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The Spectacle Blog

Obamanomics Continues to Damage the Economy

By Ross Kaminsky on 7.8.11 @ 10:45AM

This morning, the Labor Department released the worst employment report since September of last year, with the economy creating only 18,000 jobs in June versus a Marketwatch consensus estimate of 125,000 jobs. (Yahoo Finance and Bloomberg had slightly lower estimates, but the report was a disaster by any measure.)

Private sector job growth also came in far below expectations at 57,000 net new jobs in June.

As if that weren't bad enough, both April and May employment numbers were revised lower, down a combined 44,000 jobs.

The unemployment rate moved up to 9.2 percent. The broader "U-6" measure of unemployment and underemployment spiked up to 16.2 percent, the highest level this year.

The rest of the report was bad as well: Hourly earnings were unchanged, with predictions of up 0.1-0.2 percent. The average workweek fell to 34.3 hours, below the estimate of 34.4 hours.

Fed Funds futures rose dramatically in the "back months" suggesting that the market is substantially lowering the probability of an interest rate increase by the Federal Reserve anytime this year.

If one can see a bright side to all this, it's that government at all levels shed a net 39,000 jobs in the month. I realize it's no fun for those government employees who thought of themselves just as men and women doing a job. And while many government workers perform important and legitimate functions, government is notorious for lack of productivity. At the end of the day these people are paid by taking money from the rest of us. So just as the nation won't be healthy until Washington, D.C. is no longer the strongest real estate market in the country, we also won't be healthy until the total number and cost of government jobs falls to, and remains at, a substantially lower level.

After an hour of trading, the Dow Jones Industrial Average was down 135 points with the S&P 500 down 17 points.

Barack Obama's economic advisor Austan Goolsbee called the report a "call to action" and then laid out several policy suggestions (more below). Goolsbee then blamed the economic slowdown on a "terrible oil price shock and a slowdown in the growth rate".

The problem for the Obama Administration is they they're to blame for both.

Releasing oil from the Strategic Petroleum Reserve showed Obama's economic ignorance and desperation. In fact, despite a 2% drop in oil prices on today's weak report, oil is still almost $3 per barrel higher than when that policy was announced. Oil prices are driven by big-picture supply and demand. As long as the Obama Administration is a barrier to creating new supply, the path of least resistance for oil prices is upwards. As for the slowdown in growth, that was just an odd comment, basically saying that the economic slowdown was due to the fact that economic growth slowed. Not much I can add to such wisdom except to say that the Administration's economic policies are obviously failing.

CNBC reporters asked Goolsbee twice whether the Obama Administration has any culpability. Goolsbee eventually said "Yes, we take responsibility." That's a start...and perhaps this kind of semi-honest talk will get the last victims of Bush Derangement Syndrome to recognize that this economy is no longer George W. Bush's fault or problem.

Goolsbee called for these five policy actions:

1) Extend the payroll tax cut

2) Pass free trade agreements

3) Create an infrastructure bank

4) Pass a patent reform bill

5) Pass balanced bipartisan deficit reduction agreement

He claimed these "would create hundreds of thousands of jobs if not millions".

Let's take these on:

1) Businessmen are not fooled into changing behavior by temporary government policies. Furthermore, the Administration displayed their usual economic ignorance by giving the tax break only on the employee side of the ledger. If they had to choose just one side to give a break to with a view toward creating jobs, it should have been the employer. That said, temporary policies simply don't have important economic impact because the rest of us know we don't live temporary lives.

2) Passing free trade agreements is a very good idea, though its impact would take some time. Furthermore, the Democrats tend to try to use these agreements to create new entitlement programs such as "job retraining" which end up lessening the benefit of the bills. Still, free trade is one of the most important things for a vibrant economy.

3) Does anybody but a White House employee think that we need the government to set up a "bank" of any sort? Furthermore, if infrastructure were so important, why did they do so little of it with the nearly $1 trillion "stimulus" plan, during which we heard so much about "shovel-ready projects" only to be told last month by President Obama that "shovel-ready was not as shovel-ready as we expected." The "infrastructure bank" is simply the Administration's latest scheme to divert taxpayer money to their increasingly disaffected union base. A perfect example comes with a union suggestion that if the legislation were to pass, it should require project oversight and inspection to be done by government workers (also likely to be union members) rather than by private contractors (who actually care about productivity.)

4) Patent reform is a good idea, though again this is a much longer-term impact and not going to create jobs in the next several months

5) Obviously, reducing our debt and deficit is critical, in particular because of the confidence (or lack thereof) which the eventual deal will instill in American entrepreneurs. If the legislation ends up being based on bogus assertions of revenue assumptions from class-warfare talking points, the markets and job creators won't be fooled. We simply must address the growth of entitlement programs' costs.

And Goolsbee missed one of the most important aspects -- because his boss doesn't want to go down this road: The private sector is massively over-regulated and fears becoming even more so. Dodd-Frank and Obamacare are just the latest, piling on the mess of Sarbanes-Oxley and the increasingly burdensome regulatory state. The use of the EPA, Department of the Interior, and Department of Labor to enforce rules which Obama couldn't get passed in Congress smacks of anti-business petty tyranny. Reducing debt and deficit is important, but reducing regulation -- and the threat of further regulation -- is just as important.

