Like a medieval “doctor” telling an ignorant patient that his
recovery was due to being bled by leeches, Barack Obama’s claims
that our recent modest economic improvements flow from his economic
policies aren’t — and shouldn’t be — fooling anyone (except
perhaps reporters and other Democrats).
On Friday morning, the Department of Labor released the
March employment
data showing a gain in nonfarm payrolls of 216,000
jobs, and an unemployment rate of 8.8%, down 0.1% from February and
down 1% since November.
N.Y. Times reporter Jackie Calmes,
no partisan she, offered
this hopeful analysis: “[A]s the unemployment rate
ticked down, the hopes of Mr. Obama and his party ticked up:
perhaps by the approaching election year they could claim
vindication for the stimulus policies Democrats have enacted, or at
least dodge the sort of blame that Republicans so effectively stuck
them with last November in the midterm elections.”
Ms. Calmes’ NYT colleague Michael Powell
gave a more balanced discussion, noting that
although “March was the 12th consecutive month of private sector
job growth… [the] numbers also offered more than a few cautionary
signs that the national economy was not cured of all its
ills.”
Indeed job growth coming out of this recession is taking
far longer and recovering much more slowly than in prior
recessions, bad news for a nation that has suffered far worse job
loss than at any time since the Great Depression. (See this
chart from Calculated Risk Economics for a
“picture worth 1000 words” representation of the data.)
Nevertheless, the Obama Administration is trying to use
Friday’s report to its political advantage. Indeed, Ms. Calmes’
article was entitled “Job growth alters playbook for Obama and his
Critics,” though there is no evidence that Obama’s critics or
political opponents — or even American citizens more broadly —
give Obama credit for any improvement in our economy.
And why should they? Obama famously promised, based on the
report by his former chief economic advisor, Christina Romer, that
if the “stimulus” were passed, unemployment would stay below 8%.
Instead, it hit 10%. Furthermore, the number of unemployed
Americans remained almost constant around 15 million people, and
the unemployment rate fairly constant between 9.5% and 10.1% from
June 2009 until (wait for it!) December. What was December? It was
the first month after the election in which Republicans won back
control of the House and made solid gains in the Senate, setting up
a likely Republican majority in that body after the next election.
And perhaps more importantly, it was the month in which that new
Republican majority compelled Barack Obama to agree to extend the
Bush Tax Cuts.
In other words, essentially all of the improvement in
employment conditions occurred once employers knew that the
Democrat radicals led by Nancy Pelosi, Harry Reid, and Barack Obama
would no longer be capable of to shoving their Keynesian
econo-nonsense and hyper-regulation down our throats, at least not
through legislation.
But President Obama is oblivious to what the rest of the
nation (except Democrats) sees. Speaking at a United Parcel Service
facility on Friday (UPS is unionized while FedEx isn’t…), the
president warned that a government shutdown over the size of
federal budget cuts would be “the height of irresponsibility” and
that a shutdown would “halt our economic momentum because of the
same old Washington politics.”
Beyond the fact that arguing over whether to cut
government spending by $30 billion or $60 billion (or even $100
billion) is hardly the same old politics, Americans recognize and
the data show that the American people believe Republican plans to
cut spending are good for the economy and good for
business.
It’s not just the backward-looking employment data that
bear this out. A
Rasmussen Reports poll also released Friday
shows that “57% of Likely U.S. Voters think making deeper spending
cuts in the federal budget for 2011 is more important than avoiding
a partial government shutdown. Thirty-one percent (31%) disagree
and say avoiding a shutdown is more important.” Not surprisingly,
54% of Democrats want to avoid a shutdown while 76% of Republicans
think deeper spending cuts are the priority. The point of the
political spear, however, is the all-important unaffiliated vote,
of which a remarkable 67% also prioritize spending cuts over
avoiding a federal government shutdown.
Similarly, while 69% of Democrats would keep funding the
government at current levels until a spending agreement can be made
among members of Congress, “74% of GOP voters and 70% of
unaffiliateds would rather have a shutdown until an agreement on
deeper cuts can be reached.”
Members of the Obama Administration are drinking their own
Kool-Aid. Secretary of Labor Hilda Solis asserts that “the policies
and programs of this Administration are working.” Indeed they are,
in the way that a leech works on a patient; the patient improves in
spite of, and not because of, the treatment.
