Progressive Unemployment

The great political philosopher P. J. O'Rourke said, "You can't get rid of poverty by giving people money." If anyone doubted that, the present inhabitant of the White House has proven it by tossing away trillions of dollars on projects that had no lasting effect on eradicating poverty, creating employment, or improving the nation's purse or infrastructure. Indeed, his initiatives have increased unemployment, will continue to do so, and must be reversed if we are ever to get back on track. He has given us all a clear picture of the devastating effect progressive policies have on employment.

As the week drew to a close, the President and his advisers surely were gasping at the figures. It is what my friend Rick Ballard calls Wreckovery Summer.  Most especially 9.2 percent unemployment, a figure significantly higher than  what we'd been led to believe, and a figure higher than the  8 percent we were warned we would face if we didn't open the doors of the treasury to create those  promised "shovel ready "jobs.  Jobs  which today the President laughingly admits were not exactly shovel ready.

As Bloomberg reports:

"U.S. employers added 18,000 workers in June, less than forecast and the fewest in nine months, while the unemployment rate unexpectedly climbed, indicating a struggling labor market." Plus this: "The so-called underemployment rate - which includes part- time workers who'd prefer a full-time position and people who want work but have given up looking - increased to 16.2 percent from 15.8 percent."

Both Obama and his party look like fools or liars. Just last year, then-Speaker of the House Pelosi  promised if we passed ObamaCare we would create 400,000 jobs almost immediately.

I'd say she is an economic nincompoop, but for the fact that in the past few years her already lavish financial holdings increased by 63%.  Alas, for some reason her economic genius seems to work only for herself and her family.

But, she was certainly not alone in peddling the snake oil Obama was producing. His vice president Joe Biden also promised voters a booming economy.  Just last April he said:

"All in all we're going to be creating somewhere between 100[,000] and 200,000 jobs next month, I predict," Biden said, according to a pool report, adding that he "got in trouble" for a job growth prediction last month. "Even some in the White House said, 'Hey, don't get ahead of yourself.' Well, I'm here to tell you, some time in the next couple of months, we're going to be creating between 250,000 jobs a month and 500,000 jobs a month."

"We caught a lot of bad breaks on the way down," Biden added. "We're going to catch a few Friday' good breaks because of good planning on the way up."

Friday's jobs report  was apparently not the promised "good break."  It  "stunned" economists, reported the New York Times, who must be talking to different economists than I've been reading:

For the second month in a row, employers added barely any jobs in June, showing that the economic recovery has hit a serious speed bump. 

• With all levels of government laying off workers, the Labor Department reported that employers eked out just 18,000 new nonfarm payroll jobs in June. The already low number created in May was also revised downward to a dismally small 25,000 new jobs, less than half of what was originally reported last month.

Although the government's survey of employers showed them adding jobs, a separate survey of households showed that more people were out of work than in the previous month, causing the unemployment rate to rise to 9.2 percent.

The President's advisers and spokesmen are trying to brush off this unwelcome news. White House spokesman Carney says most people don't analyze gross domestic product and unemployment numbers.

David Plouffe, Obama's senior political adviser  says people won't vote in 2012 based on the unemployment rate.

I think these guys are wrong if they think the failure of the administration to gin up the economy will not hurt Obama's reelection fortunes. People know if they are unemployed or not.  And they aren't blind to their children's dim job prospects, and those of their neighbors and other family members.

Professor Jacobson over at Legal Insurrection comments wittily but wisely that:

"The only way for Obama to stimulate the enormous private sector job growth needed to ensure Obama's reelection is for Obama to announce he is not running for reelection, which would unleash a wave of investment and economic activity not seen since the Great Depression."

What Jacobson means in this shorthand way is that the President and his party have brought investment, economic activity and hiring to a standstill by a series of ill-conceived actions, including the unworkable and grandiose ObamaCare, the stifling of almost all  conventional domestic energy production, the arbitrary acts of his regulatory agency appointees.

Having studied Soviet Law in my youth I predict the next action of the gang that has no idea how to create wealth, but  knows only to demagogue voters with class warfare promises of free stuff grabbed from others, is to start looking for kulaks figuratively to hang.  Never mind that it was the action of the government that killed domestic production from farming to manufacturing, they will start attacking the successful farmers and the hard working professionals (engineers, doctors, managers) and accuse them of sabotaging the economic recovery.  At this point, America having been successful for so long in helping people climb the ladder, there are  still so many of us in the kulak class I suspect it will be a harder sell than it was for Stalin.