The June employment report is indeed a "call to action", namely to stop naively believing in Obamanomics and to start contributing to political candidates who promise to support repeal of much of this Administration's economic poison while we still have a patient to save.

l5j6| 7.8.11 @ 10:57AM

When you have too few jobs and thus too many people, one reasonable solution is to reduce the rate of growth on the population. Our population growth is almost entirely made up of immigrants (legal and illegal).

Q. Why does no major political leader or commentator EVEN MENTION, reducing the rate of immigration inflows?

A. Because they are afraid to be labled RACIST, since most immigrants coming to the USA for the past 30 years, are not Caucasian.

The Beltway class and the Commentariat class are both blinded by political correctness and the self-surving growth of a political constituency (in the case of politicians), all to willing to vote for said politicians.

Lower immigration for the next ten years, at least. I'm not saying stop all immigration but surely we can reduce it by half for at least the next several years. The country will not fade away by accepting fewer immigrants. Only the ethnic hustling lobbies, lawyers and activists will suffer. Good.

JP| 7.8.11 @ 11:50AM

Your points would make more sense if this was 2006 and not 2011. Over 6 million illegals returned to Mexico and points South since 2008. And the 2010 Census indicated that the rate of population growth in the US is slowing considerably. The years 2001-2010 saw the slowest rate of population growth since 1930. This slowing of our growth rates occured despite the substantial increase in the Hispanic demographic (Hispanics now make up 24% of our population, and 50% of newborns are now Hispanic). The TFR (Total Fertility Rate) for both Caucasian and Blacks are below 2.0 children per female (they average about 1.7); the TFR for first generation Hispanics is above 3.5 children per female. But, it drops below 1.8 for second generation Hispanics. What the data does show us, is that without Hispanics (legal or otherwise), the US would more than likely have had little growth population wise.

One other thing to look at is the distribution of Hispanics. They live in both high growth states (Texas), and low ones (Illinois, California, and Arizona and New York). The collapse of the housing and construction industries hurt them especially.

One last thing to consider is the surge in Hispanic immigration was a by-product of demgraphic momentuem of the late 60s and 70s. Mexico had a TFR of 6.0 in 1970; but it has fallen to just above 2.5 today. Central and South America mirrors Mexico's demographics. What this means is that there will be far fewer people living South of the US in coming decades -especially young people. Immigration to the US circa 1990-2007 peaked. If anything, we will begin to far fewer Hispanics immigrate here in the future when compared to earlier generations. And later generations of Hispanics (2nd and 3rd) have far fewer children than thier parents and grandparents.

l5j6| 7.8.11 @ 12:21PM

Rubbish........just blah, blah, blah, statistics. US population is soaring and has been soaring for years, driven mostly by immigration (of all flavors).

Legal immigration needs to be reduced considerably and illegal immigrants need to go home - just start enforcing immigration law and most will get scared and go home. But the bigger issue is LEGAL immigration, where legal immigrants sponsor 20 of their relatives and each relative in turn, can sponsor many other relatives. Chain migration. It needs to stop.

denise| 7.8.11 @ 6:11PM

We need to change some things, just because a baby is born here, it should not be considered America,unless one of it's parents are proven LEGALLY AMERICAN.

Ross Kaminsky| 7.8.11 @ 12:32PM

This is economic nonsense. This country needs more immigration rather than less. Our population is not having enough children to cause our economy to grow into the future. Look at the economic problems that many European countries face due to low birth rates and low immigration. Furthermore, for those of you who don't want Hispanic immigrants, just think about France which now has 10% of its population being Muslim.

China, with its "one child" policy for years and slowing birth rate now, will get old before it gets rich.

Legal immigration is a huge net economic benefit to society. Arguments like yours are not just wrong, they're dangerous.

buckeyeman| 7.8.11 @ 2:23PM

Ross,
We won WWII with a population of 14o million. When I graduated from high school in 1968 the population of the US was up to about 200 million. It is now over 300 million. Farmland has been eaten up by housing developments. Freeways are more congested. New freeways have been added but that has eaten up more farmland. Water supplies are stressed in proportion to the population. Pollution is increased at lease partially in proportion to the population. Resources are utilized at least partly in proportion to the population.

Please explain (without insulting me, if possible) how our nation is inherently better off than it was when the population was 100 million lower. I recall the 1960's quite well. We had electricity, running water, and prosperity.

If the entire world population were cut in half how would that worsen the stresses on natural resources? If the worldwide population explosion were curbed wouldn't that be better for all?

I hear this talk about "growing the economy" all the time and I don't understand it. It smacks of all the Ponzi scheme talk politicians use to justify the promises they made to bribe the electorate. Most of the world's population lives in abject poverty and contributes nothing to the advancement of the human race while using up resources and dreaming of a petroleum powered personal transportation vehicle.

I'm not talking about extermination of living human beings, but lets have a rational discussion about population, both in the US and in the world. Our problem, IMHO, is not insufficient population, but an excess portion of the population that lives off the productivity of others. Immigration, legal or not, has exacerbated the welfare state and is progressively degrading our culture. If valuing traditional American CULTURE makes me a racist then so be it.

France? I spent the entire month of June living in a country house just south of Blois. A three day side trip to Paris was all the tutelage I needed regarding the Muslim invasion of France (and most of the rest of Europe, for that matter) How does the destruction of the French and European cultures and economies advance your argument? You can adopt the Roman philosophy that only slaves (foreigners) should do menial labor, but we know how that turned out. Bread and circuses for Roman citizens and a gradual and catastrophic dilution and degradation (in every sense) of Roman culture.

