This week marks one year since the “stimulus” or Recovery Act, $787 Billion of extra borrowing and spending, was enacted by Congress.  Administration officials and supporters are making the preposterous claim that “every economist” agrees the stimulus created millions of jobs.

It’s time for an objective progress report.

A year ago President Obama orchestrated weeks of government-media hype leading up the the Congressional vote, and promised:

I have moved quickly with my economic team and leaders of both parties on an American Recovery Act that will immediately jumpstart job creation and long term growth.

The headline from last week’s jobs report was that all employers, including both government and private sector, shed 20,000 jobs in January.  What didn’t make the headlines was that the federal government added 19,000 jobs.  So the rest of the economy, actually lost 39,000 jobs.

Since the recovery act was enacted:

• the private sector has lost 3.8 million jobs,
• the federal government has added 113,000 jobs.

The same political-media establishment is now promoting a second round of stimulus borrowing and spending, this time calling it a “jobs bill,” while continuing to threaten small business employers with:

• Punitive tax increases,
• An artificial energy shortage imposed by government in order to increase energy costs
• New taxes on energy production,
• New health care mandates,
• A new federal law that would force unionization upon employers and employees who don’t want union.

The overall evaluation of the stimulus is simple: A bigger, more expensive, more powerful, more interfering government, funded by fewer, poorer taxpayers.

UPDATE: N.O.W. President Terry O’Neill claims the ad is a “celebration of violence against women.”  Here’s the quote:

I am blown away at the celebration of the violence against women in it.  That’s what comes across to me even more strongly than the anti-abortion message.

Well, they did it.  CBS ran the dreaded Tim Tibow Super Bowl commercial, produced by Focus on the Family.  It’s so light, so utterly non-controversial it would not have been noticed by nearly as many viewers were it not for weeks of bellowing from pro-abortion groups

By not allowing anyone to preview the ad, Focus on the Family misdirected the perpetually outraged left.  They all ran the wrong way and made fools of themselves with hysterical warnings of dire consequences if football fans were not shielded from such a dangerous message.

Here are some brief excerpts from a very long, angry letter to CBS from Women’s Media Center (WMC.)

Focus on the Family has waged war on non-traditional families…and is now attempting to use the Super Bowl to further ramp up the vitriolic rhetoric surrounding reproductive rights…CBS is aligning itself with a political stance that will alienate viewers and discourage consumers from supporting its shows and advertisers. The decision to air this ad would be ethically, economically and politically disastrous for CBS.

The content of this ad endangers women’s health, uses sports to divide rather than to unite, and promotes an organization that opposes the equality of Americans.

So, what happened?  Nothing.  The game continued as scheduled.  Football fans didn’t run, screaming into the streets.  CBS will suffer no disaster.  But thanks to shrewd strategy by Focus on the Family, the pro-abortion left has ensured that millions more people noticed and remembered the ad and will go to the Focus website to watch the Tebow video.

On President Reagan’s birthday, consider the closing paragraphs from his Farewell Address:

In the past few days I’ve thought a bit of the “shining city upon a hill.”

I’ve spoken of the shining city all my political life, but I don’t know if I ever quite communicated what I saw when I said it. But in my mind it was a tall proud city built on rocks stronger than oceans, wind-swept, God-blessed, and teeming with people of all kinds living in harmony and peace, a city with free ports that hummed with commerce and creativity, and if there had to be city walls, the walls had doors and the doors were open to anyone with the will and the heart to get here. That’s how I saw it, and see it still.

And how stand the city on this winter night? More prosperous, more secure, and happier than it was eight years ago. But more than that; after two hundred years, two centuries, she still stands strong and true on the granite ridge, and her glow has held steady no matter what storm. And she’s still a beacon, still a magnet for all who must have freedom, for all the pilgrims from all the lost places who are hurtling through the darkness, toward home.

We’ve done our part. And as I walk off into the city streets, a final word to the men and women of the Reagan revolution, the men and women across America who for eight years did the work that brought America back. My friends: We did it. We weren’t just marking time. We made a difference. We made the city stronger. We made the city freer, and we left her in good hands. All in all, not bad, not bad at all.

And so, good-bye, God bless you, and God bless the United States of America.

