PrintSeptember 6, 2010
Obama's Silver Lining?
The August employment figures are dismal. Only 71,000 new jobs were created in the private sector in this, the beginning of the second year of economic recovery. At this rate, economists tell us, the unemployment rate will continue to rise indefinitely, and that is just what's happening. It is now 9.6%, up from 9.5% the previous month.
Not to worry -- President Obama has detected a "silver lining" in these numbers. The private sector, he noted on Friday, "is creating jobs ... just not enough." That's like saying the Cubs are getting hits, just not enough. Someday, though, they will get enough to win the pennant and even the World Series. As for the economy, at 71,000 jobs per month, it will take 118 months, or almost ten years, to win back the 8.4 million jobs that have been lost since the Obama recession began. Where exactly is the silver lining?
Maybe the silver lining is out there with the "green shoots" that Obama detected back in the spring of 2009. That was the same time he promised that unemployment rates would not exceed 8% if his $862-billion stimulus bill was passed. The stimulus spending, he stated, would create four million new jobs. Instead, six million jobs have been lost since he took office, and unemployment rates show no sign of declining. In fact, they are predicted to rise above 10% by the end of the year.
The White House, which always has a glib answer for everything, came out with an explanation of rising unemployment rates. Rates are rising, they say, because the economy is improving and more people are now seeking employment.
Unfortunately, that answer doesn't work. For one thing, it raises the question of why all those workers were so discouraged that they were not seeking employment to begin with. It was because Obama's handling of the economy was so bad that it did not even occur to them to look for a job. Now that a few more of them are climbing out of their moms' basements to go fill out applications, the question remains: where are the four million jobs that Obama promised? For that matter, where are the 16 million jobs created under President Reagan, and this from a much smaller population base? Where are the 52 consecutive months of economic expansion and five million jobs created under Obama's predecessor?
As Democrat Rep. Steny Hoyer put it, "We haven't had success. We've had progress." Well, actually, not much progress. In the second year of the Bush economic recovery (2004), the unemployment rate was 5.4%. It continued in the 5% range or below for most of the Bush presidency. There is a great probability, according to the best estimates, that Obama, when he is voted out in 2012, will leave office with an unemployment rate above 9%. Not only that, but the average unemployment rate for the four years of his presidency will almost certainly stand at above 9%. That is the worst showing since Herbert Hoover.
Oddly enough, Obama's highly educated squad of advisors has failed to identify the chief cause of unemployment: lack of growth in the economy. In fact, the word "growth" is noticeably absent in Obama's speeches. Instead, there is a great deal in his addresses about "fairness," "subsidies," "stimulus," and "benefits." There is nothing about the sort of growth that stems from private investment based on the worthy expectation of profit. As Obama put it in one of the most sophomoric pronouncements in presidential history, "[n]ow is not the time" for profits.
Has the president ever considered the fact that his relentless campaign against profits might have something to do with the hesitancy of businesses to invest and expand? Business is now faced with enormous tax hikes, burdensome health care mandates, unrealistic environmental restrictions, an explosion of legal actions on the part of trial lawyers and our own government, and increased union organizing spurred on by Obama appointments to the Labor Relations Board and other agencies. With all this, how can the president pretend that his policies have nothing to do with the failed recovery?
As Thomas Donlan wrote in a recent issue of Barron's, those "companies that are successful in international competition" are among the prime targets of Obama's attack on business. Why? Because names like Intel, IBM, ExxonMobil, and Bank of America are the most visible symbols of American capitalism. By undermining our great corporations and regulating their profits, Obama is shifting power from the free market to government.
It is ironic that Obama expects those same corporations to bail him out by investing more, even as he demonizes the private sector for its "evil" profit motive. Earlier this summer at a meeting of the Business Roundtable, a group of leading CEOs from America's largest companies, Verizon CEO Ivan Seidenberg stated that Obama's policies had "reached a point where the negative effects ... are simply too significant to ignore." Roundtable president John Castellani listed a number of specific measures that could be taken to promote growth, including lowering of corporate taxes and reducing specific regulations, including provisions of the recently passed financial reform bill. Obama has taken action on none of these.
How do you judge a president who spends his first two years in office trashing private enterprise and then blames everyone but himself for the economic failure that results? Maybe Obama, who wants the EPA to put letter grades on vehicles (A+ to D-), should assign a grade to his own handling of the economy. Or maybe we should assign one for him. In the topsy-turvy manner in which he sees the world, he would surely assign himself an A+.
Jeffrey Folks is the author of many books and articles on American culture and politics.