China???? You are seriously going to use China as an argument AGAINST overpopulation? China's economy stinks because of COMMUNISM, not because of insufficient population. To the extent China is recovering from its horrid past, the adoption of CAPITALISM is the reason. But capitalism (freedom) does not mean any number of people who wish are "free" to come to live in my house (or, by extension, my country).

I sincerely believe immigration is one of many factors destroying our country. You're a smart guy. Give a better reason to change our minds than name calling.

Ross Kaminsky| 7.8.11 @ 2:55PM

Buckeyeman,

I don't have time right now to give your comment the detailed response it deserves. I will write up something for my web site at http://rossputin.com and try to get it posted at the AmSpec blog as well, though I don't have much control over that. Do me a favor and check out my site next Monday or Tuesday for my response to you.

buckeyeman| 7.8.11 @ 3:40PM

OK, Thanks.

JP| 7.9.11 @ 10:47AM

Buckeye,
Name one nation that had a growing economy with an aging shrinking population? Japan has both. Check them out. Japan is undergoing delfation. In the short term this may sound great. Consumers reap the benefits of falling prices (again, in the short term). But, businesses have ever falling profit margins, and must continuously cut prices in order attract an diminishing customer base. Smaller and mid-size biz will simply close thier doors or be bought out by larger international firms. In the short term labor shortages will raise wages. But, in the long term wages will fall as demand for thier labor falls.

Japan has a demographic that guarentees that the next generation will be smaller than the previous one. From an economic point of view, this means that with each successive generation demand for goods and services will be less than the previous; that is there will be less consumption of consumer goods, food, energy, and resources.

From a purely mathematical point of view, look at a society with 100 people (51 women 49 males). With a TFR of Japan's (1.2 children per female), that this society will produce 61 children- but more importantly only 31 females. If the TFR persists, the next generation will only produce roughly 16 females. It is the pool of available females that is paramount. By the time the 3rd generation comes about, the women would have to bear on average 10 children just to get back to the starting place. Look at the numbers. Now try to operate a profitable business with such demographics. How would you like to be a real estate broker? Every 30 years, the demand for housing would be halved; or try farming as a business; or operate a tool and die company.

Russa, China, Japan, Spain, Greece, are examples of this lowest of the low demographic. In the US, our TFR is near 2.0 only because of Hispanic immigration. Take away Hispanics, and our TFR (based on the 2010 Census) would be around 1.7 children per female. This is more of an indictment on "whites" than anyone else. And this is a religious and not economic issue. The Mormons are the only religious group in the US who have birth rates well above replacement levels (2.1 children per female).

And if you don't think this problem can be kicked down the road, think again. Baby Boomers (ages 46-64) now make up 25% of our population (76 million people). This is where all the money is in our society. The lower birthrates of the last 30 years, and a propondernce of immigrants (who earn far less than average) does not bode well for this nation. The median age of this nation in 1970 was 27 years old; today it is 37.9 . Make your economic estimate of where this nation is going.

Have you considered| 7.8.11 @ 2:38PM

Ross, let me see if I am understanding your points.

With unemployment at 9.2%, you believe increasing demand (new immigrants) is the answer to lack of supply (jobs) ? Additionally, I do see that you narrow this point to Legal immigrants. In times of plenty, I would not disagree, but right now, I'm just not convinced. I know engineers with deep experience that have been long term unemployed.

Does it occur to anyone WHY TFR is down? It may just be that children today land on the Liability side of the ledger vs. the Asset side. The cost of raising a child today is prohibitive, unless you are on welfare. Additionally, the Child Protective laws, that allow agencies to remove your child based upon nothing more than someone's assertion that you are abusing them, without due process, has become an additional barrier. Sshheessh, you can't even spank a kid today without being dragged into court. Also, I am one of those who refused to breed, predominantly due to economic reasons.

I'm not sure I understand your point of "Furthermore, for those of you who don't want Hispanic immigrants, just think about France which now has 10% of its population being Muslim." Are you saying that Mexicans are inherently better than Muslims? In what regard? Are they less violent, less needy? Please explain.

Because of tax policy, for most of us, it takes two income earners to make ends meet. Much of this income is allotted to child care. If income and other taxes were reduced, and people could keep more of what they earn, we might be able to have a single income earner provide the sustenance, and let Mom stay home and raise the kids. Do you know what it costs to put a kid in daycare? It is no less that $75.00 per week per child, with good daycare running well over a $100.00 per week.

Bottom line, this country is not family and kid friendly, and until that changes, I don't believe that the TFR will go up.

Please see my response to Buckeyeman above...it applies here as well.

denise| 7.8.11 @ 6:20PM

Just last week Al Gore was arguing that we needed to stop reproducing because of Climate Change.

JP| 7.9.11 @ 11:12AM

"Does it occur to anyone WHY TFR is down? It may just be that children today land on the Liability side of the ledger vs. the Asset side. The cost of raising a child today is prohibitive, unless you are on welfare."

To decision to have or not have children is more of a religious question and not economic. My grandparents on both sides of my family were dirt poor immigrants but bore 6 children each. On average, secular families do not bear children. And the only religious group in the US that have large families are Mormons.Both Catholic and Protestants on average do not have large families. Despite being much better off than thier grand parents, today's religious people procreate about the same as everyone else - they've joined the secularists.

l5j6| 7.8.11 @ 4:26PM

Ross, with all due respect, there is more to life and more to a country than just economics.

