Today’s Awful No-Good Job Numbers

Ouch:

The job market hit a major roadblock last month, as hiring slowed to a crawl and the unemployment rate unexpectedly rose.

The economy gained just 18,000 jobs in the month, the government reported Friday, sharply missing most expectations and coming in even weaker than the paltry 25,000 jobs added in May.
It marked the weakest month since September, when the economy was still losing jobs.

Unemployment is up to 9.2%.

Everyone is trying to blame everyone on this. I think they’re all half-right. It’s clear that the stimulus — now $4 trillion and growing — hasn’t had anywhere near the promised effects. However, the extension of the Bush tax cuts and unemployment benefits, as well as the demand-side cut in payroll taxes has not had a positive effect either. We have the lowest level of taxation in over half a century and the economy continues to stall.

I’ve noted before how I think we need to go about creating jobs. More stimulus spending is simply going to send us down the road Japan followed and mindless tax cuts are only going to worsen our biggest problem — the deficit. We have to stop playing games. As I said in the previous post:

Close the deficit, even if it means broadening the tax base.
Overhaul the tax code.
Repeal Sarbanes-Oxley.
Sign the pending free trade agreements.
Create a process to identify and remove the most damaging regulatory provisions.
Suspend Obamacare or allow HSA’s to qualify.
Suspend Davis-Bacon provisions.
Reduce the employer contribution on payroll taxes.

There are signs of progress on the first one. But it critical that the Republicans and Democrats agree to a grand bargain. Given the job numbers, it would be insanity to crash the debt ceiling and hope that nothing bad happens.

Update: Looking deeper, the problem is that while the public sector is shedding jobs, the private sector, while growing is not growing fast enough to pick up the slack. In some ways, this is not a bad thing. The public sector was bloated and, like the housing sector, needs to shed its fat before things get moving. But in other ways it demonstrates precisely the problem: we’ve made it more difficult for the private sector to hire people. Think of the regulations and obstacles we’ve put in place as an anchor on hiring and imagine the linked graph without that anchor.

Comments are closed.

  1. AlexInCT

    Everyone is trying to blame everyone on this. I think they’re all half-right. It’s clear that the stimulus — now $4 trillion and growing — hasn’t had anywhere near the promised effects. However, the extension of the Bush tax cuts and unemployment benefits, as well as the demand-side cut in payroll taxes has not had a positive effect either.

    Right, the problem isn’t unsustainable government spending out of control, it’s that some people aren’t “smart” enough to figure out that letting the same hucksters that think more government spending on things that make people dependant on them is the way to increase their power, take even more money while promising to get their spending under control, but then only long after they are out of office. Besides, why would letting people keep more of their money encourage them to invest in anything to up that intake? It’s not like that has ever worked before…

    Here is a clue Hal: unemployment is high because the private sector is now convinced that these idiots in charge can not be trusted. The job creators are all hunkering down hoping they can survive the insane tax & spend policies the left keeps pushing and none of them are falling for the bullshit tactic of promising cuts ten years down the line in return for taking even more money out of the private sector immeidately.

    As long as cuts in spending are not immediate and any new revenue – that’s taxes – is not by law solely targeted at deficit reduction, without any of the current money put towards it being shuffled elsewhere as well, we should oppose the class warfare schemers trying to raise taxes on anyone.

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  2. Kimpost

    Very bad numbers. Not how will this effect the current talks? I’m afraid it could lead to both sides digging in. Democrats will be hesitant to cut stimulus and entitlements in bad times, and Republicans will be hesitant to raise taxes.

    I think both are needed. If that’s going to happen we’ll need to see politicians who are willing to let go of some prestige.

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  3. JimK

    I wish I could remember where, but I saw an article this morning that called all of this “good news” and the headline said something about “Strong jobs report.”

    Spin, spin, spin.

    Anyway, Hal I think you continue to only discuss half the problem here. In railing against tax cuts you are in fact ignoring that spending is not just out of control…it’s gone far past that into frightening territory. You can say we need to raise taxes on the middle class – and maybe we do - but we also need to reform the long-term entitlement commitments we face and SPEND. LESS. MONEY. Period. Wouldn’t need higher taxes if we spent less.

    We need to get serious about electing politicians that will fight to shrink – not check the rate of growth, but shrink – the government. Will we? Probably not.

    Ammo. Ammo & water. That’s all I’m saying.

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  4. JimK

    I was writing a comment much along these lines as you were. I really don’t see any names in the current or up-and-coming political pool that would be willing to take a stand, declare a crisis and then act responsibly to shrink spending and increase revenue. Not one name stands out to me.

    Throwing it out there: Anyone know of a politician who might have that kind of backbone, and also not be a flake on things like defense or foreign policy?

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  5. AlexInCT

    Anyway, Hal I think you continue to only discuss half the problem here. In railing against tax cuts you are in fact ignoring that spending is not just out of control…it’s gone far past that into frightening territory. You can say we need to raise taxes on the middle class – and maybe we do – but we also need to reform the long-term entitlement commitments we face and SPEND. LESS. MONEY. Period. Wouldn’t need higher taxes if we spent less.

    More importantly, we need spending cuts NOW, not fictitious promises of cuts 10 years from now, when none of these politicians are expecting to be around and accountable when these don’t happen anyway, and long before we agree to any tax hikes on anyone.

    If you were maxed out on your credit cards and promised to stop spending so much a decade from now, or even a few months should suffice to make the point, if they but gave you a raise in the limit, they would likely close your account off and demand you make payment. Factor in the insane idea that government also gets to simply shrug and say they will just take more of our money – something you can not do because your employer would kick your ass out – whenever they are spending too much, and you have very little grounds to advocate for any kind of tax increases, whether your argument is legitimate or not that we can address the problem with them, unless you are the type that always falls for the “I won’t come in your mouth” bullshit.

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  6. samsgran1948

    We also have a problem in that around 50% of all Americans pay no federal income taxes. None! Zilch! Nada! And for fiscal 2010, that actually included me and Himself. I was totally appalled to get my tax forms back from the accountant to realize that we actually qualified for the earned Income tax! Us! No kids. No house payments. No car payments. Just taxes and utilities.

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  7. Hal_10000 *

    I think I’ve made my opposition to spending pretty clear with my post on the so-called stimulus. My preferred ratio is something like 5-1 spending cuts to tax increases.

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  8. AlexInCT

    Give me 50 to 1, with all that one going towards debt reduction, and we might have something. 5-1 will basically mean nothing. As I continuously point out the only cuts that demcorats are offering are the ones, unless it is on defense, all happening a decade from now when someone else can deal with the bigger problem. We are IN-FING-SANE if we let them increase taxes, because there will be no cuts.

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