin subtracting those "saved or created" public sector jobs now getting the axe. Actually, even that doesn't begin to accurately reflect what the stimulus has cost the nation. That three quarters of a trillion dollars that mostly went to prop up the pulbic sector has to be analyzed in terms of the lost opportunity costs had we used the stimulus to help create permanent private sector jobs. Somehow, I think that it would take one hell of a lot of NewMath to make that number look good from the left's perspective.

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Stimulus, Unions, Obama & Jobs

When Obama sold us the massive piece of Democratic Party pork that was the 2009 Stimulus Bill (or "Porkulus" in the common vernacular), he did so on the promise that it would keep unemployment under 8%. To this end, he relied primarily on funding "shovel ready" infrastructure projects. Of the $787 billion dollar stimulus, $81 billion was slated to go to these projects. Given that construction jobs are temporary and, in some cases, very specialized, this hasn't worked out so well.

The most recent figures put the unemployment rate at 10%, but as Hot Air points out, even that number is deceptively low.

The only reason the unemployment rate stayed at 10.0% was because so many people stopped looking for work at all. The number of people in the job market dropped to its lowest level since 1985.

Now Obama wants to double down with Son of Porkulus in an effort to bring down the unemployment numbers. He is asking for an additional $79 billion to fund "shovel ready" infrastructure projects, but in a detailed analysis looking at local unemployment figures, AP reports a bit of a bombshell in Obamaland today - these "shovel ready" projects have had no effect on unemployment. This from AP:

Ten months into President Barack Obama's first economic stimulus plan, a surge in spending on roads and bridges has had no effect on local unemployment and only barely helped the beleaguered construction industry, an Associated Press analysis has found. . . .

While it might have escaped the left's notice as they ran at top speed towards the trough, small business is still the major engine of our economy. According to the historical records of the SBA, small businesses employ just over half of the country’s private sector workforce and have been responsible for some 90% of all new jobs created annually. Yet the Porkulus all but ignored small businesses. Between tax credits and pumped up SBA lending funds, the grand total of the Stimulus directed at small business was worth approximately $21 billion or 2.6% of the total Stimulus package. Indeed, add together the small business funds and the infrastructure funds, and you still have a Stimulus Bill that, looked at in the best of lights, only set aside 13% to actually create - or save - jobs in the private sector. Huh? Where did the rest go?

The reality is that, besides the massive special interest pork in the bill, nearly one third of the $787 billion to save public sector / union jobs - i.e., those folks who form the Democrats power base. This from Michael Barone writing in the Washington Examiner:

Public-sector employment peaked at 22.6 million in August 2008. It fell a bit in 2009, then has rebounded back to 22.5 million in November. That's less than a 1 percent decline [compared to a 6% decline in the private sector].

This is not an accident; it is the result of deliberate public policy. About one-third of the $787 billion stimulus package passed in February 2009 was directed at state and local governments, which have been facing declining revenues and are, mostly, required to balance their budgets.

The policy aim, Democrats say, was to maintain public services and aid. The political aim, although Democrats don't say so, was to maintain public-sector jobs—and the flow of union dues to the public employees unions that represent almost 40 percent of public-sector workers. . . .

Thus do our Democrats seem like some peverse sort of Robbing Hood, stealing from the private sector to give to their union supporters. In this, Obama seems to be looking to California's legislature - a body which has moved the Golden state to the precipice of bankruptcy and created, as George Will wrote recently, a "'unionocracy,' run by and for unionized public employees, such as public safety employees who can retire at 50 and receive 90 percent of the final year's pay for life." And as Victor Davis Hanson opines, the "California model is important because Obama is adopting it as a blueprint on a national scale." That is scary.

In any event, the smoke and mirrors of the stimulus, so little of which went to create public sector jobs, is not the end of the story. On top of that are Obama's proposed major pieces of legislation - health care reform and cap and trade - that portend to saddle small businesses with a far greater bill than $21 billion. Thus is it any surprise that real unemployment is well above 10%, that our tax base is hemmoraging while our national debt is shooting up into the stratosphere? Can't you feel the hope n' change?

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