The chief of the Atlanta Federal Reserve said on Wednesday that the unemployment rate is actually 16%, “If one considers the people who would like a job but have stopped looking…”. Discouraged workers are one of the dirty little secrets of the Bureau of Labor Statistics (BLS). It’s a secret the Obama administration is happy to let continue on.
It is to be expected that people would eventually give up on looking for a job after spending months and months competing for fewer and fewer jobs. The longer a jobless period lasts, the more people drop off of the unemployment rolls. So the longer this lasts, the more the rate will appear to slow-down or even deceptively improve. The signs of improvement are not so and there’s more.
President Obama stated that the stimulus would create or save 2.5 Million jobs. According to the BLS, all we’ve seen is job losses since the start of this recession and that picture has not improved at all since the enactment of the American Reinvestment and Recovery Act (The Stimulus Bill). We were shown the fact the the unemployment rate stabilized in July to somehow back this up as jobs saved. Unfortunately, by reviewing the BLS statistics we see a different picture.
To get the real picture, we didn’t look at the deceptive unemployment numbers the government chooses to use. Instead, we analyzed the employment statistics. Basically, we looked at who had jobs in recent reports, and who has a job now then we broke-out the calculator.
For all 50 states (yes Obama, fifty), there were 134,300 fewer working people in August than in July. Where are the created jobs? We actually have the answer, and it has nothing to do with government stimulus.
We plotted the numbers state-by-state, then added in personal and corporate taxation as a factor. A not-so-surprising result appeared. States with less-than-median corporate tax rates, gained jobs – 13,600 of them. Wait, tax-incentives improve an economy faster than bottom-up government spending? Who would have thought, besides Reagan. It gets better.
States that had no personal income tax, gained 35,700 jobs. This can’t be. Obamanomics, Stimulus and bottom-up big-government, were supposed to stave off job losses, not Reaganomics. Evil, entrepreneurial, trickle-down only serves the greedy CEOs (and the 49,000 people that apparently got jobs in states that bothered to practice it).
It’s obvious that President Obama did not start the recession, but like Roosevelt, he is using big-government solutions to intervene and may have made it longer and more detrimental than it would have been if market forces had been allowed to work. This is another failure of bottom-up economics by the likes of Hoover, Roosevelt, Carter, now Obama – not great company if you want to be the savior of the economy. Due to the stimulus act and a monstrous influx of government money in to the private economy, this is now Obama’s economy – good or bad.
Just last month Vice President Biden told us that the Stimulus had performed better than his, “wildest dreams”. This is a continuation of the sales pitch to get America to buy a lemon. I’m betting more lemons are coming. Keep an eye out for extensions of unemployment benefits, an extension of the first-time home-buyers credit, and… heaven forebid… ARRA 2: The Mother of All Stimulus Bills.