There is culture, language, religion, customs, values, etc. Do I really need to explain this to you?

JP| 7.9.11 @ 11:13AM

And our culture is dead. We just don't know it.

john| 7.8.11 @ 10:45PM

If it were possible to have one family member do the primary support economically for a family and it were more feasible for the other to stay home then the birth rate would rise and then the arguments for so much immigration would cease to exist

Charles R. Williams| 7.9.11 @ 6:59AM

The big problem with American immigration policy is that we are letting the wrong people in and making it too difficult for the right people to get in.

Clint| 7.8.11 @ 11:04AM

Obama's Presidency Is In Serious Trouble.

Americans Will Vote Their Wallets In 2012.

The Tea Party Rebellion Escalates.

Carpe Diem.

Too Many Tims| 7.8.11 @ 11:04AM

Man, everything Obama touches turns to sh*t. It's as if socialism is inherently flawed...

Pete| 7.8.11 @ 11:35AM

Indeed. If only we could draw upon some lessons from history...if some, or just ONE country had tried socialism we might be able to learn from their experience. Duh.

Conservative Bob| 7.8.11 @ 11:45AM

Well said.

DanMingo| 7.8.11 @ 12:44PM

how about all the sh*t he inherited from the 'free market' economic policies of Reagan-Bush, which have brought us to this point.
In fact Reagan/Bush policies are directly responsible for over 90% of our current debt.
http://en.wikipedia.org/wiki/N.....tial_terms

Steve A| 7.8.11 @ 12:58PM

I just love this argument: Here is a summary:
Reagan & Bush sucked even worse than Obama. They spent waaaaaay to much $$ so now we need Obama to triple the amount of $$ we spend to fix it.

Wow. What a deep thinker! What crystal clear logic! What a compelling argument in favor of the continued destruction of the economy!

Thank God for the genius of the DanMingos out there to set us straight.

Jim from Virginia| 7.8.11 @ 2:52PM

Steve: Before you become even more condescending, do look up some facts. For example, Reagan tripled our national debt, and of today’s $14.3 trillion debt, nearly $10 trillion accrued during Republican administrations since January 1977. Yes, the gross imbalance between revenues and spending over the past two years has raised the debt another $2-plus trillion. But what caused the imbalances? Well, Bush-era financial policies lowered taxes then brought us the great recession which, among other things reduced revenue further; the high costs of the continued wars in Iraq and Afghanistan; and Bush's TARP and Obama's stimuli spent to help resuscitate the economy and keep unemployment from rising to over 20%.

Bruce Berger| 7.8.11 @ 3:38PM

Jim,

A number of years ago I looked at the average deficits under Reagan and Clinton. Clearly, deficits were higher under Reagan than under Clinton. I used percentage of GDP, rather than absolute numbers for my analysis. About half of the difference in the size of the deficit was due to differences in defense spending. In other words, Reagan invested money to put the USSR out of business, while Clinton dramatically reduced defense spending because the USSR was out of business.

Willy| 7.8.11 @ 5:22PM

Perhaps I'm in a time warp, but wasn't Carter the Chief Exec in 1977? And didn't Reagan win election after asking the question "are you better off now than you were four years ago?" Sorry, but you're showing your political dirty underwear.

JP| 7.9.11 @ 11:16AM

The GDP in 1981 was $3 trillion. When Reagan left it was over $10 trillion. As a percentage, the debt wasn't much changed when Reagan left office as his policies created so much aggregate wealth. Since 2009 Obama added $5 trillion of debt, while our GDP hasn't budged. Do the math, report back later.

buckeyeman| 7.8.11 @ 2:29PM

Just too, too stoopid to recognize that neither Bush was remotely an advocate of free market principles. How can you possibly twist Reagan's steadfast defense of liberty into a causal factor in our current fiasco? Oh, yeah, you're a leftist, so facts and logic don't enter in. Our impending collapse is, in fact, exactly what Reagan warned us would be the eventual result of accumulating years of collectivism.

Cleophis FlyJuice| 7.11.11 @ 8:18AM

For those of you who are still propagating the fallacy that everything is "Bush's Fault", Educate yourselves:
Remember the day...
January 3rd, 2007 was the day the
Democrats took over the Senate and the
Congress:

At the time:
The DOW Jones closed at 12,621.77

The GDP for the previous quarter was 3.5%

The Unemployment rate was 4.6%

George Bush's Economic policies SET A
RECORD of 52 STRAIGHT MONTHS of JOB
CREATION!

Remember the day...
January 3rd, 2007 was the day that Barney
Frank took over the House Financial Services
Committee and Chris Dodd (friend of Angelo) took over the Senate Banking Committee.

The economic meltdown that happened a year and a half later was in what part of the economy?
BANKING AND FINANCIAL SERVICES!!!

THANK YOU DEMOCRATS for taking us from
13,000 DOW, 3.5 GDP and 4.6% Unemployment... to this CRISIS by (among MANY other things) dumping 5-6 TRILLION Dollars of toxic loans on the economy from YOUR Fannie Mae and Freddie Mac FIASCOES!
(BTW: Bush asked Congress 17 TIMES to stop Fannie & Freddie - starting in 2001 because it was "Financially risky for the US economy"): http://www.sportstalkworld.com/
showthread.php?16828-Dems-Cause-CRASH
!

