The November Jobs Report was Disappointing, but not surprising. The Economy, that has been on life support for all of the Obama presidency, shows no sign of real growth. The only thing that has grown significantly, under this administration, is the numbers of chronic unemployed. The United States stands at the precipice of 100 million not in the work force. A number that belies the false unemployment rate of 4.6%.
Despite what propaganda outlets like Media Matters claim, the best number of the year is not a good one. Of the 178,000 jobs created, 118,000 were part time. There is a good chance that many of these won’t last past the holiday season. Under reported, the number of those who dropped out of the workforce was 226,000. Good for Obama as they are not counted as part of the unemployment rate. For Americans, that means the report is a stagger step forward, and a full step back. Consequently, the labor participation rate now stands at 62.7, down from 62.8. Still on, ever more counter-productive, Fed life support, and slogging along with ever larger numbers of people permanently out of work, the Obama economy has never reached recovery status.
The economic malaise, like the artificial interest rates, has now become part of society. The new normal is multi-generational households, often containing millennials with sky high college loan debts. Obama’s balloons hyping hope and change have long ago deflated, and now fill trash cans along with the rest of his administration’s garbage. He will leave the country with a barely crawling economy, a staggering debt, and engaged in more wide spread wars than President Bush.
The incoming President will have his hands full trying to turn things around. It will take more than blackmailed tax breaks, and threats of tariffs, to improve the situation. While Donald Trump will likely do better than his predecessor on the economic front, that is not saying much.
For Trump, the greatest roadblock to a real booming economy will be his economic populism. The new VP said, “the free market has been sorting it out and America’s been losing.“ Nothing could be further from the truth. The economic reality over the last eight years has been one of crony capitalism, vengeful regulations, and financial mayhem. It is either ignorant, or being a demagogue, to describe the present situation as a failure of the free market. The deal struck to keep Carrier in the U.S. is not the answer either. It is simply not feasible to offer millions in tax abatement bribes to every company that threatens to move south. Such an arrangement is both a perverse incentive, and puts competitors at a comparative disadvantage.
The truth is, America has the best of nearly everything. A highly productive work force, the best transportation network in the world, cheap energy, access to state of the art technology, and skilled labor. The ready access to raw materials and spare parts alone is worth millions to those seeking to build plants here. The red tape, the complicated tax code, the over burdensome regulations, and the now perverse financial system are the roadblocks. Remove these and, as the say, they will come. In contrast, running around trying to put a finger in the dyke to prevent this, or that, company from moving is ridiculous. This is especially true at the federal level. Local governments, and even states, have been trying to lure companies to either, set up shop, or stay , through giveaways for years. Bandaids over cancer to be sure, but they have the right to do it.
On the other hand, there is a laundry list of things the federal government can and should do. Eliminating the EPA, and replacing it with a code board would be a start. A national environmental code, similar to the National Electric Code in scope, in place of the present out of control bureaucratic nightmare. Similarly, OSHA could be eliminated (most states have their own version anyway), it simply has no constitutional authority for most of what it does. If kept, it to should be nothing more than a code local inspectors can refer to. The National Labor Relations Board should go the way of the transistor radio. Tax codes could be made flatter, fairer and less cumbersome. Doing away with the financial nightmare caused by Dodd-Frank would free up billions for investment. Obamacare has a major negative impact as well. Than there is the energy sector. It has done well, despite being hog tied by the Obama administration. By freeing it up to dig more coal, drill more wells, and build more refineries and pipelines, millions of new jobs and billions of new revenue would be created.
The good news is much of this is being discussed, or in the planning stages. The bad is there is also a lot of populist crony capitalism being planned as well. A trillion dollar infrastructure boondoggle, increased ethanol subsidies, and counterproductive tariff schemes to name a few. The negotiator and chief is also talking about more Carrier type deals as well. It would be better to stick with kissing babies, than engage in this type of populist economics.
The incoming administration’s plans are a mixed bag. America can endure some of Trumpism’s bad side, if the new Commander and Chief gets enough of the good stuff done. Like with all things Trump, there is no way of telling which way the scales are going to tilt.
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