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Obamanomics: Decreased Productivity = More Jobs

Launching his “White House to Main Street” tour, President Barack Obama spoke at Lehigh Carbon Community College, north of Allentown, Pa., last Friday. During his prepared remarks, he noted that while the economy seems to be growing again, unemployment still hovers in double digits because companies won’t staff up. Then he offered this explanation:


Now some of this is because they’re still trying to get out of the red brought on by tough times this year and they’re still seeing consumers pull back because people got overextended on their credit cards; those home equity loans suddenly didn’t look so attractive.  And so people are spending a little bit less.

But part of what’s happened also among a lot of companies is they figured out how to squeeze more productivity out of the workers that they’ve got; they’re working people longer hours, they’re doing more overtime, or not, but either way they’re producing the same amount of product or providing the same services without hiring more people.

And that’s something that we’re going to have to really work on. [emphasis added]

Look at that last sentence again. The president believes that increased per-employee productivity is a problem that he needs to “work on.” In other words, the president sees his challenge now as how to get the American worker to be less productive, so that companies require more employees to maintain current output.

Indeed, existing workers are putting in slightly more time, as the Chicago Tribune reports: “Economists were encouraged by an increase in the average workweek to 33.2 hours from 33, which was the lowest on record.”

But the new Obama crisis is that these same workers are producing more goods and services. The president seems to believe that greedy corporate bosses have not only driven their fatigued wage-slaves to put in an extra 12 minutes per week, but that they’ve also “squeezed” them for more output per minute, thus assuring the unemployed will remain sedentary.


This “problem,” of course, already has a couple of tailor-made solutions within the president’s worldview: academia and labor unions.

If any industry has figured out how to get Americans to produce fewer goods in more time at a higher cost per item, it’s labor unions. For decades, the United Auto Workers (UAW)  has partnered with GM, Chrysler, and Ford to reduce productivity while increasing employment.

Now GM and Chrysler have teamed up with the U.S. government, using that same recipe to keep the Treasury teetering on the brink of insolvency, the national debt skyrocketing, and the currency feeble — thus promoting decreased productivity even outside of the auto industry.

Case in point: while most bailed-out financial sector firms seem likely to repay their loans to the Treasury, the New York Times reported that GM and Chrysler won’t, thus causing a net loss of about $30 billion for taxpayers.

Oddly enough, during the first stop of the president’s “White House to Main Street” lecture tour, the president condemned the entire financial services industry as greedy and irresponsible:

PRES. OBAMA: So there was just a lot of funny business going on, on Wall Street, and everybody was participating up and down the line because they were all making a lot of money. [emphasis added]


While the president lavished criticism on the financial services sector, on the health care sector, on the previous administration, and on Congress, somehow, during 45 minutes of talking about jobs, he didn’t even mention organized labor — not once.

How can organized labor help to “solve” the high productivity crisis?

President Obama’s top “outside’ adviser,” Service Employees International Union (SEIU) boss Andy Stern (king of the White House frequent-visitor list), will likely suggest collective bargaining agreements under ever-looming strike threats, increased compartmentalization of job responsibilities, higher wages, sweeter benefits, longer breaks, and the like. These measures would indeed reduce per-worker productivity, averting the crisis.

But let’s not put all of our hopes for slashing productivity on organized labor.

If the union model doesn’t git ‘er done, all the president has to do is figure out how to make business people think more like academics. His university experience would lead him to believe that the more navel-gazing you do, the more you get paid, and the more secure your job becomes. Perhaps the average American worker needs the lure of tenure to take his shoulder off the wheel, allowing him to focus on thinking great thoughts and sharing them in low-circulation journals. This would force companies to hire more people to do the actual work.


In his Lehigh County speech, President Obama credited universities and government with creating the great middle class after World War II. He also called community colleges “America’s most under-appreciated asset.”

He said nothing about the ever-escalating cost of a college degree — a product so expensive that only 27% of Americans own one.

And while health care has advanced by leaps and bounds, producing results that 20 years ago would have been classified as miracles, higher education offers no comparable progress. Some would argue that its quality has declined. (Exhibit A: the academics who staff the Obama White House.)

The president did not lambaste greedy academics for the “funny business” that has made a college degree the exclusive province of the wealthy, the brilliant, and the highly-leveraged — those who borrow their way through, hoping for sufficient future income to repay tens of thousands of dollars in student loans.

So the president, a college professor who has never run a business or even worked in the private sector, now believes he can accelerate employment growth by decreasing worker productivity through executive fiat, or perhaps through another 2,000-page piece of legislation.

Only a man with no private-sector experience (or one who’s intentionally trying to bring the United States to her knees) could speak like this:


PRES. OBAMA: Now, it’s typical that it takes time for job growth to catch up with economic growth. And it’s typical that it takes a little more time to come out of a recession when it comes to hiring. But Americans who’ve been desperately looking for work for months — some of them maybe for a year or longer — they can’t wait.  And we won’t wait. We need to do everything we can, right now, to get our businesses hiring again so that our friends and our neighbors can go back to work. (Applause.) [emphasis added]

Our “chief academic officer” and his faculty (formerly called cabinet), who are 93 percent free of private-sector taint, ignore economic realities and natural business cycles. They think that if they just pull the correct lever on the giant Econom-o-tron machine at the White House — pushing new requirements onto employers and saddling taxpayers with more debt — the job market will react favorably with no unintended consequences.

In this worldview, if economic reality says that job recovery lags behind other prosperity measures, all the president needs to do is crank up the employment potentiometer, thus forcing the invisible hand of capitalism, against its will, to produce more jobs.

Oddly enough, the federal Econom-o-tron does have one rheostat that, if dialed back, would actually accelerate employment growth soon. Permanent cuts to corporate and personal income taxes free up investment cash, which private firms can use to ramp up employment. More cash in the pockets of individuals and their companies also spurs buying, and thus pushes demand for goods and services, again boosting employment.


Mr. President, the U.S. does not have a crisis of high productivity.

If you want to accelerate jobs growth, follow a basic rule of aerodynamics: to increase speed, decrease drag.

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