Tuesday, June 8, 2010

So That Explains It - Obama Economics Fail

A couple of seemingly unrelated articles have brought the source of Obama's economic failure into sharp focus. First, The Foundry (The Heritage Foundation blog) reports that private sector job creation fell by 190,000 this year. They get it right, by avoiding the phrase "despite the stimulus" and not quite saying "because of the stimulus." They also get to the heart of why unemployment remains so high, and private sector employment remains so low.
How could job losses have been worse in 2001 but unemployment so much higher now? Weak job creation. The latest Bureau of Labor and Statistics data show that employers have created 8.6 million fewer new jobs this time around than they did almost a decade ago. Heritage Senior Labor Policy Analyst James Sherk estimates that lower job creation accounts for 65 percent of the recession’s decreased employment.Our nation’s unemployment rate is hovering near 10% not because of record job losses, as Biden suggests, but because of record job non-creation. Private sector employers have gone on strike. Contrary to what the President’s economic wizards and New York Times columnists believe, massive government deficit spending does not stimulate job creation. President Obama does not have a secret vault of money he can just throw at the American people. The resources the government spends come from the economy. When the government increases spending, it crowds out the resources that business owners could have invested in their enterprises.
The key fact is that employers are on strike, or lock out, because of Obama's tax and spend policies. But why would Team Barry believe this in the first place? An interesting study publicized in today's Wall Street Journal, explains alot.

Zogby researcher Zeljka Buturovic and I considered the 4,835 respondents' (all American adults) answers to eight survey questions about basic economics. We also asked the respondents about their political leanings: progressive/very liberal; liberal; moderate; conservative; very conservative; and libertarian. .... In this case, percentage of conservatives answering incorrectly was 22.3%, very conservatives 17.6% and libertarians 15.7%. But the percentage of progressive/very liberals answering incorrectly was 67.6% and liberals 60.1%. The pattern was not an anomaly.
Left Coast Rebel guest blogger Conservative Generation has some great personal observations on the study and liberal commentary on it. My favorite:

The government should not cap oil prices in response to a supply shock. I thought anyone living the Carter years would agree with that one.

Do we need any more proof that more stimulus when we are already awash in debt won't help the economy? Do we really think imposing taxes while wasting government dollars on non-productive uses will really save the economy? If you flunked Econ 101 you might.


  1. Dude, I can't believe Google alowed you to put such a racist photo of our dear leader with a KKK hat!

    Remember how you admonished me for this image?


  2. I'm still an optimist about the American economy. There's a lot of pent-up activity awaiting a reduction in government interference and regulation.