The jobs picture will improve when he's out of office and we undo his handiwork (and that of Reid and Pelosi when the Democrats controlled two of the three branches of government and rode roughshod over us all).  Still, it's time we understood the chronic nature of this nation's unemployment and start working together to change attitudes and laws to make it possible for unskilled workers to support themselves again if we are to have any hope of reducing poverty.

I was impressed this week, by Walter Russell Mead's article
"Beyond the Big City Blues" in which he says the urban underclass in this country is not hampered as much by race as the  left would have us believe, that their serious problems are not racial in nature.

One of these problems, he notes is the lack of jobs.  In this case progressive policies are largely at fault and must change, but these are the policies at the heart of Obama's thinking and which given his intellectual  rigidity he is unlikely to  alter.

Our most important task for returning poor urban neighborhoods to health is "the creation of large numbers of private sector jobs that relatively unskilled people can do," Mead argues.  He notes that the "days when domestic manufacturing anchored an emerging urban working class and provided a ladder into the middle class " are dead.  Obama's preposterous notion that vast numbers of unskilled urban  youths can be gainfully employed on "green projects' like creating solar panels and  retrofitting housing is quackery, a delusionary notion that he and his upper class supporters adore just as was the takeover of the auto companies in the belief that they could turn this industry (and with it Detroit and the UAW's fortunes) around.

The idea that manufacturing will return and save us is, I fear, a snare and a delusion.  The road is closed.  Foreign competition is part of the story, but technology is the real driver.  As factories become more automated, you can make more and fancier stuff with fewer people.  Ending free trade will wreck our economy and the world economy, put the world on the road to World War Three and give a boost to the robotics industry, but it won't bring back the days of high wage unionized manufacturing labor in the United States.

Generally speaking, manufacturing employment is going to shrink in the US over the medium to long term and large factories for big employers will be shedding workers as they update their technology rather than hiring.  GM and GE will not propel the next generation of Americans into the middle class.

No. contrary to the progressives' vision, the urban underclass will find jobs in small businesses (if ObamaCare does not destroy them first) and many will not be "particularly attractive" Mead adds. Such jobs are often "smelly and noxious"; often it will be casual employment with few benefits.  These jobs, like those of our grandfathers' time  are "bad jobs," but it's the only way for many to get on the ladder out of poverty.

To get these jobs, we have to change the way our cities work.  Essentially, we have created urban environments in which the kind of enterprises that often hire the poor - low margin, poorly capitalized, noisy, smelly, dirty, informally managed without a long paper trail - can't exist.  The kind of metal bashing repair shops that fill the cities of the developing world are almost impossible to operate here.  Plumbers, carpenters, electricians, pushcart vendors and day care operators need licenses; construction work has to comply with elaborate guidelines and city bureaucracies disgorge the required permits slowly and reluctantly.

[snip]

The combination of a tangled thicket of regulations that interact with one another in unpredictable ways and a bureaucracy that for whatever reasons cannot manage the process in a timely way is a massive job killer.  The number of small enterprises that have not started, of small businesses that have given up on expansions or on simple repair jobs deferred is incalculable but large.  Our cities are strangling themselves in red tape; we need to a better job of balancing the legitimate need for safety and health regulation with the need to promote enterprise and the kind of jobs that our fellow citizens can actually get.

Changing the way cities work matters a lot. If we want new businesses and new jobs in our inner cities, we are going to have to declare war on the cost structures of cities like New York and Chicago.  The tax load must come down drastically, implying both a reduction in government activities and a revolution in the way services are provided.  The forest of regulations that makes everything from opening a new business to repairing a building complex and expensive must be dramatically thinned.  If we are serious about creating conditions in which workers with poor skills can make a living inside great cities, we have to move away from regulations and practices which make it prohibitively expensive to do business there.

In fact, it's time to challenge the very notion that people who so hamstring development are  in any real sense 'progressive." They and the president  benefit a certain tier -- upper middle class citizens and overly compensated, well-cushioned public employee union members -- who whether they mean to or not are preventing job creation for all, but most especially for those most in need of work.