The latest jobs report was another disappointment. In July:
- Employers created 163,000 jobs in July, a welcome improvement over April, May and June, but still not nearly enough to both replace jobs lost in 2008 and 2009 and keep up with population growth.
- The unemployment rate ticked up from 8.2% to 8.3%. (Late in the day the White House announced that the rate was actually “8.254%”.)
- If the average growth rate for 2012 continues it will take until 2018 to finish replacing the jobs that were lost in 2008 and 2009.
Speaking at a campaign event President Obama hyped private sector, job growth of 4.5 million over the past 29 months. He hopes voters will perceive that to be a big number. But in reality we’re enduring the worst post-recession, private sector job market recovery since the government began monthly surveys of employers in 1939. To put today’s statistics in perspective the chart compares all post recession, private sector job growth periods since 1960.
President Obama focuses on private sector jobs because state and local government jobs have declined every month for two years, in spite of his promise that his nearly trillion dollar stimulus program would preserve them.
Obama supporters reviewing the data displayed in this chart might argue that things aren’t any worse now than they were during the Bush era, 2003-2005. But that would be an erroneous argument. Job losses weren’t nearly as severe during the 2001-2003 recession so there were 6 million fewer lost jobs to replace. At this point in the recovery of 2003-05 the unemployment rate was 4.9%.
As the chart shows the Reagan era recovery was by far the most robust of the past five decades. 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. The unemployment rate was higher and mortgage interest rates soared above 15%, driving down home prices. Reagan’s economic program, based on his commitment to liberty, was the opposite of Obama’s:
- Reduce regulation and government intervention in the economy;
- Enact sweeping tax cuts that were phased in over three years, beginning 1982. Each of the 16 income tax bracket rates were reduced by at least 25%. The top bracket rate was cut from 70% to 50%, and then to 28%. Tax cuts left 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 restraints of government regulation.