And who took the THIRD highest pay-off
from Fannie Mae AND Freddie Mac????

OBAMA (unheard of for a freshman Senator)

And who fought against reform of Fannie
and Freddie???

The HYPOCRITE in Chief Obama

So when the kool-aid crowd blame Bush...

REMEMBER JANUARY 3rd, 2007.... THE DAY THE DEMOCRATS TOOK OVER!

beebop| 7.8.11 @ 6:26PM

You sound like you think this is an unintended consequence. I posit that it has been the plan all along: Reduce the number of workers while adding to the numbers who rely upon gobment handouts and add to the union membership and what do you get? A majority who will not vote against their own interests. Mistake? Hell no. Objective accomplished!

Wayne | 7.8.11 @ 11:31AM

There is another bright side to this. It adds another nail to the coffin for 2012. This has been predictable since Obama took office. We saw no stimulus in the stimulus bill and no solutions in his housing and banking bills. He antagonism against business and his addition of thousands of EPA and other job-killing rules and policies have had the effect a 5th grader could predict.

We have a dope running the country and hopefully he takes his pseudo-intellects from Yale and Harvard with him.

JP| 7.8.11 @ 11:54AM

Yesterday, a WH spokesman indicated that unemployment would not factor into the 2012 elections. That may have been brave talk; but, I think they were buying into labor analysts expectations of 120,000 new jobs for June (those analysts made a disasterous summation. Their predications were 90% off base).

I think the Obama WH is in damage control mode right now. They are out of ideas -as if they had any.

Josh| 7.8.11 @ 7:09PM

You are wrong on having seen no stimulus. The Federal Stimulus Program, particularly the Broadband initiative, has had a direct impact on my community and my job. The company that I worked for had so much work installing fiber that they decided to end customer-facing operations and become a pure transport provider.

So, do not tell me that "we" saw no stimulus. I see its effects every day as trucks crowded with fiber pull teams roll out of the warehouse every day.

Scott in Mich| 7.8.11 @ 9:17PM

Yes, I saw a study that showed that the cost per household served in Montana (as I recall there were only four houses that couldn't get broadband by some existing means) was a couple million dollars. Very productive use of taxpayer dollars....and very stimulative.

Jim| 7.8.11 @ 11:17PM

This is a perfect example of the "broken window" theory explained by Bastiat in about 1850 in the essay "What is Seen and What is Not Seen." We see the glazier replacing the broken window and say, look at the economic activity, but we don't see what the home owner would have done with the money if he were not forced to spend it on the broken window. The money that is not spent is a loss to the economy. In this case, taking money from taxpayers (or lenders first, then taxpayers later) and spending it on fiber optic cable is seen, but what that money would have done if the taxpayers had been allowed to keep it and spend it on what they wanted is not seen. To quote, "When a government official spends on his own behalf one hundred sous more, this implies that a taxpayer spends on his own behalf one hundred sous the less. But the spending of the government official is seen, because it is done; while that of the taxpayer is not seen, because—alas!—he is prevented from doing it. " http://www.econlib.org/library.....sEss1.html

JP| 7.9.11 @ 11:18AM

Yes, and everyone of those broadband jobs cost the taxpayers roughly $278,000 while the lasted. In other words, the boradband jobs created no wealth; they only consumed it.

Pecos| 7.8.11 @ 11:58AM

During the mid term elections Americans voted into office candidates who did promise to roll back Obamanomics. They also promised to repeal ObamaCare, balance the budget, rein in the EPA and assorted other agencies.
Nothing has happen. The Republicans in Congress have sat around until Obama has made them less than a speed bump on his road to a new Amerika.

Have you considered| 7.8.11 @ 2:46PM

Ding Ding Ding, give Pecos the award of the day.

You are exactly correct, and I actually took a lot of grief here at TAS for suggesting that the R's would do exactly this, the Pledge notwithstanding.

Jim| 7.8.11 @ 11:19PM

Give Republicans the Senate and the White House in 2012 and see what happens then. The only budget that has been passed by any legislative body is the Ryan budget passed by the House.

Mimi| 7.9.11 @ 7:37AM

We needed a Veto proof SENATE to over-ride vetos in 2010....the RINO'S gave no Help....We could have stopped the COMMIE stuff in its tracks. The T-Party is growing more each day...A strong Conservative President in 2013 and a truly awakened people will turn the OBAMA disaster around!

Bill Hussein O'Stalin| 7.8.11 @ 12:15PM

Last year there were 1.4 million jobs created by American companies overseas, and fewer than one million here.

The American job market is a confusing maze of state and federal regulations. The first law passed under Obama gives women unlimited time to sue former employers.

Who would hire anyone under those circumstances?

Kirk| 7.8.11 @ 11:45PM

People in every other wealthy, developed country on the planet.

DanMingo| 7.8.11 @ 12:34PM

the Administration displayed their usual economic ignorance by giving the tax break only on the employee side of the ledger. If they had to choose just one side to give a break to with a view toward creating jobs, it should have been the employer
Except that has not worked thus far (tax cuts for the rich created no jobs, as they were supposed to do). Giving more to employees gives them more money to spend. Spending this money creates more demand for goods and services. Supply-side economics has failed.

Steve A| 7.8.11 @ 1:00PM

Dan, Try Econ 101 before you comment further. Thanks for participating.

Adam| 7.8.11 @ 7:04PM

Umm Steve A, explain yourself when you comment. Thanks for participating.

