Morning Bell: The Jobless Obama Recovery

Conn Carroll / June 04, 2010

This Wednesday in Pittsburgh, President Barack Obama defended his administration’s economic policies telling the audience at Carnegie Mellon University: “Now, I’ve never believed that government has all the answers. Government cannot and should not replace businesses as the true engine of growth and job creation.” But that is exactly what the President’s big government policies are doing. Last week, USA Today reported that in the first quarter of 2010, thanks to President Obama’s failed $862 economic stimulus, paychecks from private business shrank to their smallest share of personal income in U.S. history while government-provided benefits — from Social Security, unemployment insurance, food stamps and other programs — rose to a record high.

And now the Labor Department’s Bureau of Labor and Statistics released its monthly jobs report today showing that the economy added 431,000 jobs in May. But don’t let that number fool you. Of those 431,000 jobs, 411,000 jobs were temporary government Census jobs. In fact, private sector job growth actually fell in May, from 231,000 new private sector jobs in April to just 41,000 new private sector jobs in May. Combining the private and public sectors–the nation’s unemployment rate fell to 9.7% as 286,000 workers left the labor force. In total the U.S. economy has now lost a net of 2.2 million jobs since President Barack Obama signed his stimulus bill and his administration is now 7.2 million jobs short of what he promised the American economy would support by 2010.

While there is little doubt our resilient economy is finally recovering, it is also becoming increasingly clear that this administration’s policies are making it difficult for private sector firms to produce robust job growth. Obamacare not only raises taxes by $503 billion through 2019, but it also burdens small businesses with new 1099 IRS paperwork every time they do more than $600 in business with another entity, and it imposes an employer mandate which makes it harder for small businesses to hire new workers. Then there is Obama’s budget which raises taxes on the small businesses that earn 72% of all small business income, raises capital gains taxes to 20%, and raises taxes on dividends to 39.6%. And don’t forgot the recently passed tax bill in the House which manages to add billions in debt while adding on a job-killing tax on American corporations that compete overseas and a job-killing tax on innovation-creating venture capital partnerships. (more…)