Video of the entire farewell address

On Ronald Reagan’s 99th birthday, lets remember why he was re-elected in a 49 state landslide, winning the most Electoral College votes in American history.

Compare the results of Reagan’s principled, liberty-based policies with the results of the current chaos in Washington

Yet another disappointing employment report was released Friday – 20,000 jobs lost in January.  The political-media establishment is in full spin mode, assuring us Congress will deliver us from misery with yet another, politically contrived, “jobs bill.”

These charts compare the two worst recessions since the 1930s, and the results of the two, directly opposite responses from Washington.

President Obama inherited a deep recession.  His response has been to:

• Expand the bailout program begun under the Bush administration;
• Enshrine as explicit government policy the theory that some companies are deemed too-big-to-fail and will always be rescued from the consequences of their own failures, especially if their workforce is unionized;
• Enact the stimulus, $787 Billion of extra borrowing and spending, sold with the promise that it would, in Obama’s words “immediately jumpstart job creation;”
• Subsidize blue-sky energy schemes that are too expensive and unreliable to survive in the competitive marketplace;
• Threaten employers with tax increases, hyper-regulation, new health care mandates, and an artificial energy shortage imposed by government.

Like President Obama, President Reagan inherited a deep recession. By some measures it was worse than the current downturn.  Reagan’s economic program, based on his commitment to liberty, was to:

• Reduce regulation and government intervention in the economy;
  
• cut taxes to leave capital in the hands of those who had earned it and were best prepared to invest in job creating enterprises;
• Release the creative and productive energies of The People from the yoke of imperial government.
  

The results, in the second chart, speak for themselves.  After 15 months of job losses Reagan’s policies turned the job market around, passing the previous all-time high in only ten months.

Explosive economic growth continued for a total of 90 months, creating more than 21 million new jobs, a 24% increase in employment.

The Great Communicator

As we celebrate Ronald Reagan’s birthday let’s remember why he was the most popular President in 70 years.

We begin a second post with this Obama quote from the State of the Union message:

We can’t afford another so-called economic “expansion” like the one from the last decade –- what some call the “lost decade” -– where jobs grew more slowly than during any prior expansion…

After presiding over rapidly shrinking employment for the entire first year of his Presidency, Barack Obama is hardly in a position to sneer at the ten million new jobs that were created from 2002 – 2007.

All the data, comparing the previous recession with the current recession is in the post before this one.

But, it’s true that employment grew faster during previous expansions, especially during the Reagan Administration. Like President Obama, President Reagan inherited a deep recession.  But after his first four years, voters were so impressed they reelected Reagan in the largest Electoral College landslide in American history.  President Obama does not appear to be on track for such an outcome.

Perhaps Obama should consider changing his strategy and adopt the successful policies of the Reagan Administration.

After presiding over the loss of 4 million jobs since his “stimulus” was enacted Obama made an astounding assertion in the State of the Union:

We can’t afford another so-called economic “expansion” like the one from the last decade –- what some call the “lost decade” -– where jobs grew more slowly than during any prior expansion…

Considering the catastrophic decline in employment during the first year of Obama’s own administration one would think he should be a bit more humble, and refrain from criticizing a previous period of job growth.

The two charts below compare the current recession with the recession that began 2001.  Each chart shows the total number of Americans who were employed each month.

• In March of 2001, 137.8 million Americans had jobs, the highest number in history.  The 2001 recession, plus the September 11 terrorist attacks caused employment to decline for ten months, to a low of 136.1 million jobs.
• Long term growth in employment resumed in February, 2002.  By June of 2003, the last month in chart 2, total employment had been restored to the previous record high of 137.8 million.
• Employment continued to grow for another 60 months setting a new all time record high of 146.5 million in November, 2007.
• Total growth in employment from the low of January, 2002 to the peak in November of 2007 was 10.4 million jobs.

During the entire six years of employment growth Democrats used the term “jobless recovery” to describe the economy.   They don’t use that term today, even as they claim “the worst is behind us” and “the economy has turned a corner.”

• The current downturn in employment has now continued for 26 months, vs 10 months in 2001-02, and economists predict it will continue for several more months.
• In the current downturn employment has fallen by 8.7 million jobs.
  

