Austerity Is Not to Blame for Tepid Job Growth
Politics: Democrats were quick to blame the anemic March jobs number on the "sequester" spending cuts. If that were the case, what explains the previous four years of lousy job growth under Obama?
At 88,000, the jobs growth in March was well below expectations. And while the unemployment rate dropped, that was the result of hundreds of thousands dropping out of the labor force who as a result aren't counted as unemployed.
Democrats, of course, tried to pin the blame for this on Republicans for allegedly pushing austerity measures.
White House economic adviser Alan Krueger complained that "arbitrary and unnecessary cuts to government services will be a head wind in the months to come."
His predecessor in that job, Austan Goolsbee, worried that "maybe the sequester's a bigger deal than people thought it was."
And Sen. Majority Leader Harry Reid argued that "self-inflicted setbacks like the sequester" were behind the tepid jobs growth.
It didn't take long for the Democrats' amen chorus in the press to run with this spin.
"Friday's jobs report is the first to reflect the post-sequester world," is how Politico put it.
The Huffington Post said "austerity may be starting to squeeze the life out of the job market."
Just one problem: There's nothing unusual about this month's jobs report, and there's been no austerity.
From the start of the Obama "recovery" nearly four years ago, job growth has been week. In fact, job growth has averaged just 100,000 a month, and in 16 of the 45 months since June 2009, it's been under 100,000.
Nor is the March drop in the labor force participation rate unusual. In fact, it had been steadily falling all along, as Obama's anemic jobs recovery led millions to retire early, give up looking for work, or go on government disability programs.
By the end of last year, the labor force participation rate was down to 63.6% from 65.7% when the recovery started. And it's fallen each month so far this year.
The sequester isn't to blame for any of this, since the spending cuts have barely begun to take effect, and even by the end of the year will amount to a mere one-half of one percent of GDP.
Plus, that spending trim will only slow, not reverse, spending growth. In fact, federal outlays in the first five months of this fiscal year are up 2% from the some time a year ago, according to the Treasury Dept., and deficits already total $493 billion - which, by the way, is more than any given year under the Bush administration.
State spending, too, has been on the upswing, and government at all levels added 5,000 jobs in March.
The real reason for the anemic job growth under Obama has nothing to do with spending cuts, and everything to do with the aggressively anti-business climate Obama has created.
Indeed, given his out-of-control regulations, tax hikes on businesses and investment, and the looming catastrophe known as ObamaCare, it's a wonder businesses are hiring at all.