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Obama’s Economy: The Excuses Begin

Blame everything, except the government's policies. Also read: Shrinking Economy? The GOP Built That

by
Tom Blumer

Bio

January 30, 2013 - 12:00 am

Just days after the November presidential and congressional elections which gave President Barack Obama a non-mandate of 50.6% of the popular vote and the demonstrated supported of less than 27% of all U.S. adults, NBC’s Brian Williams actually told viewers:

With the election now over, it is once again safe to talk about the economy and jobs. Now that it is not a campaign issue, it’s back to reality.

Still in Democrat-supportive campaign mode, Williams then introduced a report by correspondent Harry Smith about how “the idea that manufacturing in America is dead … is an outright falsehood.” Mary Andringa, president and CEO of Iowa manufacturer Vermeer Corporation and then-board chair at the National Association of Manufacturers, told Smith:

What’s really outstanding is the fact that in 2010, the U.S. had an output of $4.8 trillion of manufactured goods. That was up from $4.1 (trillion) in 2000 — and we’ve been through two recessions in the past decade.

That is undoubtedly an impressive achievement which should not be discounted. But then Smith delivered the kicker:

Five million manufacturing jobs were lost in the U.S. in the last decade. But new jobs have been created too, and believe it or not, many manufacturers in the U.S. are looking for help.

This highlights two problems. The first, which is that our educational system and culture are not preparing enough people for the jobs which need to be filled, is self-evident to anyone with open eyes.

The second, despite the unfilled positions just noted, is even more important: unlike what occurred after every other post-World War II downturn, not enough new jobs are currently being created to make up for the ones being lost. The new companies and entire industries which have always emerged and generated enough new jobs to replace those lost as a result of increased productivity in existing industries aren’t appearing at a rate necessary to reduce unemployment to an acceptable level.

Why not?

At the Associated Press, aka the Administration’s Press, the post-election search for an explanation clearly had two important constraints. First: do not blame the Obama administration or the federal government for anything. Second: find something to blame which appears to be plausible and can’t be immediately refuted.

What resulted was a three-part series bemoaning the rapid advancements in technology and smart machines. It can be summarized in four words: “This time it’s different.” Well, it sadly is, and more than likely for the next four years, but not for the reasons AP cites. AP’s premise:

For decades, science fiction warned of a future when we would be architects of our own obsolescence, replaced by our machines. … [T]he future has arrived.

The team which produced the report believes that technology is advancing so quickly and on so many fronts that it’s simply unreasonable to expect new jobs to appear fast enough to replace the ones being destroyed.

While the pace and nature of tech advancements have been and continue to be phenomenal, the notion that they  are unique to the point of causing insurmountable economic and employment problems should be absurd. As economist and George Mason University Professor Walter Williams pointed out in a 2011 column:

(In) 1900 … about 41 percent of our labor force was employed in agriculture. By 2008, fewer than 3 percent of Americans were employed in agriculture. … [O]ur farmers are the world’s most productive. As a result, Americans are better off.

In 1970, the telecommunications industry employed 421,000 workers as switchboard operators, annually handling 9.8 billion long-distance calls. Today the telecommunications industry employs only 78,000 operators … (processing) more than 100 billion long-distance calls a year.

Fifty years ago, a typical textile worker operated five machines capable of running thread through a loom 100 times a minute. Today machines run six times as fast, and one worker can oversee 100 of them.

You say, “Williams, certain jobs are destroyed by technology.” You’re right, but many more are created.

Defying Professor Williams’ optimism, AP’s team of reporters left readers with three unacceptable choices as to what will result:

  1. The best-case scenario is that “the economy returns to health after a wrenching transition.” AP quotes leftist economist Joseph Stiglitz as claiming that it will take at least “half a decade,” meaning after Obama’s time in the White House has (hopefully) ended. How convenient.
  2. “The economy continues to produce jobs, just not enough good ones.”
  3. “Technology leads to mass unemployment.”

If this “blame tech” mantra sounds mildly familiar, it’s because Obama himself has on a few unguarded occasions commented on how technology has destroyed jobs, indicting ATMs, airport kiosks, and the Internet for sending bank tellers, airline reservation agents, and others to the unemployment line. Apparently, never to return except perhaps as burger flippers or cashiers. I fear that the AP’s decision to identify tech as the scapegoat is no mere coincidence, and may foreshadow foolish attempts by the administration to slow down technological progress in the name of “saving jobs.”

Obamacare is already slated to do that very thing to the entire healthcare sector.

With all due respect to Professor Williams above, he would be right about enough replacement jobs being created if we were living in a genuine free-market economy. Unfortunately, that’s not where we are in this nation. Virtually all of the reasons why sufficient job growth isn’t occurring can be traced to the Obama administration’s market-hostile economic policies and postures.

Here are ten of the most obvious out of a list which could easily reach several dozen:

  • The war on fossil fuels, which has limited job growth in energy-related industries and caused prices to be higher than they should be for everyone else.
  • Cronyism on steroids.
  • Trillion-dollar deficit spending.
  • New bureaucracies like Dodd-Frank’s Consumer Financial Bureau, which Congress can’t legally touch.
  • Sarbanes Oxley, a relic of the 2001 Enron debacle which the administration has done nothing to reform, and which has closed off the going-public option for many companies which would have done so before “Sarbox” became law.
  • Unemployment and other government benefits which make remaining unemployed relatively attractive, or a least a more tolerable circumstance than it should be, and for a longer period of time than should be necessary.
  • Onerous labor laws and regulations. I’ve spoken with many entrepreneurs in the past year, some of whom have had employees in the past. A vast majority of them have told me that they won’t hire any new employees in the current regulatory environment, even if the economy improves. Most start-up entrepreneurs likely feel the same way.
  • Trade policy, a problem which spans the past four administrations but is being most acutely felt now.
  • Federal, state, and local tax increases.
  • Last but certainly not least, Obamacare, especially its career-killing definition of a full-time employee as anyone who works 30 or more hours per week, and the destructive impact it will have in slowing medical innovation and research to a crawl.

What the AP series really tells us is that the economy wasn’t performing as well as the government and the establishment press claimed it was during the presidential campaign — something I believe this week’s report on fourth-quarter gross domestic product will confirm — and that the White House really doesn’t expect the malaise to lift during most of Obama’s second term.

Also read: Shrinking Economy? The GOP Built That

Along with having a decades-long career in accounting, finance, training and development, Tom Blumer has written for several national online publications primarily on business, economics, politics and media bias. He has had his own blog, BizzyBlog.com, since 2005, and has been a PJM contributor since 2008.
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