Thursday, January 21, 2016

Job Creation 'Coming Up Short' Under President Obama

Ever wonder what the worst foul shot ever shot was? (click through title link if you can't see the video)

Well, now you know. Not only did it not go in the hoop, it barely made it 2/3rds of the way to the basket!

The job creation results under President Obama have been pretty much like the DeSagana Diop free throw for the Charlotte Bobcats: way short of the goal.

We readily grant the fact that when he was running for President, we were about to head smack-dab into the nastiest economic recession since the 1930s.*

However, most Presidents who see the economy go in the dumpster right before they take over in the White House are prepared to do something concrete about it. After all, they usually run on a platform of 'Vote for Me And I Will Get You A Job!' or some variation thereof.

Most Presidents see a rapid recovery of jobs lost during a recession in a very short amount of time. Not all the jobs lost come back; some of them just disappear as automation replaces manual labor, some are moved overseas and never come back.

But the vast majority of those lost jobs return and are filled by the laid-off employees and the economy starts to grow again. Assuming the new President and Congress enact the right kind of fiscal policy and the Fed maintains the correct monetary policy to give the resuscitating economy as chance to survive, that is.

That is where President Obama and the Congress of 2009-2011 failed the America people. They chose to 'stimulate' the economy with massive amounts of federal aid for 'shovel-ready infrastructure projects' (hardly any were completed); 'cash-for-clunkers' ranging from automobiles to refrigerators; and hundreds of billions of dollars to bail-out state budgets that were way overspending incoming revenues mostly by keeping union state workers on the payroll.

It didn't work for the most part, did it?

Just for argument's sake, let's take a look at where we were job-wise in 2008 before the Massive Recession and where we are today versus where we could have been had we just stayed on a steady growth trajectory of 3% per year.

In 2008, there were 145,362,000 Americans with a job in the workforce. Some were part-time but they were still counted as 'employed' in official government statistics.

At the end of 2015, as of December numbers from the Bureau of Labor Statistics (BLS), there were 149,929,000 Americans with a job in the workforce. Not bad; 4.5 million more jobs over the 2008 baseline is pretty good, especially when you consider that the economy first had to recover 8.8 million jobs that were lost in the nasty recession from 2009-2010.

However, what is the 'potential' job force that could be out there today in the American economy if we had a President and Congress that fully understood what it would take to get this economy jump-started again after being on life support during the recession?

(President Ronald Reagan inherited economic conditions from President Jimmy Carter in 1981 almost as bad as President Obama did in 2009 but the economy revived pretty quickly from 1983-on and ignited one of the largest economic booms and job creation eruptions in American history)

We were shedding millions of jobs from 2008-2010 so we are going to leave those years out of this calculation. Let's give a full 2-year period from 2011-2012 to recover the lost 8.8 million jobs just to be generous.

Once we theoretically had gotten back to square one by January 1, 2013 in terms of having 145,362,000 Americans employed at the end of 2012, a full 4 years after President Obama was elected as President in 2008, how many jobs should we theoretically have out there today in the American economy had he pursued solid pro-growth economic policies that produced just a 3%/year annual growth rate and not thrown such a heavy regulatory-and-tax wet blanket on American business and individuals?

158,841,000 American jobs.

Almost 9 million more jobs than exist today in America.

That is the 'opportunity lost' we have collectively incurred as a nation due to the economic and regulatory policies pursued and passed into law by President Obama and Congress during his first 2 years in office and virtually nothing concrete since then.

Literally. These are millions of 'job opportunities' that have been 'lost', jobs that were not created and which young and old people looking for work could not find or fill due to decisions made in 2009-2010 by your elected officials in Washington at the time.

Sure, a Republican Congress was elected in 2010 to stop his abrupt shift to the left on most public policy issues which includes the economy and creating new jobs for American citizens. They pretty much were following the 'Loyal Opposition' role every political party not in control of the White House has followed since President George Washington left office.

Who's responsibility is it to lead the country, the Congress or the President?

Ideally, there would be enough statesmen/women in both the US House and US Senate plus a President to realize the Constitution gives such talented leaders the tools and the right and the duty to exert positive leadership to force compromise and come to solutions for the good of the country as a whole.

However, the nation usually looks to their Chief Executive (Officer) in the White House to take the lead in 'being a leader' simply because he is an army of one and can speak clearly with one voice. Congress can try but they can't; it is like herding cats up there on either side of the aisle or The US Capitol.

That is where President Obama has perhaps failed the most which even he admitted as much in his SOTU last week.

As soon as President Obama said these words to the Republican Caucus: 'Elections Matter' while cramming legislation through Congress in 2009-2010, he pretty much sealed his fate for the next 6 years to not get much of anything else done once the Republicans took back control in the 2010 elections and built majorities in both the House and Senate in 2012 and 2014.

'Elections Mattered' in 2008, just as 'Elections Mattered' in 2010, 2012 and 2014.

So, if you are wondering why there is 'so much anger' out there in the hinterlands that is causing people all over the country to run to Bernie Sanders on the left and Donald Trump (among others) on the right, look no further than the abysmal job creation history over the past 7 years.

You don't have to have a Ph.D in economics from Harvard or Yale to understand when you and your friends and neighbors lose their job in 2009 and can't find comparable work over the last 6 years with anywhere near the salary or benefits of your previous job, that 'something just ain't working right!' in America lately.

If we had an extra 9 million new jobs today, our labor participation rate would not be at the lowest level since 1977 under President Jimmy Carter, 62.6%. It reached a high of 67.1% under President Bill Clinton in 1998 when, yes, the American economy was experiencing a technological and internet-fueled boom.

More older people would be back in the workforce actively looking for these jobs and young people just graduating from college and high school would have an easier time finding new jobs.

There probably would not be as much anger out there in the populace either. Any incumbent today better be wary of their re-election prospects on either side of the aisle. 'Anti-Incumbency' is the winning ticket this year across-the-board most likely.

More supply of work opportunities leads to more people looking to do that work.

Don't you want something better for the next 4-8 years?

You deserve better than what has happened the past 7 years.

* (If you want to have any chance of understanding just how bollixed up our financial system had become by 2008 through a comedy of errors on the part of Congress and past Presidents plus out-and-out greed from Wall Street bankers and real estate speculators, you need to go see 'The Big Short' as soon as you can)

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