Has Liberty or Political Power Created More Jobs?

The political-media establishment bubbled with optimism last Friday.  The monthly report from the Labor Department said employers reported 162 thousand new jobs in March.  White House Economist Christina Romer called the monthly jobs report “continued signs of gradual labor market healing.” President Obama said the economy had turned the corner and the worst was behind us.

Hopefully the the worst is behind us.  But genuine prosperity is not likely in the face of relentless economic battering from the political establishment.

To put this one month jobs report in perspective, these charts compare the two worst recessions since the 1930s, and the results of  two, directly opposite responses from Washington.

It turns out that a third of the new jobs added in March were temporary, census workers hired by the government.

Thirteen months ago 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 and financial institutions are deemed too-big-to-fail and will always be rescued from the consequences of their own negligence, especially if their workforce is unionized;
• Enact the stimulus, now 14 months old and nearly $900 Billion in extra borrowing and spending, hyped 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;
• Schedule massive tax increases on small businesses and investors to begin in 2011;
  
• 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 as he took office in 1981. By some measures it was worse than the current downturn.  Reagan’s economic program, based on his commitment to liberty, was the opposite of Obama’s:

• 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 equipped to invest in job creating enterprises;
• Release the creative and productive energies of The People from the yoke of imperial government.
  

The upper chart shows the job market has just begun a tentative, anemic recovery after 27 months of Bush/Obama policies.  There are 8 million fewer Americans now employed than in December, 2007.

The results, in the lower chart, speak for themselves.  Reagan’s policies turned the job market around after 17 months of losses. The Reagan economy grew continuously for 90 months, creating a total of 21 million new jobs, or a 24% increase in the number of Americans who were employed.