jobs

Another dismal jobs report

The Bureau of Labor Statistics (BLS) dropped a bomb this morning. Yesterday, there were some positive signals that job growth was increasing compared to recent months. The ADP estimate for August came in at 201,000, which was much higher than the 140,000 estimate.

But the official job report for August was nowhere near expectations. According to the BLS, the economy created 96,000 jobs in August with estimates for June and July being revised downward:

U.S. employers added 96,000 jobs last month, a weak figure that could slow any momentum President Barack Obama hoped to gain from his speech to the Democratic National Convention.

The unemployment rate fell to 8.1 percent from 8.3 percent in July, but only because more people gave up looking for work. The government only counts people as unemployed if they are actively searching.

The Labor Department also says 41,000 fewer jobs were created in July and June than first estimated. The economy has added just 139,000 jobs a month since the beginning of the year, below 2011’s average of 153,000.

That’s not good at all, folks. Remember that the economy needs to create 150,000 jobs each month just to keep up with population growth. So while the spin will be that this is positive, but the economy is still experiencing essentially a net-zero job growth and more people are giving up hope of finding work. Futhermore, James Pethokoukis notes that “[i]f labor force rate had just stayed same as last month, [the]unemployment rate would be 8.4%.”

CBO issues another “fiscal cliff” warning

Back in May, the Congressional Budget Office (CBO) issued a stark warning to Congress that tax hikes scheduled to happen at the beginning of the year could trigger another recession. Since that time President Barack Obama and Senate Democrats have refused to act on extension of all current tax rates, which is the position of House Republicans. Instead, they’ve only pushed for one-year extension for individuals making $200,000 and families bringing in $250,000.

But yesterday, the CBO once again stressed that the looming tax hikes could hurt the economy if the stalemate doesn’t end:

In a fresh warning about the so-called “fiscal cliff,” the nonpartisan CBO reiterated that the U.S. economy will go into a recession next year if the Bush-era tax cuts expire and automatic spending cuts take effect. Read the CBO report.

In its latest report, the CBO predicts that the U.S. economy will grow at a 2.1% clip in 2012, but fall by 0.5% between the fourth quarter of 2012 and the fourth quarter of 2013 under the fiscal cliff scenario.

Previously, the CBO said growth would be 0.5% in 2013 under the fiscal cliff. In its new report it said the “underlying strength” of the economy is weaker.
[…]
The CBO said unemployment would jump to around 9% in the second half of 2013 from its current 8.3% if the tax increases and spending cuts play out.

Regulatory Compliance Costs Don’t Always Have a Dollar Figure Attached

Cross-posted from Friction Tape.

Francois Hollande

Recently elected socialist French president François Hollande.

While I’m not sure I always buy whole-hog the amorphous concept of “regulatory uncertainty,” brought on by the administrative state, as a catch-all explanation for everything wrong with the private sector and our nation’s current unemployment crisis, a fascinating Bloomberg Businessweek Global Economics feature from May 2012 looks at French labor policy (emphasis mine):

[France] has 2.4 times as many companies with 49 employees as with 50. What difference does one employee make? Plenty, according to the French labor code. Once a company has at least 50 employees inside France, management must create three worker councils, introduce profit sharing, and submit restructuring plans to the councils if the company decides to fire workers for economic reasons.

French businesspeople often skirt these restraints by creating new companies rather than expanding existing ones.

Hypocrite in Chief

//creativecommons.org/licenses/by-sa/2.0)], via Wikimedia Commons

Cuts to defense and military spending should reflect a principled commitment to reducing wasteful spending, crony capitalism, and the size and scope of the part of the federal government with all the bullets and bombs — it should not be a matter of political convenience.

When congressional leaders sparred over whether or not to raise the debt ceiling last year, the parties agreed that if Congress failed to come up with a deficit reduction plan, automatic triggers would kick in, and would sequester $1.2 trillion in spending across the federal budget (mandatory and discretionary; defense and non-defense). That agreement, which came to fruition almost exactly a year ago to the day, reflected a trade the president made with House Republicans: he gave up demanding revenue increases in exchange for an agreement to include defense spending in sequestration. Speaker of the House John Boehner reluctantly agreed, making sure no triggers would go into effect until January 2, 2013.

The Bain of Obama’s Existence

Barack Obama

With three and a half months to go until the election, the Obama campaign team is becoming more desperate; unsurprising considering Obama is in a statistical dead heat with Mitt Romney despite having so many things going for him (the power of presidential incumbency, the desire of many Americans to see the first black president be successful, the vast majority of the national media solidly in his camp, etc.). Unfortunately for the Obama campaign, the continued bad economic news and a series of unforced verbal errors by Obama has made the going even tougher for Obama.

The latest low for the Obama campaign came recently when Obama surrogate, deputy campaign manager Stephanie Cutter, accused Mitt Romney of being a felon IF he misrepresented his role at Bain Capital while signing SEC (Securities and Exchange Commission) documents subsequent to his departure. This is a cheap political move, meant to plant the seed of corruption in voters’ minds, regardless of whether the claim is true. This particular one has already been debunked repeatedly, but in keeping with the “Big Lie” propaganda technique written of in Hitler’s book, Mein Kampf, the Obama campaign team keeps throwing it out.

