PrintOctober 9, 2010
Every Month, They're Lying
Figures for the last significant jobs report before the November election are a major embarrassment for the administration. On October 8, the labor department reported a decline of 95,000 workers, a figure much worse than economists had estimated. This decline in jobs is inescapable proof of the failure of the president's economic policies.
As if the September employment numbers were not bad enough, the figures for August were revised downward by 57,000. And on top of this, the preliminary annual revision of employment showed a further drop of 366,000 jobs. With all of these downward revisions, one has to wonder whom to trust. How far will the September numbers be revised downward in the days just after the November election? How much farther will the annual figures be revised downward when the final report is issued in February 2011?
The dismal figures just reported are far from a one-month or six-month anomaly.
For fourteen straight months now, the unemployment rate has been above 9.5%. Those are fourteen months in which Obama's fiscal policies have had an opportunity to turn things around. In fact, those fourteen months followed directly upon the president's $878-billion stimulus package, which the president promised would keep unemployment below 8%. And yet, since Obama's inauguration, the unemployment rate has risen by 26%, and most economists project that the rate of unemployment will continue to rise well into 2011.
Moreover, the Labor Department numbers are not telling the whole story. According to Paul Godek, an economist with Compass Lexecon, employment relative to historic job growth is 10% below trendline, an all-time low on this important measure of growth. Compare today's figures with those of 1960, when employment was 6% above trendline, or in 1999, when they were even higher thanks to the welfare reforms and spending discipline of a Republican Congress. With job growth at 10% below trendline, employment figures are not going to improve anytime soon.
The only "silver lining," as the president might say, is that the September unemployment rate did not budge. It held steady at 9.6%, but even a cursory examination of the Labor Department report reveals that this was because an ever larger number of workers have simply given up hope. These discouraged workers are not included in the headline unemployment number, but they are represented in U6, a figure that reflects unemployment and underemployment and that now stands at 17.1%, up 0.4% in just one month. What this figure reveals, in other words, is that a growing number of workers are so demoralized that they've stopped looking for work entirely.
That fact is even more frightening than the top-line unemployment figure of 9.6%. It tells us that millions of workers have given up on this economy. Millions of workers, who might otherwise be proud and valued contributors to the nation's economy, are simply sitting at home, skipping mortgage payments and relying on food stamps and other forms of government aid just to get by. The president likes to pretend that big business has failed these workers. He likes to lay the blame on banks that supposedly are refusing to make loans to small businesses. He blames the insurance companies, mortgage brokers, oil companies, hedge funds, and just about every other part of the private sector. What he refuses to do is to look at the effect of his own policies.
Does Obama really expect American energy companies to be out there hiring hundreds of thousands of workers when the president himself has placed the entire Gulf of Mexico under a deep-water drilling ban? Does the president believe that health insurance companies will be expanding their operations when Kathleen Sebelius, Secretary of Health and Human Services, is out there bashing them for rate increases and demanding that they operate at a loss? Does he think that the financial reform bill recently put into effect is going to increase the number of jobs in the financial sector when it specifically strips the major banks of some of their most lucrative profit opportunities?
Month after month now, the Bureau of Labor Statistics has reported weak job numbers -- numbers that U.S. News & World Report has now begun to call "bogus." And yet even as the job market has weakened, the president has pressed ahead with his destructive program of regulation, nationalization, and increased taxation. His top economic advisers, Larry Summers and Christina Romer among them, have begun to abandon the sinking ship. Presumably, none of them really wants to take the fall for an economy that has gone nowhere but down in two years and that shows no sign of a strong recovery.
Soon it will be Mr. Obama sitting alone in the Oval Office, dreaming up more schemes for regulation and taxation. Looking out the window across the White House lawn, it might appear that little has changed. But tens of millions of Americans are now without work, a fact that the president apparently fails to recognize. He presses on with environmental regulation, restrictions on business and industry, and huge tax increases on small businesses and on investors. The First Lady flies off on extravagant resort vacations with her retinue of sixty, while the president spends week after week golfing or exercising his tongue before friendly college audiences.
Meanwhile over 17% of Americans are unemployed or underemployed, and that figure increases every month. What is the president going to do about it? Raising taxes on "the rich," as he plans to do in January, will only make matters worse. Higher taxes on capital gains and dividends will simply drain capital from the private sector. Death taxes will force tens of thousands of small businesses to close up shop. A continuation of high corporate tax rates, the second-highest among developing nations, will only keep American businesses at a disadvantage relative to foreign competitors. Increased regulation on the part of the EPA, the FTC, the FCC, the Justice Department, and other government agencies simply puts more pressure on American companies. And the president's solution to these problems of taxation and regulation? More taxation and more regulation.
For American workers, the disheartening September employment jobs report and those that preceded it are more than enough reason to vote the Democrats out in November. But even if Republicans gain control of both houses of Congress, we will still have a very irresponsible president in the White House. Are his ruinous economic policies a justification for impeachment? That is a question that the American public needs to start asking itself.
Jeffrey Folks is the author of many books and articles on American culture and politics.
