By reasonable standards, we got a good jobs report today. 271,000 hires with a drop in part-time employment, a rise in wages and positive revisions to earlier months. It’s not Reagan, but it’s good.
So … time for your monthly reminder. This is not supposed to be happening. We are now in our fifth year of “austerity” where federal spending has been essentially flat and state spending has fallen. According to all the Keynesians, we are supposed to be back in recession. Job creation simply isn’t possible without government spending. According to the likes of Krugman, that’s the only variable that matters: how much the government is spending.
Now just imagine if our employers weren’t hamstrung with over a trillion dollars in deadweight loss from excessive regulation, over-complicated taxes and an expanding welfare state. The economy is staggering around with a five ton elephant on its back and is still producing jobs.
Now I suppose a clever left-winger will reverse those statements. “The economy is succeeding despite regulation and Obamacare! If only we didn’t have austerity!” Here’s the difference. We can measure the effects of regulation and taxation. There are direct compliance costs that absolutely come out of the pockets of employers. The effects of austerity are based on speculation and economic models that have yet to predict anything. When it comes to which narrative we should believe — the very visible dollars being sucked out of our bottom lines or the theoretical dollars being eaten by “austerity” … well, you be the judge of which of those you think is real.