Federal Incompetence Stifles Job

“Were we directed from Washington when to sow, and when to reap, we should soon want bread.” ~ Thomas Jefferson

Each day we see proofs of the wisdom of the Founding Fathers in the creation of a federalist form of government which gave superior authority to a central government within a very limited sphere, and left all other functions to the states, or the people. Far from being the limited government which our Founders envisioned, the federal government today is a monstrous leviathan which is equal parts incompetence and avarice. This is what happens when government attains more power. Government is the only entity legally able to use force to achieve its goals. Government is a monopoly, and therefore does not have to be efficient or innovative on order to retain its “customers.” It is essentially immune from the disastrous consequences of its decisions and actions. It can compel continued allegiance and higher payments.

A timely example of the results of government expansionism is in the continued stagnancy of our economy. In the last days of the Bush presidency, and expanded throughout the Obama presidency, the federal government took steps which would supposedly save the economy from a financial collapse (which itself was the result of government interference in the market). With the passage of the “stimulus” bill, unemployment was not supposed to reach 8% according to the Obama administration, yet it did that and more. Unemployment spiked above 10% AFTER the near-trillion dollar stimulus was passed, and stayed at or above 9% for almost three years, before dropping to above 8%, a point we were not supposed to have reached at all.

This week the Bureau of Labor Statistics reported an anemic 80,000 jobs created in June, about half the level needed to keep up with population growth, and about a quarter of what we need for healthy job growth. Spinning harder than a Maytag, the chairman of Obama’s Council of Economic Advisors, Alan Krueger, told us that “It is important not to read too much into any one monthly report. There are no quick fixes to the problems we face that were more than a decade in the making.” Maybe so, but it is not just one monthly report, it is nearly four years worth of monthly reports.

Even more demoralizing, the 8.2% unemployment rate doesn’t tell the whole story. Since Obama took office, the labor force as a percentage of total U.S. population shrunk by 2.1%, many of whom are people that simply gave up looking for work. Under the criteria used by the Obama administration, when someone gives up trying to find a job and drops out of the workforce, they no longer count as unemployed. If the workforce labor participation rate were the same now as on the day of Obama’s inauguration, reports James Pethokoukis of AEI, the true unemployment rate would now be 10.9%.

Furthermore, as reported by reporter David Harsanyi, “Approximately one-third of positions created in June were temporary service jobs. There were 821,000 discouraged workers in June. ..Unemployment for black Americans rose to 14.4 percent…Fears of a serious slowdown in an already tepid recovery are real: In April, May and June the economy created 75,000 new jobs, while there were 226,000 new jobs created on average in January, February and March. This week we also learned that corporate profits declined last quarter, the first decline since the fourth quarter of 2008. Also, manufacturing shrank in June for the first time in nearly three years.”

One can easily see why Obama doesn’t want us to look too much into the numbers. How many times in the last year have we seen Obama tout even the most miniscule improvements in the jobs numbers as proof that his economic plan is working, only to be utterly silent when those same jobs numbers are revised downwards the following month?

Some defend Obama’s policies as being necessary to improve the economy, and others point to those policies as proof that Obama meant what he said when he told us he wanted to “fundamentally transform” America into his vision of a European-style socialist democracy. Regardless of which side you take, it misses the point. The point is not what his intentions are, but what the results are; and the results have been devastating to the U.S. economy and the American workers and families.

Certainly, no one can claim Obama hasn’t invested energy and political capital into changing the American economy. His first major achievement in office was the passage of the “stimulus” bill, which clocked in at nearly a trillion dollars. That bill was loaded with incentives to direct the economy the way Obama and the Democrats deemed best. There were giveaways to labor unions, massive funding for the public sector workforce, money for infrastructure, high speed rail, and billions of dollars for “green energy” companies. In signing the bill, Obama proclaimed it would help us by keeping teachers, firefighters and policemen on the job, and the “investment” in green energy would generate millions of new jobs.

In reality, we ended up with more than $5 trillion in new debt, forty-one consecutive months above 8% unemployment, billions of taxpayer dollars wasted on green energy companies, whose owners just happen to be well-connected Democrat donors, which are now going bankrupt at an astounding rate. We have massive new regulations that stifle innovation and keep business owners fearful of expanding and hiring.

The great fallacy is that a relative handful of politicians, many with little or no experience in running a successful business (including Obama and the vast majority of his cabinet), and with no direct consequences if their grand ideas fail, can better allocate finite resources than those whose money is at risk.

A true free market (not the corporate socialism model we operate under today) is the best avenue we have for widespread prosperity. That is because when there is great risk of personal loss, decision makers are less likely to gamble on a venture with a low likelihood of success. Conversely, where there is a likelihood of great reward, private capital will fill the need for development funding. This leads to incredible levels of innovation.

Consider two examples: after the government takeover of GM, we got the Chevy Volt, an outrageously expensive car that has sold only a few thousand units despite billions of taxpayer dollars in direct subsidies and tax credits for buyers. Supposedly cutting edge, it is most well known for catching on fire.

On the other hand, look at the information technology industry, a market advancing so rapidly that government can’t write regulations before that technology is essentially obsolete. Tens of millions of Americans now walk around with smart phones that not only can send and receive calls virtually anywhere by connecting with satellites traveling at 18,000 MPH in geosynchronous orbit in space, but can carry around hundreds of music albums and thousands of books on a chip no larger than a postage stamp.

So please, tell me again…how is government going to be our great savior? It can’t even get out of its own way. And THAT is why all of the ministrations of government to improve the economy have been massive failures. Government exists to protect our rights, not to direct every aspect of our lives.


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