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It should be no surprise that May saw the biggest leap in jobs in 10 years because of the Census, which is done every 10 years, a government program that contributed 411,000 of the 431,000 jobs added in the month. Only 41,000 private-sector jobs were added. All scary numbers, as new spending and the regulatory vaporware from legislation such as health reform and potential cap and trade will add to labor costs.
Putting the Census workers in the context of the size of the workforces in other industry sectors shows you what is going on. We now have many more census workers that many of the US's most important industries. For a comparison, see below.
President Obama now avers in a recent speech at Carnegie Mellon University that without the government's massive spending, the economy would have tipped into a downturn akin to the Great Depression.
The US economy has a pulse, though arrythmic, as businesses across the country sit frozen, panicked over how the regulatory vaporware in the reforms DC has unleashed will potentially vaporize profits, which is largely why a hiring strike continues.
And thanks to the drone of the President's downbeat meassage, the economy is bicycling through quicksand. America will always heal itself, that's the beauty of this great nation. The country though is now on a distracting Magical Mystery Tour through the boobytraps set by D.C., whose fiscal antenna fell off the roof of the Capitol Dome some decades ago.
"When market processes lead us to see light at the end of the tunnel, the government sometimes adds more tunnel," is a powerful theme of a new report from Jason E. Taylor, professor of economics at Central Michigan University. and Richard K. Vedder, distinguished professor of economics at Ohio University and adjunct scholar at the American Enterprise Institute.
We now have about as many or more Census workers than we have building homes in the United States, delivering our mail, or providing the power to our homes and businesses, says Fox News analyst James Farrell.
There are about 3.4 times as many Census workers as there are extracting oil and gas in the United States.
After the hiring of 411,000 temporary Census workers in May, the total Census workforce has now increased to 564,000.
To put this in some context, we now have more Census workers that new have workers in the following industries /sectors: - Oil & gas extraction (165,700) - Electronic & appliance stores (480,600) - Air transportation (456,300) - Rail transportation (216,300) - Utilities (557,400)
We have almost as many Census workers as we have workers in the following industries/sectors: - Residential construction (580,800) - U.S. postal service (657,700) - Child care (861,800) - Accounting / bookkeeping (899,800)
All of this data comes from the Bureau of Labor Statistics report, “THE EMPLOYMENT SITUATION –MAY 2010,” June 4, 2010,
The two economists Vedder and Taylor warn: "It is clear that the government stimulus has not provided any kind of positive placebo-type effect on consumer and business confidence." They add that "survey data show that measures of confidence continue to linger around the lowest levels seen in a generation."
Another fact check from Farrell: During the health care summit on February 25, 2010, Democrat House Speaker Nancy Pelosi defended the health care reform bill by saying it was really a “jobs bill” that would create 400,000 jobs “almost immediately.”
Speaker Pelosi added: “So this bill is not only about the health security of America. It's about jobs. In its life it will create four million jobs -- 400,000 jobs almost immediately; jobs, again, in the health care industry, but in the entrepreneurial world as well.”
But since the health care reform bill was signed at the end of March 2010, what have we seen? Fox News analyst Farrell reports: - the nation’s unemployment rate has remained at 9.7% (same as March); - the number of unemployed Americans has declined by only 32,000 and remains at approximately 15 million (15,005,000 in March and 14,973,000 in May); - the number of long-term unemployed (27 weeks or greater) has increased by 216,000 and the median duration of unemployment has jumped by 3 weeks (from 20.0 weeks to 23.2 weeks) – an increase of 16%; - private employment has increased by 259,000 over the last 2 months, but the private sector only added 41,000 jobs in May; - the health care sector has added 26,200 jobs over the last two months. However, this represents a slowing in the hiring of health care workers. In the 11 months prior to President Obama signing the health care reform bill, the health care sector had grown by an average of 20,245 jobs per month. The last 2 months, only 13,100 jobs per month: a 35% decrease in the rate of hiring of health care workers.
Where have we seen the 400,000 “immediate” jobs the Speaker promised? You guessed it: Census temp workers. The federal government has hired 459,000 temporary Census workers in the last two months.
So where did such activist governments and Keynesian-style stimulus policies get us in the past? Economists Taylor and Vedder took a look at how the government responded with massive government spending after economic downturns in the 1960s and 1970s, and what happened in ensuing years. Taylor and Vedder note in their report that "while Keynesianism fell out of style during the 1980s and 1990s—recall that Bill Clinton's secretary of treasury Robert Rubin turned Keynesian economics completely on its head when he claimed that surpluses, not deficits, stimulate the economy — during the recessions of 2001 and 2007-09 Keynesianism has come back with a vengeance." They add: "Both Presidents Bush and Obama, along with the Greenspan/Bernanke Federal Reserve, have instituted Keynesian-style stimulus policies — enhanced government spending (Obama's $787 billion package), tax cuts to put money in people's hands to increase consumption (the Bush tax "rebate" checks of 2001 and 2008), and loose monetary policy (the Federal Reserve's leaving its target interest rate below 2 percent for an extended period from 2001 to 2004 and cutting to near zero during the Great Recession of 2007-09 and its aftermath)."
But what did all of this get us?
The two economists note: "A decade far less successful economically than the two non- Keynesian ones that preceded it, with declining output growth and falling real capital valuations. History clearly shows the government that stimulates the best, taxes, spends, and intrudes the least. In particular, the lesson from 1945-47 is that a sharp reduction in government spending frees up assets for productive use and leads to renewed growth."
Elizabeth MacDonald is the stocks editor for Fox Business Network. She is recognized as one of the top prize-winning business journalists in the country, and has received 14 awards, including the top prize in business journalism, the Gerald Loeb Award for Distinguished Business Journalism, and the Newswomen's Club of New York Front Page Award for Excellence in Investigative Journalism.
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