The Bureau of Labor Statistics August 6, 2010 report for July, 2010 is glum. Despite spending $800 billion in Federal stimulus money:
· The unemployment rate remains high, at 9.5 percent.
· Nonfarm payroll employment declined by 131,000 in July.
· 1.21 million discouraged workers have dropped out of the labor force and aren’t even included in the unemployment statistics. These discouraged workers are up 389,000 from a year earlier. If these discouraged workers were included in the labor force, the unemployment rate would be 10.5% instead of 9.5%.
· While the unemployment rate of whites has remained high (around 8.6%) over the past few months, the black unemployment rate has not improved and stands at 15.6%. Asian unemployment rates are the lowest, at 8.2%.
In January of 2009, Christina Romer, chairwoman of the president’s Council of Economic Advisors, released a report called “The Job Impact of the American Recovery and Reinvestment Plan. The report projected that the $800 billion stimulus plan would create 3-4 million jobs by the end of 2010. Without the $800 billion stimulus the unemployment rate was supposed to hit 8.5 percent, rising to 9% in 2010. With the stimulus, they projected that the unemployment rate would peak at less than 8% in 2009.
Romer announced her resignation last week. Clearly the stimulus spending hasn’t created jobs, but has destroyed jobs. Why haven’t the jobs returned?
Beware when ANY politician says that he is going to create jobs. Politicians don’t create jobs; entrepreneurs create jobs. Government jobs bleed revenue from the private sector. While government employees re-circulate tax money back into the economy in the form of consumption expenditures, all of these funds were initially drained out of private hands in the form of taxation, making it even more difficult for entrepreneurs to invest in people and equipment to expand their businesses. So why aren’t the small and medium businesses expanding their output and employment?
The answer to job creation is simple: the current regime in Washington (Obama, Pelosi, Ried, etc.) have demonstrated to entrepreneurs that they are philosophically job-killers. The additional costs to businesses of cap and trade legislation is job-killing. Obamacare is not only job-killing, but creates a lot of uncertainty for prospective employers. The increase in burdensome financial regulations just passed in Washington is job-killing legislation. Proposals to do away with confidential ballots “card check” in union elections is a job killer. The financial burdens of the $800 billion stimulus package is a job killer.
The only way to create jobs in the United States is for the government to post an “open for business” sign in front of our doors. The current congress can’t and won’t do it. It is time to blow up the political careers of congressional incumbents. Only then will the entrepreneurs stir.