The Jobless Recovery: This time, it’s for real.

National Review ^ | 7/13/2009 | Jerry Bowyer

[SeekAndFind]

BuzzCharts spent much of 2003, 2004, and 2005 rebutting the media mantra that the U.S. was experiencing a “jobless recovery.” While unemployment rates bobbed between the upper end of 4 percent and the lower end of 6 percent, the press sang dirges about the “worst job market since Herbert Hoover.” So why is it that nobody seems to mention a “jobless recovery” anymore, especially with the unemployment rate marching toward 10 percent?

The data now confirm that we really are in a jobless recovery. Unemployment just hit 9.5 percent, with few signs of a momentum reversal. And we just passed a historic milestone: Our jobless rate has eclipsed that of France. And why not? American labor policy is rapidly mutating toward the Gallic model of wage floors, heavy unionization, and central planning, while French policy under Sarkozy is inching toward a supply-side formula for growth.

The interesting thing about this jobless recovery is that chainsaw personnel policy isn’t to blame. We’re not firing many people: Terminations have fallen to a fairly moderate level, and monthly layoffs have plunged in the last few months. Initial jobless claims also are falling. The problem is that we’re not hiring many people, either. It’s the Euro-model of non-dynamism — jobs can be neither created nor destroyed.

Meanwhile, we’re starting to hear calls for a second stimulus program. Let’s get the math right first. Under Obama, we just had the second stimulus program, since the first was launched under Bush last year. So we’re now discussing a third stimulus effort, with administration officials sounding the alarm: “The patient’s blood pressure is dropping. We need more leeches, stat!”

Truth is, we’re not mired despite the stimulus plan, but because of it. Entrepreneurs are not mindless beasts who simply expand operations when the government rings the fiscal dinner bell. They know today’s spending explosion will be financed by future tax increases. They know that every government check handed to a social worker, AmeriCorps “volunteer,” or United Auto Worker will be paid for, eventually, by the entrepreneurial and investor class — and they are planning accordingly.

They also know that their unemployment-compensation taxes will rise every time a stimulus plan extends unemployment benefits. Unemployment “comp” is run kind of like an insurance program: Each time one of your ex-employees gets a check, your rates go up. Who other than a community organizer, lobbyist, or solar-panel salesman would hire in an environment like this?

Health care figures in, too. If I’m going to be forced to offer an Obama-designed, gold-plated health-insurance plan to my employees (or face a penalty for each employee not so benefited), every person I hire is a potential long-term health-care liability. This already has begun with the changes to COBRA (a government health-care provision for laid-off employees) in Stimulus II. Wait until Obamacare arrives.

Want Euronomics? Get ready for perpetually high, Euro-style unemployment rates. Want low unemployment rates and robust American-style growth? Bring back the proven model of small government, spending restraint, and low tax rates.

— Jerry Bowyer is an economist, CNBC contributor, and author of the upcoming Free Market Capitalist’s Survival Guide.

[kindred]

[Want Euronomics? Get ready for perpetually high, Euro-style unemployment rates.]

America has stabbed itself in the heart by electing fools, liars and thieves to political power.
The chickens are coming home to roost under the communist democrat political powers that do all the wrong things to reverse economic collapse and actually are creating economic disaster by big government expansion into the once strong industrial power that America once had but forfeited with the democrat monsters they elected. And the smart capitalists are jumping ship to foreign nations where they have some freedom to operate without government mismanagement and severe taxations and their tax and spend economics.

[Havok]

The SH*T is Truly hitting the Fan.

See you in Amerika !

[Salo]

You just don’t like Hope and Change, racist! ;-)

[dblshot]

Even if GDP rises due to increased productivity of those who are working, the drain on the working to support the unemployed and higher taxes means a lower standard of living for everyone. Yeah, I'm glad I still have a job and I do worry that I could lose mine. Under the Obama/dem plan I do not see my standard of living increasing even though I make more at work. My expectations and hence motivation have changed from getting ahead to not falling behind. This is a very different mindset. From “Morning in America” to Mourning for America” in one work career.

[woollyone]

saw a bumper sticker this weekend...

Here come the DEMOCRATS
Hide your wallet and your guns

[ilgipper]

Is this a recovery? I don’t see it. I see businesses closing by the week. Restaurants, local stores etc. This is far from a recovery. The business world is frozen as long as there is threat of higher tax, regulation, government health care, etc.

[Psycho_Bunny]

Congress thinks it’s curing patient of the disease. Some are wondering if Congress is killing the disease and the patient. But what’s happening is Congress is curing the disease of the patient.

[william clark]

[yldstrk]

I can remember my dad shouting about “ pay a living wage...” and me replying that well if you are like me, I can’t pay a secretary at all, I am doing my job and the secretary job and that any secretary that agreed to work for me would not get “a living age” whatever the aitch he even meant by that

and my uncle breaking in and saying....yes but you could make millions while people looking for a job won’t and whoever wanted to go with you would get that...

and my dad, (who has commie leanings) just sitting there not knowing what to say

[expatpat]

why is it that nobody seems to mention a “jobless recovery” anymore

Because the economy is not in recovery.

[GOPsterinMA]

Agreed! Commercial real estate is tanking very badly. More and more you see the restaurant, the coffee shop the pool hall closed and boarded up. In one mall near me there is a closed down Circuit City, Dodge dealership and Tweeter, all within a quarter mile of each other. That’s a lot of empty and unproductive real estate.

If this is a recovery, what constitutes a depression?

[PreciousLiberty]

“If this is a recovery, what constitutes a depression?”

If the GOP retakes Congress in 2010, it’ll suddenly become a depression. ;-)

[11th Commandment]

A jobless recovery is like sex without an ..........

[GOPsterinMA]

For sure! Last year, 4.7% unemployment was the worst since The Depression, according to the Dems.

So what the hell do the Dems consider ~10%?

[jacknhoo]

Cloward-Piven.

[PreciousLiberty]

“So what the hell do the Dems consider ~10%?”

Good question. The equity markets are on a nice downtrend, we’ll see if they ultimately lose as much value as during the Depression. That will mean the Dow falling to around 1200.

I see that as quite a possibility, unless old 0bama decides he’s not FDR on steroids after all. Rising taxes, interest rates and inflation do NOT equal any kind of recovery.

[Sequoyah101]

On a drive through the East of Texas (not deep East Texas where unemployment is a way of life) and some areas are beginning to look like ghost towns. What is left of the oilfield is shutting down.

We can’t make it as a servcie economy. We have to make something and add value to the raw materials not just cycle money.

[GOPsterinMA]

Yep!