Unemployment: Best Stimulus Is No Stimulus
Jobs: The employment report for October wasn't much to write home about. But it did show the economy has added 1.5 million to private payrolls this year, all without any big-spending federal "jobs" program. Go figure.
In France during the G-20 meeting Friday, Obama blasted Republicans for their failure to pass another round of stimulus spending - this time dubbed a "jobs bill."
"The American people," he said in a statement, "deserve an explanation as to why Republicans refuse to step up to the plate and do what's necessary to create jobs and grow the economy right now."
Just one problem: Since Republicans took control of the House in January and secured enough votes in the Senate to block big spending bills, the economy has created 1.5 million private-sector jobs, according to the Friday report from the Bureau of Labor Statistics.
That's well above the 1.2 million created in all of 2010, when Democrats ran everything in Washington, and when stimulus money was still pouring into the economy. In fact, if you compare private job growth with stimulus spending, they practically move in opposite directions.
From the first quarter of 2009 to the second quarter of 2010, the feds pumped out nearly $500 billion in stimulus bucks (not counting all the other stimulus measures such as cash for clunkers, mortgage bailouts or Fed stimuli). Yet during those months, the private economy lost a total of 4.5 million jobs.
The pace of job growth picked up as the stimulus money decreased. In the last three months of 2010, for example, just $49 billion went out the door in stimulus money. Yet the private sector managed to create more than 438,000 jobs. And this year, private-sector job growth has averaged of 153,000 a month.
That came not only as the stimulus money dried up, but also at a time when Republicans tried to put the brakes on other new spending, shifted the entire debate in Washington toward cutting the national debt and blocked Obama's new $477 billion "jobs" act.
This might be uncomfortable news for big-spending Keynesians like Obama and liberal economist pals who remain convinced growth depends on never-ending stimulus. But it's an indication that when it comes to job creation, government spending is the problem, not the solution.
Now to be sure, 153,000 new jobs a month isn't enough to make headway against growth in the labor force - it climbed 181,000 in October, for example - much less reduce the ranks of the unemployed.
And the latest jobs figures show how agonizingly slow this economic recovery has been. By this point after the 1981-82 recession - which lasted nearly as long as the latest one and saw unemployment climb higher - the jobless rate had fallen to 7.2% from a peak of 10.8%.
President Obama keeps saying we "can't wait" to create more jobs. And he's right.
What Obama fails to understand is that we wouldn't have to wait for big job gains if government would simply get out of the way.