Rather than insist “we can’t afford” to increase employment by ten million jobs over the next six years, President Obama should consider changing his strategy from massive increases in government size, power, and debt, to a reduction in government intervention and a round of tax cuts, similar to those enacted by Congress in 2003.  Not only did employment continue to increase until the the end of 2007, tax revenue to the government also increased, to an all time high of $2.6 Trillion in 2008.

Recently, Revenue has fallen, not because of the tax cuts of 2003, but because the recession has driven down taxable incomes and business profits.

At the very minimum, Obama should call upon Congress to cancel the economy-crippling tax increases that are now scheduled to take effect in eleven months.

President Obama tried to portray the so-called stimulus bill as an engine of prosperity.  Remember, the stimulus was sold as the immediate cure to rising unemployment.  Obama promised the jobless rate would rise no higher than 8% if it passed.  Here’s what he said Wednesday night:

Because of the steps we took, there are about two million Americans working right now who would otherwise be unemployed. 200,000 work in construction and clean energy. 300,000 are teachers and other education workers…The plan that has made all of this possible, from the tax cuts to the jobs, is the Recovery Act.  That’s right -– the Recovery Act, also known as the stimulus bill.

Since most of the hype leading up to passage of the Stimulus was about so-called shovel ready projects, one would have expected the construction industry to have received the most immediate benefit.  But one would never know there was any benefit from looking at actual employment results in Construction.

Education employment is also disappointing when compared to Obama’s State of The Union claim.

Politico.com reports that Senator Robert Menendez, chairman of the Democratic Senatorial Campaign Committee has advice for fellow Democrats running for reelection.

Does he want them to promise to resurrect government run health care?  NO!

Does he advise them to promote other programs from the President’s agenda, including:

• big tax increases on small businesses?
• Cap and trade, an artificial energy shortage imposed by government regulation, coupled with a new energy tax?
• new laws that will coerce employers and their employees into union contracts they don’t want?

NO!

Mr. Menendez advises Democrats to try to stir up conflict between Republican candidates and tea party activists.  He urges Democrats to force Republican candidates to publicly answer what he believes will be divisive questions. Here’s an example,

Do you think programs like Social Security and Medicare represent socialism and should never have been created in the first place?

The honest answer is obvious.  Of course they should never have been created.  Not because they “represent socialism,” but because they exceed the authority granted to Congress under the Constitution, because they have proven to be financially unworkable, and because they will cause a lot of misery in the future.

Social Security was sold to the voters of the 1930s with a lie that it was a retirement savings program and there would be a “trust fund.”  Today, most Americans realize there never was any savings, and the trust fund is and always was an accounting fiction.

In reality, Social Security is a payroll tax that collects cash from wage earners and small business owners and immediately pays it out to retirees.  Since 1984 the payroll tax has collected more than was needed to pay retirees.  According to the continuing political lie, the surplus was “borrowed,” from the “trust fund,” and spent on other government expenses.   The so-called trust fund now consists entirely of IOUs, signifying the fiction that the government owes itself about $4.4 Trillion.  Beginning in 2014 payroll tax revenue will be less than benefit payouts and Congress will have to choose either benefit cuts or tax increases because the “trust fund” is worthless.

When the payroll tax began in 1937 it was 2% of the first $3,000 in wages, half paid by the employer and half paid by the employee.  Voters tolerated the new tax because it was small and the promises were big.  Adjusted for inflation, $3,000 would be about $45,000 today.  At 2%, today’s Social Security payroll tax on $45,000 would be $450 each on employer and employee, for the whole year.

But after a dozen tax rate increases, the tax on a $45,000 salary is now $2,800 each, on employer and employee.  By the way, $2,800 dos not include the additional payroll taxes that were added to fund Medicare and SSI.  Those add-ons raise the total to $3,442 each on employer and employee.  Even after all those increases the current tax rate is not nearly enough to fund baby boomer retirement benefits.  Government has done nothing to prepare for the boomers even though the benefits have been promised and scheduled for 50 – 64 years.

