Painfully Sluggish Job Market Recovery

High unemployment is the predictable result of Obama’s economic policies.

The Labor Department’s jobs report for April showed private sector employers added 268,000 jobs, the best month since 2006.  Compared to recent experience this was very good news.  But compared to past economic recovery periods it was unremarkable.

In a TV interview Austan Goolsbee, Chairman of the Obama Administration’s Council of Economic Advisers acknowledged the anemic job market but expressed hope:

I think as we’ve added more than two million jobs in the private sector in the last 14 months, as you see those jobs continue to grow, as you see the unemployment rate come down, I think you will see people feeling better about the circumstance.

Mr. Goolsbee wants us will perceive two million jobs as “a lot.”  This chart puts his his comment in perspective:Like President Reagan, President Obama inherited an economy in crisis.  But Obama came into office vowing to implement policy ideas that were exactly opposite the ideas that inspired the successful Reagan Presidency.

  • Reagan cut income tax rates.  Obama spent his first two years promising to increase tax rates on “the rich,” mostly small business owners and investors.  In December he signed legislation that schedules his tax increase to take effect two months after the 2012 Presidential election
  • Reagan cut “discretionary” spending.  Obama dramatically increased it.
  • Reagan reduced regulation and government intervention in the private sector.  Obama has implemented waves of new regulation and under his leadership Congress passed legislation that will require new regulations of health insurance and virtually every detail of banking and finance – even ATM cards.

The result of ObamaNomics has been a slow, lifeless economic recovery compared to the extended economic boom that followed the recession of the 1980s.

Goolsbee added:

The overall trajectory of the economy has improved dramatically over the past two years, but there will surely be bumps in the road ahead.

This chart tracks one piece of that trajectory, the unemployment rate:

As the chart shows, unemployment was worse during the 1980s recession but the rate came down much more rapidly.  As a result Ronald Reagan was reelected by a landslide, winning 49 states, the largest Electoral College majority in American history.

Even the small drop in the unemployment rate during the past 18 months has been largely due not to job creation but to discouraged job seekers simply dropping out of the labor force.  People who are not actively seeking jobs are not counted as officially “unemployed.”  Reports that employers are finally beginning to hire will draw some of those folks back into the job seeking labor force which will increase the number of “unemployed,” preventing the official unemployment rate from declining as rapidly as it did during the 1980s.

Note also that The Obama Administration – whose defining doctrine is that collective action through government directive is more virtuous and desirable than unsupervised individual liberty – seeks to focus our attention on private sector hiring.  Even though a major goal of Obama’s trillion dollar “stimulus” was preservation of government jobs at all levels, April marked six straight months of layoffs from state and local governments.

 

 

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