Many economic laymen like myself have been befuddled by the rise and subsequent stagnation of the unemployment rate in the U.S., even though just last week a group of economists said that the recession has been over since 2009.
I don’t think it requires a long drawn out, wonky answer to determine why our economic troubles haven’t ceased. It is remarkably simple. Just look back at the bailouts, stimuli and cash handouts over the past two years. In fall 2008, the federal government bailed out Wall Street and around the start of 2009 the feds bailed out big auto companies GM and Chrysler.
In February 2009, money was handed out to irresponsible state governments and thrown to so-called “shovel-ready” government infrastructure jobs and to top it off, there was another car stimulus over the summer with “Cash for Clunkers.”
However, what the president giveth with one hand, he taketh away with the rest of his agenda. After hurrying through an almost trillion dollar stimulus bill, he quickly pivoted to the main objective of his first term – health care reform. I have already outlined in a previous column the potentially job killing aspects of health care reform.
The main issue is the provision that tax companies don’t comply with new federal mandates for health insurance. Next was his populist crusade against the financial industry. Beyond the fact that the reform ignored Fannie Mae and Freddie Mac, it put new and tighter regulations on an industry which businesses rely on for loans. Without them, businesses cannot expand and hire new workers.
Obama has also proposed a massive overhaul of the energy sector of the economy. The centerpiece of which is a pseudo energy tax that will hit every American family and business, regardless of income level or profit margin.
Here at George Mason University, we’ve seen union power attempt to entrench itself with the service employees of Service Employees International Union. The president favors the “Card-Check” provision that will allow the bullies and thugs in unions like SEIU to lean on potential employees to join and eliminate the secret ballot.
What economic picture does this paint? I’ll tell you, a very unstable one. Major institutions are being changed, which will inevitably require more tax revenue. Bankruptcy laws have been ignored and there has been little to no long-term help for small business in America.
These small businesses are the true backbone of the economy and engine of economic growth; they create three out of every four jobs. So why does it surprise anyone that in an environment where everyone except for the small business is being bailed out, the same small businesses are not expanding or blossoming?
The one thing that is not being projected in Washington is a calm and stable future. The simple way to get jobs created is to keep the rules the same. Stable economies produce jobs.
I understand President Obama’s lust to enact a decade-old Democrat party agenda, especially with their hold on Congress, but his major reforms are scaring the very people he needs in order to create jobs. The federal government has already spent ridiculous amounts of money on countless sectors of the economy; these ventures have produced small and short benefits.
What conventional wisdom and the American people are looking for is a steady, substantial and upward turn in economic growth and a downward unemployment rate. The opposite has happened, especially on the jobs front. If you factor in under employment and folks who have stopped looking for work, the rate climbs from the official level of 9.6 percent to around 15 percent.
If we need to give a stimulus, just allow America’s small businesses to have more of their money in order to improve, expand, and most importantly hire new workers. The same goes for American families and individuals who also need tax relief. When productivity is encouraged, prosperity can bloom.
Only then can a true recovery happen, with the jobs to take us further into the 21st century.
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