“The White House Does Not Create Jobs”

The Heritage Foundation

Morning Bell: “The White House Does Not Create Jobs”

Rory Cooper – August 5, 2011 at 9:42 am

Never were truer words spoken. At yesterday’s press briefing, White House spokesman Jay Carney admitted: “The White House does not create jobs.” As the Examiner’s senior political columnist Timothy P. Carney (no relation) later noted, conservatives should greet this statement as “a true and long-awaited admission of government’s limits.”

Despite the now-admitted fact that the President does not create jobs, President Obama continues to manipulate the economy from the West Wing, offering “stimulus” here, threatening higher taxes there, and picking and choosing which industry can thrive and which cannot under his watch.

The government cannot create private-sector jobs, but it can strongly affect the conditions for job-creating economic growth. But instead, the Obama Administration has helped create the conditions to stifle job growth. This morning, the unemployment rate was 9.1 percent. The positive news was that the unemployment rate went down from 9.2%.

However, Heritage expert James Sherk puts this job growth rate into perspective, noting: “The economy needs to add between 100,000 and 125,000 jobs per month to keep pace with population growth. Unemployment will rise if employers consistently create fewer jobs than this.” Stagnant growth that barely keeps pace with population growth proves once again that Obama policies simply aren’t working. In fact, they’re making the recovery more difficult.

Nobody trusts that better conditions and certainty will emerge soon, especially not the markets. The Dow Jones Industrial Average plummeted yesterday, closing down 512 points, erasing all gains made to this point in 2011. The NASDAQ and S&P also lost roughly 5 percent on the day. The White House’s reaction to the biggest one-day drop since 2008 was: “Markets go up and down.” Yet, investors are worrying about anemic growth, economic weakness, financial turmoil in Europe and Obama’s economic interference.

So what are just some of the job-killing conditions that are making the markets and employers nervous?

Obama’s Energy Policy: More than one-third of the drilling rigs in the Gulf of Mexico in 2009 left after the President’s moratorium. If the White House simply didn’t interfere, additional production from deepwater wells could generate 411,000 more barrels per day—providing jobs and lower gas prices.

Obama’s EPA Regulations: Heritage Visiting Fellow Andrew Grossman explains that the EPA forces businesses to “waste tens or hundreds of billions of dollars per year on environmental upgrades of dubious value mean[ing] that money isn’t available to invest in business expansions or create jobs. Higher costs also cut down on business investment—a factory that makes economic sense at a cost of $10 million may not when EPA regulations have jacked the cost up to $30 million.” These regulations are costing America millions of jobs.

Union Interference: At the behest of unions, the National Labor Relations Board (NLRB) is attempting to eliminate thousands of Boeing jobs in South Carolina because it is a right-to-work state. The NLRB is also pushing for “snap elections,” which would prevent workers from hearing counter-offers to unionization efforts. Unions are also aggressively lobbying against free trade agreements that have been languishing in Washington since President Bush left office. These agreements would create hundreds of thousands of jobs.

Obamacare: Obamacare makes labor costs uncertain. Every day brings more bad news as the details of the legislation emerge. Before Obamacare was enacted, private-sector job creation was averaging 67,600 jobs per month. After the law was signed, this number plummeted to 6,400 jobs per month. It’s no wonder 57 percent of Americans want to see the bill repealed.

The Threat of Higher Taxes: President Obama spent the past month promising that any debt deal would include tax hikes on job creators. When he failed to get those through Congress, he promised they would be part of the “special committee” recommendations. This is now the fourth major push of the Obama Administration to raise taxes on small business owners and investors. The first three attempts failed in Congress and in the court of public opinion, but this push will include the self-destructive leverage of putting the funding of our nation’s security at risk.

Runaway Spending: After the debt deal was signed earlier this week, the President’s first order of business was a fundraiser in Chicago. At the $35,000/plate dinner, Obama told guests: “Precisely because we were inheriting so many challenges, that we’re not halfway there yet. When I said ‘change we can believe in’ I didn’t say ‘change we can believe in tomorrow.’”

One wonders: is “halfway” to where? President Obama inherited a 7.8 percent unemployment rate. Unemployment has now been above 9 percent for all but two of the last 27 months.

Obama inherited a $10.6 trillion national debt. It is now over $14.5 trillion. President Obama’s 2012 budget proposal would have more than doubled this in less than 10 years. It took President Bush eight years to add less than $5 trillion to the debt. Just this week, a newborn baby’s share of the national debt went from $45,000 to $46,700.

And just yesterday, with $238 billion in new borrowing just since Tuesday, the total debt of the federal government became equal to the size of our economy (i.e., the debt-to-GDP ratio hit 100 percent). That is, if we wanted to wipe out the public debt, it would take all of the goods and services the country produces in a year to do so.

So, no, this White House does not create (or save) jobs. But it is also crystal clear looking at Administration policy—coupled with unemployment as well as increased debts and deficits—that it also does not produce the conditions to create jobs.

President Obama should work with Congress to get Washington spending under control, withdraw the threat of higher taxes, enact real entitlement and tax reform that removes uncertainty from the economy, and heed the lessons of the past.

It can be done. The Heritage plan for “Saving the American Dream“ proves it. But the President and liberals in Congress instead continue pushing job-killing tax hikes and more federal over-spending and over-borrowing. The only economic numbers these actions will increase are spending, borrowing, taxes, and unemployment.

TexasBlue wrote:

Obamacare: Obamacare makes labor costs uncertain. Every day brings more bad news as the details of the legislation emerge. Before Obamacare was enacted, private-sector job creation was averaging 67,600 jobs per month. After the law was signed, this number plummeted to 6,400 jobs per month. It’s no wonder 57 percent of Americans want to see the bill repealed.

Doh!

No kidding!

And the stomach churns.........

TexasBlue wrote:And the stomach churns.........

It does indeed my friend... it does indeed. Let us cross our fingers for 2012.

Here's an article about how the government creates jobs. A case made by a Tea Partier, if you can imagine that.

http://www.economist.com/blogs/democracyinamerica/2011/08/stimulus-thinking

BubbleBliss wrote:
Here's an article about how the government creates jobs. A case made by a Tea Partier, if you can imagine that.

http://www.economist.com/blogs/democracyinamerica/2011/08/stimulus-thinking

Can't do that. It's military spending.

Still proves the point that the government does in fact create jobs with its spending.

They've done a fine job in the last 2 years and 7 months, haven't they? So much so that we've been at 9% unemployment or above for 2 years.

BubbleBliss wrote:Still proves the point that the government does in fact create jobs with its spending.

Yes, the government can create jobs by spending federal dollars. The problem is that those jobs are always temporary. Once the ships are built, the workers go back on the dole. Once the highway, bridge or dam is finished, there go the jobs.

It's not a matter of whether or not government spending can create jobs - clearly it can. But government projects are not a solution to long term unemployment and economic growth.

And, in point of fact, government spending on defense is a valid, constitutional role of the federal government.

Spending our tax dollars on teaching Chinese prostitutes how to drink more responsibly is NOT a valid, constitutional expenditure of federal dollars.

So, while there is a grain of truth to the observation that government spending can create jobs, it misses the larger point - and that point is that government spending can only do so much and over doing it leads to serious problems, as can witness today.