From the Washington Post FactChecker website: “We’ve gone over this problem with the Obama campaign before, awarding three Pinocchios to a January memo the team released blaming Romney for job losses and bad deals that took place after the former executive had stopped working for Bain. . . . These facts essentially exonerate Romney from allegations that he was responsible for any outsourcing, bad deals and layoffs that occurred with Bain’s companies in the early 2000s.”

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.

When A Consistent Message Loses

In politics and in business, a consistent message is usually seen as a sign of strength. With the slow trickle of a consistent message, your brand is defined almost imperceptibly by the consumer until your message and brand are linked subconsciously.

When is this a bad idea? When there is inconsistency between your actual product and the “message” you are consistently promoting. You might get away with it for a while, but in time it creates cognitive dissonance in the consumer - they just know something isn’t right.

Case in point — the Obama administration and the jobs reports.  Have those monthly talking points become a little, uh, stale? Sounding familiar? Were you expecting hope and change? Below are excerpts from jobs reports from November 2009 to present:

June 2012: “Therefore, it is important not to read too much into any one monthly report and it is informative to consider each report in the context of other data that are becoming available.” (LINK: http://www.whitehouse.gov/blog/2012/07/06/employment-situation-june)

May 2012: “Therefore, it is important not to read too much into any one monthly report and it is helpful to consider each report in the context of other data that are becoming available.” (LINK: http://www.whitehouse.gov/blog/2012/06/01/employment-situation-may)

Obama: “Private sector is doing fine”

On Friday, President Barack Obama hosted a press conference at the White House to discuss the economy. It wasn’t his finest moment. In his remarks, Obama told the media that all is well in the private-sector, rather it is the public-sector that is holding the economy back. Here’s the relevant quote:

The truth of the matter is that, as I said, we created 4.3 million jobs over the last 27 months, over 800,000 just this year alone. The private sector is doing fine. Where we’re seeing weaknesses in our economy have to do with state and local government. Often times cuts initiated by, you know, Governors or mayors who are not getting the kind of help that they have in the past from the federal government and who don’t have the same kind of flexibility as the federal government in dealing with fewer revenues coming in.

It’s hard to convince many people, particularly those that will be voting in the fall, that the private-sector economy is “doing fine.” People see the news reports about tepid job creation, still high unemployment numbers, and incredibly large budget deficit. They’re no doubt wondering what planet Obama has been living on over the last three-plus years.

The press conference really could be taken as an in-kind contribution to Mitt Romney and the Republican Party. They’ve pounced on the opportunity to slam the gaffe-tastic remarks. Playing right into their hands, Obama later issued a statement emphasizing that the economy is, in fact, not doing all that well:

Conservatives Need To Focus On The Two Scandals That Matter

There have been a lot of silly “scandals” during this election season, which is a usual and normal waste byproduct of the American election process, though this year has been notably intense. Unfortunately, between the “scandals” of Obama having eaten dog while a child in Indonesia, criticism over a flubbed line in Poland, guffaws about him using the word “thingamajig” in a speech, and the resurgent “Birther” nonesense, conservatives and libertarians are losing sight of the real problems with the Obama administration. As I see it, there are two that need to be focused on relentlessly:

  1. The absolutely dismal economic situation, exacerbated by this president’s misguided and foolhardy policies
  2. The utterly atrocious record on civil liberties that President Obama has engendered, a holdover from the Bush administration (so much for “Change”)

Everything else can pretty much be secondary to this or just treated as nonsense. These are the real core problems with the Obama administration, and they are all that conservatives need to hammer him with. Forget the memes, forget the social conservatism, just focus on two things: jobs and civil liberties (which does, in case you’re wondering, tie into foreign policy. A bit.)

The economic problem is fairly straightforward: this is the worst recession since World War II, bar none. From the Calculated Risk blog, this chart shows you how badly:

worst_recession

CBO report shows high-cost per stimulus job

President Barack Obama and Democrat have time and time again repeated the talking point that the $831 billion American Recovery and Reinvestment Act, passed in early 2009, helped save the economy, which was suffering the effects of a severe recession, and helped create jobs.

However, a new report from the Congressional Budget Office (CBO) via James Pethokoukis shows that the stimulus bill was largely wasteful considering its affects on unemployment, with a high cost for what jobs were created:

When [the American Recovery and Reinvestment Act] was being considered, the Congressional Budget Office (CBO) and the staff of the Joint Committee on Taxation estimated that it would increase budget deficits by $787 billion between fiscal years 2009 and 2019. CBO now estimates that the total impact over the 2009–2019 period will amount to about $831 billion.

By CBO’s estimate, close to half of that impact occurred in fiscal year 2010, and more than 90 percent of ARRA’s budgetary impact was realized by the end of March 2012. CBO has estimated the law’s impact on employment and economic output using evidence about the effects of previous similar policies and drawing on various mathematical models that represent the workings of the economy. …

On that basis CBO estimates that ARRA’s policies had the following effects in the first quarter of calendar year 2012 compared with what would have occurred otherwise:

– They raised real (inflation-adjusted) gross domestic product (GDP) by between 0.1 percent and 1.0 percent,

– They lowered the unemployment rate by between 0.1 percentage points and 0.8 percentage points,

 


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