As the election draws closer, the two most closely watched economic indicators are the unemployment rate and the number of jobs created. On June 1, the Bureau of Labor Statistics issued bad economic news. The number of jobs created was only 69,000 and the unemployment rate increased from 8.1 to 8.2 percent. In a presidential campaign, the difference between an 8.2 and a 7.5 percent unemployment rate or a month of 250,000 jobs versus 69,000 can be the difference between re-election and defeat.
The die is already cast. Obama bet all his money on Keynesian stimulus propped up by super-expansionary monetary policy, the Detroit
bailout, and extensions of unemployment insurance. He has nothing left
other than infrastructure projects, subsidies for state teachers and
first responders, and a feeble jobs credit for small business. The one
move that could turn things around quickly — extension of the Bush tax
cuts – would deprive Obama of his prime campaign message that “the rich
must pay their fair share.”
In a piece dated August 28, 2011 Why Obama Cannot Support a Real Jobs Program,
I laid out an anti-Keynesian jobs program to create jobs and lower the
unemployment rate. The third point in my program read “to create
economic conditions that encourage businesses to hire and the unemployed
to seek and accept jobs.” To do this, I advised not to extend
unemployment benefits and to reduce the minimum wage, particularly for
youths. The President did not follow my advice and look where he is now.
I wish to throw the social security disability into the mix of
anti-job programs. The disability program is not the creation of the
Obama administration, but Obama appointees have set and interpreted its
policies for more than three years. Let’s examine their record:
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