America now has the weakest labor market in a generation, and the American people know it. In a new CNN/ORC poll released this week, 65 percent of Americans say they disapprove of how President Obama is handling the economy. And even the White House has downgraded its expectations for the United States' economic future, as The Hill reports:
When the 'substantial' economic 'turbulence' of the last two months are [sic] considered, the administration expects the economy to grow as little as 1.7 percent in 2011 compared to last year. That is down from a rosier projection of 2.7 percent growth, made in February.
In truth, even a 1.7 percent growth rate would be remarkable at this point, given that the economy grew at an annualized rate of about 0.7 percent in the first half of the year and has since slowed. A 1.7 percent growth rate suggests a remarkable acceleration beginning immediately. More than remarkable, that's incredible.
But none of this is should be shocking news. Earlier this month, the Congressional Budget Office's mid-year assessment of the budget and economic situation, based on data through June and thus ignorant of the recent further slowdown, predicted that the jobless rate will fall only to 8.9 percent by the end of this year but remain above 8 percent until 2014.
If Americans want to return to full employment, which means unemployment would be around 5 percent, then they'll have to wait until 2018 if employers are infused with a new confidence and began hiring at the same average rate they did during the 2003–2007 expansion (+176,000 jobs per month). But 176,000 jobs per month is a far cry from the zero new jobs reported today.
And while the U.S. economy is creating no net new jobs, President Obama is offering no new ideas to fix the problem. In a speech to a joint session of Congress next Thursday, the President is expected to rehash the same expensive, ineffective policies he has tried since his presidency began. And it's an economic philosophy that America has come to know all too well. The President hopes that through the sheer force of spending taxpayer dollars, he can turn the economy around. It isn't working—and neither are nearly 14 million Americans.
Case in point: President Obama's "sunshot" initiative–his proposal to dump taxpayers' dollars into alternative energy projects with the goal of creating green jobs. It has failed, by all accounts. Even The New York Times reported that the President's promise to create 5 million green jobs over 10 years has proven to be nothing more than "a pipe dream." And this week, California-based solar panel manufacturer Solyndra went bankrupt, despite receiving a $535 million taxpayer-funded loan guarantee from the U.S. Department of Energy. End result? About 1,100 people out of work. But during his jobs tour across the Midwest, the President continued speaking of the promise of the green economy.
There's another old idea being bandied about, too–infrastructure spending. Remember the President's $780 billion stimulus, which included infrastructure spending on "shovel ready projects" all across the fruited plain? Despite the government infusion of cash into the economy, no jobs were created in August. As the President joked, "Shovel-ready was not as ... uh .. shovel-ready as we expected."Yet an "infrastructure bank" rumored to be endowed with up to $30 billion, appears to be a central component of the President's jobs plan next week, and more spending on building roads and bridges is one of Big Labor's favorite subjects, too. AFL-CIO president Richard Trumka this week called for America to spend $400 billion a year over 10 years on public works projects--and that money, conveniently, would directly benefit his union membership at the expense of the U.S. economy. Whether we need additional government spending on infrastructure is a debate unto itself. What is clear is that $30 billion spent over some number of years in an economy 500 times greater cannot make much difference.
The two-and-a-half-year Keynesian experiment of flooding the economy with taxpayer dollars has failed, yet the President and his union allies continue to peddle the myth that the only way to save the economy is to spend more. There's another way to go: freeing America's small businesses from the day-to-day shackles of existing over-regulation, freeing families and entrepreneurs of the threat of higher taxes, and cutting spending to eliminate the constraining fear of America's debt crisis. Zero job growth does not have to be America's reality, but changing course will mean ditching the dream that more government spending will save the day