Jim| 7.8.11 @ 11:22PM

I'll explain for him. Do employees hire themselves?

DanMingo| 7.8.11 @ 12:36PM

Passing free trade agreements is a very good idea

like NAFTA?
Free trqade agreements have allowed our manufacturing base to relocate in cheap labor countries. These policies have lowered wages and increased the trade deficit.

Brian| 7.9.11 @ 12:42AM

Dan - Its not the trade agreements which is driving the manufacturing decline. If a textile shop in China can produce the same goods as one in NC, it does not matter to any country which is not China or America if we have a free trade agreement together, they will buy Chinese and not American.

On the other hand, by opening up foreign markets and leveraging our buying power (which is going to be used up whether we leverage with it or not) we can stem the manufacturing sector decline by increasing demand for U.S. products by selling in more markets.

Lower wages are in some instances a necessary evil which saves jobs. Unions were successful in driving up employee wages, but not in retaining those jobs when it came time to move overseas. In a national economy, the NLRB was able to provide some federal protection for those jobs despite the high wages, but in our international economy, that is not a realistic option.

As to the trade deficit, that is again driven by the fact of the emerging global economy. Poorer countries have an advantage in producing the same goods when their per employee cost is so much lower. Our only advantages are our in place infrastructure, our quality, our ability to reach possibly more markets (which is why free trade agreements are so critical to lowering the relative costs of our overhead), and our historic ties.

Take your argument to its logical conclusion of high tariffs and trade protectionism and you get another depression.

DanMingo| 7.8.11 @ 12:38PM

Obviously, reducing our debt and deficit is critical...We simply must address the growth of entitlement programs' costs.

True. But not SS, which is self-funded and does not contribute to the deficit.
Let's remove the cap on SS paid on income.

W| 7.8.11 @ 2:09PM

NAFTA was Clinton's bill, and it helped the economy. Remember Algore debated Ross Perot o

buckeyeman| 7.8.11 @ 2:33PM

You claim SS is "self funded" but then argue that the cap on income to which the SS tax applies should be remove. Would that make SS "more" self funded that it is now? Do you have any idea what the hell you're talking about? SS is NOT "self funded". It is a redistributionist Ponzi scheme.

Willy| 7.8.11 @ 5:29PM

Anyone who has been paying attention knows that SS is paid by an IOU from the Feds(notwithstanding Algores lockbox).

Brian| 7.9.11 @ 12:47AM

Agree to an extent - but SS was a pyramid scheme, and we now have an inverted population pyramid, and it is not projected to continue to be self-sustaining. Without real reform, its not going to last. Removing the cap is a good idea, but more would be needed to save it.

Last, if you simply measure monies in versus monies out, you get your self-sustaining argument, but it may be the wrong measurement. Remember the monies are not set aside in an account for those paying into the system. The money has all already been spent.

And every time a conservative talks about Medicare reform or welfare cuts, liberals start calling them heartless killers.

JP| 7.9.11 @ 11:20AM

SS was self funded from 1986-2010 due to the demographic bulge of the Baby Boomers and the 14% payroll tax. But, it has been running defecits for the last 4 quarters due to a combination of the recession and the beginning of the Baby Boomers retiring.

DanMingo| 7.8.11 @ 12:40PM

Reducing debt and deficit is important, but reducing regulation -- and the threat of further regulation -- is just as important.

Yes because de-regulating the financial sector has worked so well; by nearly destroying the global economy.

Have you considered| 7.8.11 @ 2:55PM

You might want to read Reckless Endangerment in order to refine your argument. It was more a combination of government involvement (CRA) and moral hazard created by the GSEs, but I agree that deregulation did play a part.

Willy| 7.8.11 @ 5:32PM

You might have a better argument if we regulated Chris Dodd and Barney Frank.

Ross Kaminsky| 7.9.11 @ 9:57AM

The financial sector is the most highly regulated in our nation, with the possible exception of health care, also not a paragon of happy customers.

Furthermore, the home-lending industry was particularly influenced by government policy.

You may note that BB&T, a big bank which was run by a man who lives largely by the principles of Ayn Rand, refused to go along with Barney Frank and Chris Dodd and thus avoided the destruction that many other big banks faced.

In other words, the failure you discuss is BECAUSE of government regulation, not due to lack of it.

George S| 7.8.11 @ 12:46PM

Where do these "economic expectations" come from? Who are all these "surprised" analysts and economists? Who pays them and... why? My guess is that they are government paid background dancers, making the administration appear to be doing something positive. But what I think is happening is that the trajectory of the economy is inexorably headed towards government control; the first step being collapse. Look at Greece, they are essentially being put on a budget (no freedom to spend where they think is needed). I think the same thing happens if you go bankrupt -- the court takes over your finances. So, could Obama and Geithner (if I misspelled, I am not sorry) want this trajectory we are on so that the federal government is given the enormous power of directing spending in all specters of the free market? Nah, that's something only power-hungry statists dream about.

St Reformed| 7.8.11 @ 1:15PM

You’d made a key point: Economic collapse is the prerequisite for federal control of the economy. Obama’s current viable option is to let it fail catastrophically; then he only needs a way to blame Republicans in order to reap the political benefit. The “blame George Bush” card has been overplayed, but undoubtedly BO’s “tingles” media sycophants will be good propagandists in the (class) struggle to “fundamentally transform America.”