But that’s just their red Kool-Aid; we can’t forget about
their green Kool-Aid, which was also on offer on Friday as both
Obama and Solis touted the Administration’s “green energy”
obsession. According to the president, “But we have to keep up the
momentum, and transitioning to a clean energy economy will help us
do that.” And according to Solis, “The growth of the clean energy
economy will bring significant changes to the American workplace
and require workers to acquire new and different skills.” Anyone
catch that “require” bit? Since when has government requiring
millions of people to “acquire” skills or anything else helped do
anything but swell the ranks of government bureaucrats?
If there’s one thing you can count on “Progressives” for,
it’s to ignore the lessons of history, even very recent history,
with their belief that any big-government plan that goes wrong was
simply due to its not being big enough or implemented by smart
enough people. Nevertheless, a few European examples of “green
jobs” are instructive.
A 2009
study of the “green energy” industry in Spain —
an industry that can only survive with massive government
subsidies, meaning taxes on the rest of us — concluded that “the
U.S. should expect a loss of at least 2.2 jobs on average (per
“green job” created), or about 9 jobs lost for every 4 created, to
which we have to add those jobs that non-subsidized investments
with the same resources would have created.”
Other highlights of the Spanish study:
• Since 2000 (and until the recent economic collapse),
Spain spent over $800,000 for each “green job” created, including
subsidies of more than $1.4 million per wind industry
job.
• Each “green” megawatt installed destroys 5.28 jobs
on average elsewhere in the economy; solar power has been
particularly destructive.
• 90% of jobs created were temporary.
• Subsidies to green energy consumed about 3.5% of
all personal income taxes collected.
In November and December, Spain announced massive cuts in
solar and wind project subsidies even though a government minister
recently said that Spain wants to double its renewable energy
output over the next decade. It will be interesting to see whether
its green Kool-Aid daydreams triumph over the economic
reality.
According to Bloomberg, last year, in
Spain’s convoluted power payment system, where existing energy
producers directly fund the subsidies to renewable energy, “the
power system’s payment obligations exceeded its income by more than
4.6 billion euros ($6.5 billion).”
France has cut back on solar projects for the foreseeable
future and Italy is slashing its efforts in both wind and solar
power.
South Africa is also looking to cut solar
subsidies. And England is cutting the taxes on energy companies
that have been used to subsidize solar projects.
Portugal, another European economic basket case, has also
been on the “green energy” bandwagon. Though it has some advantage
in its access to hydropower, CNN reports that “Being the third
largest producer of renewable energy in Europe has meant a jump in
costs — 15 percent - to household consumers of electricity in the
last 10 years.”
Meanwhile the Netherlands, historically perhaps the most
financially savvy European nation, is, according
to press reports, “in a radical change of policy…
reducing its targets for renewable energy and slashing the
subsidies for wind and solar power [because] wind and solar
subsidies are too expensive.”
And this is where Obama thinks the economic Holy Grail
lies?
The danger for the U.S. economy lies in the Administration
using executive agencies like the EPA to force economic changes it
knows could never pass through Congress as legislation. It may only
be a danger for two more years, but with enough determined enviros
and socialists in positions of power and focused on the energy
sector with a pathological hatred of fossil fuels, much damage can
be done before the next president is sworn in. (And if Obama wins a
second term, all bets on the future of America’s domestic energy
production are off.)
In terms of politics, the key is not whether or not the
recent uptick in employment is good news for the Obama
Administration. While it is certainly better it than a growing
unemployment rate, the critical point is that the Administration
believes that the public will give it credit for the modestly
improving situation. It is misjudging the public here just as it
has with every major economic policy initiative since Obama took
office.
The economy, even an improving economy, is Barack Obama’s
Achilles heel; his claiming otherwise can only fool people if
free-market citizens, politicians, and economists let him get away
with it.
Congressional Republicans must remind the voting public
over and over that the recent turn for the better in job creation
occurred immediately following the November election. They must
repeat, early and often, the value of the extension of the Bush Tax
Cuts which the Democrats, in what may turn out to be very bad
strategery on their part, agreed to let expire in two years and
thus become a political issue again going into the 2012 elections.
Republicans must not allow Obama to take credit for employment
gains when his only impact has been the economic equivalent of
putting a dozen leeches on a gravely ill patient who, fortunately,
got better in spite of such quackery. And We the People must make
the many vulnerable Democrats in the House and Senate understand
that any move by the Administration, even if through regulatory
channels nominally out of their control, to “require” Americans to
pay more for heating and driving will be held against them with
extreme electoral prejudice.
