If you’ve heard a campaign speech by President Obama or Vice President Biden or you’ve heard their cheer leaders in the media, you’re familiar with the one employment statistic they bellow at every opportunity:
Over the last thirty months we’ve created 4.6 million private sector jobs!
They hope voters will think 4.6 million, the net increase in the number of private sector jobs since March 2010 sounds like a big number, and a sign of significant progress. [continued below the chart]
Why do they start counting jobs in March 2010, the 14th month of the Obama Administration? Because, that was the first month without a net job loss. Why do they count only private sector jobs when Obama believes government rather than the private sector is the source of prosperity and well being? Because state and local governments laid off employees during each of those thirty months, in spite of Obama’s huge “stimulus” that he promised would preserve government jobs.
Consider the data in the chart above. Since World War II there have been nine recessionary periods of job loss, followed by nine recoveries. The above chart tracks them all the same way the Obama campaign tracks the current recovery, for thirty months, starting with the first month of net positive job growth. As the chart shows the current recovery ranks ninth out of nine. It even falls a bit short of President Bush’s job growth that was at the time termed a “jobless recovery” by most of the political-media establishment.
In those same campaign speeches, President Obama criticizes President Bush for not reacting when job losses began in 2008. Obama now says that he took decisive action in 2009, the second year of job losses to “create or save jobs” with major spending programs. His claim begs the question, were there huge spending increases in the second year of previous periods of job losses? Is a spike in spending a proven job creation strategy?
It turns out that Obama’s second year spending increase was greater – a lot greater – than the second year spending increase during any of the eight previous recessionary job loss periods. In fact, the 1949-52 period showed the largest job growth with no second year spending increase at all! (there was actually a small decrease, too small to show up on the chart.)
The obvious question is what have Obama and the Democrats bought with their tsunami of new spending and reckless escalation of government debt? It appears from the chart that additional “stimulus” spending does not correlate with exceptional job growth. In fact the data shows the largest spike in spending coincides with the weakest job growth.
President Obama, like most of the political-media establishment is devoted to the Keynesian economic theory he cited in 2009 to argue that a massive increase in debt financed government spending would prevent job losses and, in his words “jumpstart job creation and long term growth.” But a review of history simply does not support Keynesian theories. As the data displayed in the charts shows, there was no historical experience Obama could have cited to demonstrate that Keynesian theory was valid.
But he went ahead with what was by far the largest Keynesian experiment ever. If anything, his ruinously expensive experiment has demonstrated that more spending correlates with fewer jobs.