DRed| 7.8.11 @ 2:02PM

We've been following the 'conservative' recovery plan since at least the mid term elections. The private sector has been left alone (no more stimulus), we kept the Bush tax cuts, the public sector has been rapidly shedding jobs and all we're talking about is budget reduction. Where are the jobs? What's the republican plan? Cutting funding to NPR? The most meaningful republican plan I hear is to thoroughly torpedo the economy by refusing to raise the debt cap.

Bob Grant| 7.8.11 @ 4:32PM

Red,

You are clever in that you will not truly stick your neck out and endorse a solution. Another stimulus? More regulation? Shut down the coal industry? Create more uncertainty? Give me specifics sir.

Brian| 7.9.11 @ 12:25AM

Hardly. Conservatives want spending cuts and for us to not spend more money than we have. Conservatives want entitlement reform. But the GOP only controls one half of the legislative branch, which means it cannot pass any legislation. Obama and the Democrats blocked meaningful spending cuts. 2.5 years of record deficits is the liberal trajectory which started with the Pelosi-Reid Congress in 07, and crystallized when Obama took over. Once the GOP has the Senate and the White House, we should see a different direction. Remember, from 01-07, unemployment levels were low, and deficit spending, while not truly adhering to a conservative philosophy, was in much better shape than the mess we're in now.

boot| 7.9.11 @ 1:01AM

DRed you are freekin ignorant. The repubs can't inact a recovery plan because the senate (you know reid) is controlled by dems. That means that none of repubs bills make it through to obama' who would veto them anyway.If you took time to study the finacial crises you would see that the fair house act was pasted by dems during clinton. Clinton himself said we dems are part to blame for the down turn in. Obama was involved also when he was at ACORN. He and ACORN push the feds to loan to people that they knew would deflawt' but said that tax payers wouldn't get stuck with the bill. If you study a little you'll see obama has been wrong long before he was POTUS.

JP| 7.9.11 @ 11:24AM

The GOP doesn't control things. The Senate and WH are still controlled by the Dems. And we continue to borrow a hundred billion every month. And pray tell which public sector jobs have been shed? The EPA, IRS, HHS, DOD, CIA, Home Land Security, DOJ, SEC, and FTC continue to expand thier offices.
Here's another hint, there are not enough assets in this nation to satisfy Obama and th Dems. Take a lesson in econ and get back to us.

Clint| 7.8.11 @ 3:06PM

" If the debt ceiling is not increased, the Treasury can prioritize interest and debt payment to avoid a default and essentially put the government on a stringent pay-as-you-go basis. Would that involve extreme cuts in government spending? Certainly. But it could be done, if it had to.

Let's remember that the Treasury still rakes in quite a bit of money in revenues — it took in $604 billion (seasonally adjusted) in the third quarter of 2010. In FY 2010 the annual debt service was some $414 billion, working out to an average of about $104 billion per quarter. Although the numbers won't be quite the same going forward, the debt service will soak up only about one-sixth of the incoming revenues."

Clint| 7.8.11 @ 3:17PM

"To expand productive activity and thus to create jobs, we must restore confidence in the system. Entrepreneurs do not invest freely in uncertain times or when they feel that their hard-earned profits will be confiscated in some redistribution-of-income scheme."

john| 7.8.11 @ 10:34PM

The Government borrowing money is in direct competition with private borrowers and this is one of the primary problems with the current economy

Ellis Wyatt| 7.8.11 @ 5:05PM

Expect action from the administration. I am quite sure Obama will make himself clear and have a laser like focus, after this afternoon's round, on rolling up his sleeves to blame someone else for driving some car into a ditch. After all, he inherited this and bears no responsibilities for his own actions that have made it so much worse. Fixing the economy is a kinetic action that will take alot of time to fundraise and run for re-election.

NathanMcKnight| 7.8.11 @ 5:26PM

Let's face it, GOP boilerplate is all you have to offer. Whatever you do, don't face the fact that 30 years of tax cuts for the rich and entitlement cuts for everybody else has bankrupted this country and divested it of a skilled labor pool.

Willy| 7.8.11 @ 5:34PM

Thirty years of entitlement cuts? Apparently you've been living abroad.

john| 7.8.11 @ 10:39PM

The best way to control the current deficit is to rollback as much as possible of the current descretionary spending which has occurred under Obama, and then the entitlement programs only need to be updated and fixed for future realities

joanne| 7.8.11 @ 5:37PM

Isn't it rich that Goolsbee said on a Sunday show that the only who could get us out of this situation(I'm paraphrasing) would be the PRIVATE SECTOR. Isn't it funny how the very next day he reported suddenly that he was leaving Obama and
returning to his old job!!! Obama is thick as a brick, and he scares me because he DOESN'T want to change anything. He wants to continue this destruction of our country, This inckludes wiping out NASA, killling jobs, keeping peoople on the dole. This wanna be king has to be kicked out in 2012. I feel that the election of Scott Brown,Bob McDonald, and Christie, incl. the 2010 landslide was all foreshadowing against Obama. Let's finish the job In Nov.2012.

Russell1| 7.8.11 @ 6:29PM

How about trying a realistically sized stimulus bill that is not watered-down with multiplier-reducing tax cuts? $850 billion in stimulus wasn't enough to plus a $2.5 trillion hole in demand. More tax cuts for the rich aren't going to get us where we need to go.

Ellis Wyatt| 7.9.11 @ 11:08AM

What are you talking about? Who is advocating tax cuts for the rich?

