I want to open this discussion by quoting the following:
WAMARA MWINE: At the White House Briefing on On Wednesday, December 9th, Press Secretary Robert Gibbs said since the beginning of the year the country has gone from a loss of 700,000 jobs to a loss of 11,000 jobs. He said, and I quote: “So obviously what happened in the beginning of the year — we’re seeing progress,” referencing the president’s efforts. What do you make of these numbers? Does solely reducing the job loss suggest that the recession is actually ending?
JAMES GALBRAITH: The comment that a loss of 11,000 is better than a loss of 700,000 almost reaches the depth of insight achieved by President Coolidge, when he ( is said to have ) said that “when men are out of work, unemployment results.” In the real world, we will need between 250,000 and 300,000 new jobs every month for five years — sixty months in a row — to return to full employment. I would like to know whether anyone in the administration believes that anything presently in the pipeline will achieve this. I do not.About two-thirds of the economy involves consumer spending. In fact, for a fragile economy, we are seeing some troubling signs, the Consumer Confidence Survey which dropped sharply in June continued its drop last month. Saving--normally a favorable trend--is ironically reaching its highest levels in recent memory; these savings mitigate whatever the progressives are attempting in terms of the stimulating the economy. Too much savings, in fact, can turn into a vicious circle, including ruinous deflation, if consumers believe that tomorrow's dollars will go further than they do today. Remember how condescending progressives sneered at Bush's concerned suggestion, roughly a year before the official start of the recession, that people shop more?
Most people, including myself, know family members or relatives affected by the recession and the jobless recovery. But probably the most telling anecdote involves one of my brothers, an energy industry engineer whom earns a comfortable living and usually a decent yearly bonus; he and his wife have owned a timeshare in Mexico and almost invariably go on nice vacations. But over the past year or so, he privately told me they wouldn't go on their typical vacation; they were going to downsize any personal travel. Among other things, the yearly bonus was looking iffy.
July's job numbers, out today, are underwhelming; total employment fell by nearly twice what was expected (131,000), while private sector numbers were about 20,000 less than expected (90,000), although improving over June's more modest gains. May and June's numbers saw a downward adjustment of nearly 100,000 jobs. The unemployment rate stood steady at 9.5%, better than the 9.6% expected, although with total employment dropping, this clearly reflects discouraged workers giving up on their job search and hence not counted in the unemployment rate.
Do I have a magic answer? No. Jobs follow economic growth. We have a lot of excess industrial capacity. We are recovering from a massive real estate bubble; progressives can argue all they want that the bubble was George W. Bush's fault, but the fact is that Clinton became President as we emerged from the last real estate correction and two-thirds of the housing market expansion occurred on Clinton's watch. Both parties during the house bubble had vested interests in making housing affordable for higher-risk/lower-income applicants. But all that is spilled milk: what do we do now?
There are a few things that can help. First of all, do something I won't benefit from: maintain the status quo in income and investment taxes at upper-income levels. This doesn't look promising given the recent Senate party line rejection (except for Ben Nelson (NE)) of amendments to extend the Bush tax cuts for the upper-income taxpayers and small businesses. This is based purely on class warfare ideology; it is all about a counterproductive pathological compulsion to punish higher-income taxpayers for their allegedly ill-gotten economic success. (The Democrats are the blue party? In my view, they are the green party--as in 'green with envy'.) The progressives just don't get it. They think it's more important to get their extra pound of flesh in order to subsidize such worthwhile "stimulus" projects like replacing windows in unused buildings. The higher-income taxpayers have more discretionary income with which to purchase goods and services and/or invest in business and jobs. The idea that, after raising the national debt by $3T, opposed by higher-income people, the progressives claim that this incremental tax increase is needed to close the deficit takes extraordinary chutzpah.
Second, the Democrats have introduced absolutely unnecessary convoluted 2000-page bills, new taxes and penalties, an offshore oil moratorium, intervention in corporate bankruptcies, and countless regulations and new bureaucracies. It creates chaos in the private sector; think of it--if it rains so hard you can barely see objects in front of your car, you slow down until you have better visibility. The Democrats have been more anxious to take maximum advantage of their virtually unprecedented lopsided Congressional majority and the White House than to think about what job creators look for in public policy. What is needed is patience and stability. If the President tomorrow announced a moratorium on federal spending, new government regulations, and tax increases for the remainder of his first term, the equity markets would explode on the upside. Does clearer visibility guarantee economic growth? It's more complicated than that because public policy is only one factor in business decisionmaking.
Third, the Democrats could have made better use of the stimulus money, e.g., by lowering the costs to invest and to hire workers, by providing a more inviting environment for economic expansion, instead of frittering it away on state bailouts and boondoggles like high-speed train systems which will never make enough to cover their operational costs, etc. Suggesting social welfare net dollars are a "stimulus" is disingenuous; for example, a supermarket selling to the same number of customers isn't going to expand its locations and staffing.
Obama's partisan nonsense about the Republicans peddling the same old ideas is in a sense true: we conservatives share Bush's belief in the primacy of the private enterprise system, but we reject what Bush and Obama had in common--increased, ineffective spending and government intervention in the private sector as standard operating procedure.
I do not know the outcome of this fall's election--but this much I can say: I suspect that the history books will record the political hardball that Obama and the progressive Congressional leadership was a lost opportunity. By forging a truly bipartisan approach, the Democrats could have argued that the Republicans shared credit for the massive spending and government overreach. But nearly 20 years after the "it's the economy, stupid" of the Clinton campaign, the American voters are mystified by the Democrats talking about climate change legislation and an unpopular health care transformation bill, instead of focusing on how to get the economy back on track in the midst of one of the worst recessions in decades.
My New Entrepreneurial Hero: Julie Murphy
In my April 5 post, I noted a few captions I had written in response to an invitation by the Worth Reading blog (along with others) in reaction to a featured photo of an obviously glum and bored young girl in a crowd immediately in front of The One. My favorite caption won a compliment from the blog's editor, and I'll repeat that caption here:
My taxes are going up at the end of the year, I'll have to pay a penalty if I don't cover Billy's health care insurance, I'm required to post an ingredient label on each glass, I have to send in my estimated self-employment tax payment this quarter, I just got an audit notice from the IRS, and progressives want to slap a surtax on each drink... Things were a lot easier when my mom used to run a lemonade stand....
 |
| Courtesy of Torsten Kjellstrand / The Oregonian |
DON'T SWEAT THE SMALL STUFF! You government parasites are crushing the spirit of this young lady, and I won't abide it. How dare you teach her that the government will use any law out of context to impose its self-serving, presumptuous, condescending, arbitrary fiat, making economic liberty little more than empty words! You serve at the pleasure of the people; the people do not bow down to some pretentious bureaucrat's throne.
As to that beautiful gift from God, Julie: if I ever meet you in person, I'll be happy to pay you for a whole pitcher of $1/glass lemonade. Make mine sugar-free....
Political Cartoon
Glenn McCoy observes the fading popularity of the "hope and change" President. The perpetual campaign rhetoric just doesn't wash anymore; the American people just aren't buying it (because they need jobs).
Quote of the Day
The wise man in the storm prays to God, not for safety from danger, but for the deliverance from fear. It is the storm within that endangers him, not the storm without.
Ralph Waldo Emerson
Musical Interlude: The American Songbook Series
Harry James, "It's Been a Long, Long Time"
