The White House and congressional Democrats have a very strong reason to fear the “Grim Reaper” of the 2010 midterm elections: We are mired in a jobless recovery in which the unemployment rate will remain close to 10% this year and possibly into 2011.
When other factors are added to the Labor Department’s monthly payroll survey, the effective unemployment rate is much larger still, approaching nearly 20%.
America has been envied the world over for many attributes, but none more than its ability to create an endless supply of jobs for its citizens and the immigrants who flock to the Land of Opportunity to start a new life and new enterprises of their own.
But a year and a half into Barack Obama’s presidency and the Democrat-controlled Congress, America’s appears to have lost its ability to create the millions of jobs that will be needed to keep pace with the yearly flood of new job-seekers entering the workforce.
The reason, economists and other critics say, is the administration’s anti-capitalist, anti-free enterprise, anti-free market policies that are impeding investment and venture capital formation, punishing U.S. businesses with higher taxes and new mandates like Obamacare, cap-and-trade energy fees and draconian financial regulations coupled with threats to let the Bush tax cuts expire that are already having a preemptive job-killing effect on payrolls and economic growth.
“The administration’s policies have seriously impaired the economy’s normal capacity to create jobs,” Stanford University economist John Cogan, a critic of Obama’s economic policies, told HUMAN EVENTS.
“Specifically, the healthcare law’s mandates are already raising the cost of health insurance premium quotes for next year and, as a consequence, it’s raising the prospective cost of hiring new employees. The healthcare bill’s taxes have hurt the normally recession-proof pharmaceutical and medical device companies,” too, Cogan said.
“The massive budget deficits have created the prospect of large tax increases next year, which have put a damper on hiring in all private economic sectors,” he said.
The latest evidence of the private sector’s hiring pullback was seen in last month’s Labor Department jobs survey which showed that only 41,000 private-sector jobs were created by businesses in May—an astonishingly weak number that sent the stock market into a steep dive, rattled global markets and triggered fears the U.S. economy could fall back into another recession.
“The bottom line is that American workers are paying a hefty price for the anti-free-market policies being pursued by the current administration,”
Cogan told me.
The indisputable reality is that 15 million Americans cannot find a job and nearly nine million workers are forced to work part-time (quaintly referred to as involuntary part-time workers). Another 2.2 million said they were available for work but had not looked for employment for the past four weeks. Many more discouraged workers, up by nearly 300,000 over the past year, have stopped looking for work because they believed there were no jobs for them.
The Bureau of Labor Statistics reported that 431,000 jobs were created in May, but most were low-paying, temporary census-taking jobs that will disappear in a few months.
Indeed, surveys show that Obama’s nearly $800 billion economic stimulus bill—which has since grown to over $1 trillion—has led to an expansion of government jobs, but relatively few new jobs in the private sector which accounts for most of the jobs in our country.
“Gallup’s Job Creation Index for April reveals significantly more hiring within the federal government than in the private sector,” the longtime polling organization reported earlier this month.
“Private-sector employment was essentially flat,” economic policy strategist Cesar Conda told HUMAN EVENTS. “Most disturbingly, the percentage of long-term unemployed remained at a record-high 46% in May. The Democrats’ policies of higher tax rates, increased deficit spending and heavy regulatory mandates are slowing the economic recovery.”
This is why many more economists have not only concluded that Obamanomics isn’t working, but are also forecasting that it isn’t going to work.
“Generally, the outlook is for mediocre growth—a tad less than 3%—and unemployment not to improve much,” says economist Peter Morici of the University of Maryland.
“Unemployment will peak this quarter or next close to 10%, then decline only gradually,” Morici forecasts in his latest economic analysis.
President Obama, his job-approval polls falling into the 40s, has been visiting factories around the country, telling voters that his big-spending stimulus policies are working and that they have turned the economy around.
But try telling that to unemployed workers in those states and regions where unemployment is up in the high double digits.
When Obama told workers at a manufacturing company in Buffalo that “we are heading in the right direction,” few believed him.
He was greeted by a huge billboard in downtown Buffalo that read: “Dear Mr. President, I need a freaking job. Period.”
A Marist College poll conducted on the eve of his visit found that 57% of upstate New Yorkers said the economy in their area was getting worse. Only 11% said things were improving.
Outside of the monthly Labor Department jobs report, the national news media, particularly the network news shows, have given the jobs catastrophe short-shrift or ignored it altogether. And when they do cover the story, it is reported solely within the context of the overall economy, not Obama’s failed stimulus policies.
But the bleak economic and political reality is that half the states have unemployment rates of between 9% and 14%. A disproportionate number of them are battlegrounds in the midterm elections where vulnerable Democratic governorships and House and Senate seats hang in the balance.
In Nevada, for example, where Senate Democratic Leader Harry Reid is badly trailing in the polls, the jobless rate is 13.7%.
In California, where Sen. Barbara Boxer is looking more and more vulnerable, unemployment is 12.6%.
In Michigan, it’s 14%, Illinois, 11.2%, Ohio, 10.9%, and Pennsylvania and Delaware, 9%.
In each of these states, as in others, the gloomy unemployment picture is far and away the issue that will likely determine the outcome of the November elections.
And worldly wise economists such as Cogan and Morici do not see the bleak jobs picture dramatically improving anytime soon.