Rick| 7.8.11 @ 6:37PM

Your a bigget and a rasist!

Brian| 7.8.11 @ 7:57PM

There is another thing that is causing our economy to be out of balance and that relates to savings and investments options. The investment opportunities for someone to save are too risky. There is no places for individuals who have a low risk level because those rates are near zero. Which means people are investing things they should not be investing. Because of this we push everyone into higher risk levels. Does it make sense that a bank would only pay 8.20 on nearly 2 million dollar balance for a month. That is what we have in this economy.

Harley2002| 7.8.11 @ 9:06PM

Let's face it Obama knows exactly what he is doing. He is destroying the country he hates. Be advised "His" people" are doing no worse then the were under Bush. They still get their assistance from the g0vernment their free health care etc. He is destroying the middle class white peoples lives. At the same time his Muslim side has Holder and his czars pushing pro Muslim policies throughout the government. People just can't comprehend they were duped into electing an Anti American to the most powerful office in the world.

Hugh Manatee| 7.8.11 @ 10:13PM

Amen. Obama could have focused like a laser beam on jobs starting around January, 2009. Instead, he went for Obamacare. Oh. Also, he bailed out GM to save a bunch of union jobs and to give the company to its workers.

In fact, Obama and the Dems controlled Congress - completely - back in '09. If reform of the patent system, for example, is a good idea, then why wasn't it done two years ago?

My own guess is that the economy will be such a complete and utter disaster by next year that the Republicans are certain to take the White House and the Senate. Thus, 2012 will mark the start of what will be a long recovery from the era of Obama. It will be a long time before we elect another socialist.

tz| 7.9.11 @ 6:52AM

If Obama had his way we'd all be unionized green workers.

Mimi| 7.9.11 @ 7:44AM

It should be.....NEVER AGAIN..EVER !!!

peggy verdad| 7.8.11 @ 11:21PM

gee were cutting government jobs and the unemployment rate went up who would have thought that would happen. were are the jobs boehner promissed if the bush tax cuts were extended ?

Kirk| 7.8.11 @ 11:40PM

Wow, St. Reagan must have really been to blame for unemployment in 1983 since it was lower when he took office than when Obama took office, peaked much higher, and was higher at this point, 2.5 years into their first terms. I'm sure it wasn't his fault though, since he was a Republican.

Perry M| 7.9.11 @ 12:08AM

Welcome to Obamaville - where anything wrong is George Bush's fault.

Obama doesn't care about employment, in fact, the more folks taking the next 99 weeks off and getting a nice unemployment check just add more soldiers to Obama's Liberal army.

In fact, the more America crumbles the more soldiers are added to Obama's Liberal army - millions and millions the worse things get.

It's a win-win for Obama - and that's all that counts.............

Brian| 7.9.11 @ 12:19AM

Disagree with author's assertion that government contractors are more efficient than government employees. My experience has been precisely the opposite. Government contractors frequently overbill the government, have little incentive to save the government money due to how their contracts are structured, are incentivized to milk a government with poor oversight, and have little to no marketplace efficiencies due to the paucity of competition. Its not a true market. Worse, there are too many instances where cronyism leads to contracts going to those who are well-connected. The oversight is terrible.

Government has many inefficiencies to be certain, but government employees are far and away more cost effective than their private sector counterparts in most instances.

tz| 7.9.11 @ 6:48AM

In most instances, we could privatize most government functions and be better off. Then we wouldn't have to worry about government employees or contractors.

We should outsource the post office, as has been done successfully in other countries such as Canada and New Zealand.

charles n gray jr| 7.9.11 @ 2:37AM

Your critique of the Obama policies in my mind is not totally objective because some of what I hear in your article is a repeat of the same arguments from the past. Reduce regulation on business, smaller government give taxbreaks to business. If the pass is prologue to continue policies that clearly help cause the lost of over 8 million jobs would not be intelligent. I would say that your critique about the lack of infrastructure spending in the stimulas package is valid . The problem with our recovery and the lack of jobs is that we are in a global market and we have create a system in the U.S. where we allow companies to ship jobs oversees because labor cost are lower. This has caused us to lose millons of manufacturing jobs. This is a major reason for the slow job growth and until we begin to deal with the system that allows companies to operate in this way we will continue to struggle.

tz| 7.9.11 @ 6:44AM

The best patent reform we could hope for would be to get rid of the patent office altogether.

The new "patent reform" will ensure that slick lawyers will be "first to file", thus screwing over those who legitimately discovered something new.

Getting patents is a long and expensive process. These days, you could barely create anything without stepping on someone else's patent.

The best thing we could do is scrap the patent system. Yes, there would be a lot of pissed off laywers and large companies screaming that they can't screw over the little guy, but it's all just wind.

Walk DMC| 7.9.11 @ 6:59AM

I think Obama is also hurt by the fact that the MSM has so downplayed the spike in gas prices. Its hard for him to blame gas prices (even if he could show he wasn't to blame for the rise) since there has been so little attention given to them. Thus the high gas price excuse making looks like just that.

Tatanka| 7.9.11 @ 7:50AM

The simple way to look at the jobs situation is to see that government is less efficient than the free market. Because of organizational design and work rules government cannot produce efficiently. As government gets larger and controls more of the economy, the overall economy suffers. Government is less efficient than business and so jobs are destroyed as government crowds out the free market. Its that simple.

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