The Obama Administration would have us believe that the newest jobs data (i.e. 200,000 jobs created in December, and 8.5% unemployment) is proof that the President’s economic policies are working. His top economic adviser dutifully said the newest report proves that “it is critical that we continue the (President’s) economic policies that are helping us dig our way out of the deep hole.” Who would expect Obama’s staff economist to say anything different?
But, a little more analysis of the data proves that rather than “healing” the economy, as Obama likes to say, his policies have worsened the recession and prolonged the recovery.
As a recent Investor’s Business Daily editorial explained, over the past 30 months the size of the labor force has actually shrunk by 843,000 people – 170,000 in just the past two months. That just doesn’t happen in America. At a similar point in the Reagan recovery of the 1980s the labor force had expanded by more than 4 million workers according to IBD.
The labor force participation rate (LPR) – the percentage of people employed or looking for work of the total age eligible population – is currently just 64%. As the following chart from the Bureau of Labor Statistics indicates, that is worse by far than when Obama took office in January 2009, and it is still trending downward. In fact, the current LPR is at the lowest level in nearly 30 years. It’s disingenuous to talk of recovery when continually more people are still leaving the work force, and it is nearly impossible to increase economic output until more – not less – people are productive workers.
Labor Force Participation Rate, 2009-2011
Source: Bureau of Labor Statistics
Simply put, millions of Americans are still so disillusioned, disappointed, and disgusted that they aren’t even trying to get a job. When adjusted for the abnormally low participation rate, “unemployment would be more like 11.5%,” according to the IBD editors.
In addition to the unemployed, millions of Americans can’t find the full-time employment they need. According to the Labor Department, more than 8 million Americans have only part-time employment – twice the normal level of the work force and showing no significant sign of returning to normal levels.
Obama certainly knows the truth behind the numbers. Whatever spin the Obama campaign tries to apply; the reality is there are still 6.2 million jobs destroyed by this recession that haven’t come back. As we previously explained on these pages, this is by far the deepest and already the most prolonged recovery of the eleven recessions since World War II. At the current rate of job creation, it will be May, 2016 before the economy recovers from the jobs deficit.
With an election just ten months away, the 6 million plus jobs deficit apparently means very little to Barack Obama. He’s obsessively concerned about saving only one job – his. So, as IBD explains, “the only way Obama can make these mediocre results look good is by setting the country's expectations so low than even a tiny step forward seems like a giant leap. He mustn't get away with it.”
On the night that he secured the Democrat nomination in 2008, Barack Obama arrogantly proclaimed it as “the moment when the rise of the oceans began to slow and our planet began to heal.” If true, that would put Obama in very exclusive company. “Moses made the waters recede, but he had help,” observed famed economist Irwin Stelzer.
The 2012 campaign version of Barack Obama has backed off the miraculous predictions. Now, it is all about lowering the bar – trying to convince voters to settle for less. That’s a pretty tough sell in America, and we think he’ll have about as much luck with that line as he did in getting the oceans to pay attention to him.