Republican candidates should demonstrate honesty by openly stating what most voters already know, that Social Security is looming train wreck.   There will be no clever, painless, political adjustment that keeps everyone happy.  The only responsible course of action is to gradually phase out this dishonest program.  A phase-out will entail a lot of pain, but it has to be done.  Social Security is simply unsustainable.

Mendenez and the Democrats seem to think voters will, as they did in the past, turn against a candidate who is honest about the looming, painful, Social Security/Medicare crisis.  But in 2010 we’ve embarked on a new era when voters are loath to trust Utopian promises from the Left, including the usual promise to sustain Social Security without causing any pain, except maybe to “the rich.”  Voters in Massachusetts elected Scott Brown who vowed, unconditionally, to kill ObamaCare even though the President and the Democrats had promised it would improve medical care and lower costs for everyone.

If the Republicans nominate strong honest candidates, 2010 will be remembered as the beginning of a new era when brutal honesty became the winning political strategy in America

Speaking of his dream of government run health care President Obama bellowed to a town hall meeting today:

There are things that have to be done.  We can not keep putting this off.

But back in Washington the Political-media establishment was obviously exhausted from  a year of exertions and produced no support  for the President.

Nancy Pelosi finally admitted, grudgingly:

I don’t see the votes for it at this time.

Pollster Scott Rasmussen released his findings that 61% of likely voters agreed with the statement:

“Congress should drop health care reform and focus on more immediate ways to improve the economy and create jobs.”

Democrat Senator Bob Casey was ready to kick the pre-election damage control effort into high gear:

I don’t think we have to wait for health care to be resolved one way or the other before we move to jobs. We need to put a jobs bill on the table very soon, certainly in the next few weeks.

Since Democrats prove daily they have no idea how jobs are created we can be sure any “jobs bill” they come up with will be counter-productive.

Pride will prevent anyone from pronouncing the effort dead.  But it is.  It died in Massachusetts on Tuesday.

The reverberations from the election of Senator Scott Brown continue.

Yesterday Speaker Nancy Pelosi admitted she did not have enough votes to pass the Senate version of ObamaCare.  While some die-hards in Congress continue to insist they will enact ObamaCare soon, the political momentum has turned against it, and it is probably dead.

In fact, it appears that President Obama’s agenda has changed, virtually overnight.  He is now focused on political survival for himself and the Democrats.  He hopes to avoid being the designated scapegoat of the inevitable recriminations by “pivoting” the focus of his permanent campaign from health care to jobs.  His big event for today was yet another speech and and yet another town hall in Ohio, billed in advance as being “about jobs and the economy.”

Why Ohio?  Obama won Ohio’s electoral votes in 2008 and it’s probably impossible for him to win re-election to a second term without Ohio.  On election day, 2008 Ohioans were anxious about the local economy because unemployment in that state had risen to 7.1% from 5.7% a year earlier, and they believed Obama’s promised “change” would turn that around.  But today, unemployment in Ohio stands at a whopping 10.9% – not the “change” Ohio voters had hoped for.  Obama will try to reposition himself in the mind of the voter,  from health care socialist to job creating technocrat.

He did defend his health care initiative and promised not to let “the special interests” kill it.  He blamed everyone and everything except the bad ideas in the legislation for it’s imminent failure. He promised to

…keep on fighting for real health insurance reform.

Unfortunately for the President, Democrats in Congress are giving up the fight.  Even Nancy Pelosi, the most driven proponent of the government take-over acknowledged lack of enough votes.

We have to give Obama credit for maximum chutzpah, as he claimed his so-called “recovery act” (formerly called the stimulus) was a success that somehow turned the economy around.

Ohioans in the audience should remember the extravagant promises the President made in hyping his recovery act, $787 Billion of borrowing and spending, rammed through Congress on day 24 of his Presidency.

Obama’s own words were:

I have moved quickly to work with my economic team and leaders of both parties on an American Recovery Act that will immediately jumpstart job creation and long term growth.

Regardless of his claims, the recovery act is a tragic failure.

The Bottom Line

Government can help create more jobs by shrinking.  It can reduce taxes and the horrendously complex network of regulations that hobbles employers.  Obama and the Democrats can stop threatening higher taxes, cap and trade, forced unionization, and new health care mandates Greater liberty, not greater government power over the private sector will result in more jobs and greater prosperity