OPINION:
President Obama really needs to stop scapegoating his predecessor for all the bad news. Nobody’s buying into the blame game anymore. After three years and more than a trillion in “stimulus” that was supposed to create millions of jobs, we’re seeing the trend moving in the opposite direction. The U.S. economy created a paltry 69,000 jobs last month, pushing the unemployment rate up to 8.2 percent, according to government figures released Friday.
That bit of bad news overshadowed another fact. The Bureau of Labor Statistics figures originally claimed 115,000 positions were created in April. Not so, according to the latest revision that says only 77,000 were created. Combined with the increase in long-term unemployment and the length of time spent in the unemployment lines, the “recovery” looks more like stagnation.
The dire state is revealed in the economic-growth reports that dropped from 2.2 percent to 1.9 percent for the first quarter of 2012. Consumers feel what’s happening, and their confidence - as measured by the Conference Board’s Index - plunged 3.8 points into what economists consider recession territory.
That’s not what’s supposed to happen in the third year of a supposed “recovery.” Using data from the Federal Reserve of Minneapolis, what’s happening now can be compared to the way the economy pulled out of the recession of the early 1980s. Back then, nonfarm employment grew 7.6 percent over the start of the recession three years into the Reagan recovery. In the Obama recovery, nonfarm employment is 3.6 percent lower than it was at the beginning of this recession.
As of May, 5.4 million Americans were officially considered long-term unemployed, that is, they were without work for more than 27 weeks. These long-term unemployed constitute an ever-increasing share of the overall jobless tally, almost 46 percent now, up from 44 percent in April. Across the board, the average duration of unemployment is edging up to almost 24 weeks, up from 22 weeks in April.
Just as serious is the problem of underemployment. An increasing number of Americans are being forced to take on part-time work in lieu of full-time jobs: some 8.1 million workers, or almost 15 percent of the labor force. Many of these people are likely not using all their skills or productive potential. Then there are the 2.4 million people (up from 2.2 million) who are considered marginally attached to the labor force because they had looked for work some time in the past year, but not in the past four weeks. They’re not included in the unemployment rate.
Before a true recovery can be kicked off, it must be acknowledged that the Keynesian bag of policy tricks is empty. Stimulus spending on a massive scale was tried; it failed. Easy money has been tried - interest rates are almost as close to zero as they can get - but banks are not lending, and businesses are not investing and hiring. Instead of channeling Jimmy Carter’s tax-and-spend policies that created the recession of the ’80s, it’s time to bring back the low-tax, small-government ideas of Ronald Reagan because we know they work.
The Washington Times
Please read our comment policy before commenting.