Fudge And Spin

Oh, boy.  The latest jobs numbers are out again, and from looking at the media spin, you'd think we were out of the woods.  For example:

Economy Gains Impetus as U.S. Employers Add 290,000 Jobs

The American economy continued to add jobs in April in a further sign that an economic recovery was on track.

Payrolls surged with an unexpectedly strong 290,000 jobs last month, the Labor Department reported on Friday, while the unemployment rate rose to 9.9 percent. "This is unambiguously a strong report for growth implications," James O'Sullivan, chief economist at MF Global, said. "It adds to the evidence that the pickup in growth is leading to a clear-cut pickup in employment. It is very clear there has been a bounce here, and momentum has been up."

With revisions on Friday, April was the fourth consecutive month that the economy added workers (a revised 230,000 jobs were added in March, instead of 162,000). Besides March, February was revised from a loss of 14,000 jobs to a gain of 39,000. With a January gain of 14,000, the cumulative increase came to 573,000 jobs in four months.

Those are some mighty big pom-poms there, NYT!  This template is being repeated all over the mainstream media.

So, as always, let's actually digest the numbers rather than the fudged-up spin:

Today the Labor Department's Bureau of Labor and Statistics released its monthly jobs report showing that the nation's unemployment rose to 9.9% in April despite the addition of 290,000 jobs, 66,000 of which were temporary Census 2010 jobs. The rise in unemployment was driven by the entrance of 195,000 previously discouraged Americans reentering the workforce. In total, the U.S. economy has now lost a net of 2.6 million jobs since President Barack Obama signed his $862 billion stimulus plan. We are 7.6 million jobs short of the 137.8 million he promised the American economy would support by 2010.

It is encouraging to see the American economy beginning to recover, but these numbers again indicate that the Obama administration's heavy government hand has retarded and deformed what otherwise would have been a more robust recovery. The White House may tout Congressional Budget Office (CBO) reports showing their $862 billion stimulus created jobs, but the CBO has also admitted their computer simulation didn't take any actual new real world data into account. To the contrary, an independent study of real world stimulus facts found: 1) no statistical correlation between unemployment and how the $862 billion was spent; 2) that Democratic districts received one-and-a-half times as many awards as Republican ones; and 3) an average cost of $286,000 was awarded per job created. $286,000 per job created.

And what kind of jobs were created? According to Gallup the federal government is hiring at a significantly faster pace than the private sector. And data from BLS confirms that governments are increasing public sector pay at far faster rates than the private sector. None of this should be a surprise. President Obama specifically designed his stimulus to preserve government union jobs.

Not that President Obama's agenda has failed to produce any private sector jobs. The Washington economy is booming as private firms have been forced to hire legions of lawyers and lobbyists to both protect their firms from Obama's new agenda and find ways they can turn it into profit. This is why energy companies are spending millions on lobbyists to shape legislation instead of on scientists to find energy. It is why software companies are spending millions on lawyers to get federal government business instead of on engineers to develop new technologies. ...

What happens when big government, and the big businesses best capitalized to influence it, are the main drivers of economic recovery? The recovery is slower and smaller than it otherwise would have been. A recent study by the Kaufman Foundation found that small businesses have led America out of its last seven recessions, generating about two of every three new jobs during a recovery. But under this Obama recovery, not only are government jobs growing faster than private sector jobs, but jobs are rebounding faster at large employers than small businesses.

And the Obama agenda is only set to make the environment for small businesses worse. The Obama budget plans to raise taxes on the small businesses that earn 72% of all small business income. Taxes on capital gains are set to increase to 20% while taxes on dividends are set to rise to 39.6%. Obamacare not only inflicts $503 billion in new taxes by 2019, $87 billion of which come from employer mandate penalties, but also burdens small businesses with new 1099 IRS paperwork every time they do more than $600 in business with another entity. Oh, and Obama is proposing more IRS funding and a change in law that will make it harder for small businesses to hire independent contractors.

... The more Washington taxes and regulates, the harder it is for small businesses to innovate, force big businesses to be more productive and create new jobs. The more the Obama agenda is implemented, the slower our recovery will be.

The bottom line is that the things Obama and the media are trumpeting as 'success' are little more than smoke and mirrors.  Reality begs to differ:

The U.S. jobless rate rose to 9.9% in April, the first increase in three months, but the government's broader measure of unemployment ticked up for the third month in a row, rising 0.2 percentage point to 17.1%.

The comprehensive gauge of labor underutilization, known as the "U-6″ for its data classification by the Labor Department, accounts for people who have stopped looking for work or who can't find full-time jobs. Though the rate is still 0.3 percentage point below its high of 17.4% in October, its continuing divergence from the official number (the "U-3″ unemployment measure) indicates the job market has a long way to go before growth in the economy translates into relief for workers.

So, what we have here is an increase in the number of unemployed looking for work, an increase in the number of unemployed not looking for work, an increase in the number of temporary government jobs, and the White House is claiming 'success'.

I'm not sure about you, but that's one kind of success that I'd just as soon live without!

Also, consider this from a few weeks ago:

Congress extended the maximum length of time the unemployed can collect unemployment insurance (UI) beyond the usual six months. Congress often does this [during] recessions, but never before by so much. Now workers in high unemployment states can collect unemployment insurance for 99 weeks – almost two years of benefits. Congress did this to help those out of work. But economic studies consistently show that when workers collect longer UI benefits they also stay unemployed longer.

...the unemployment rate would be roughly a percentage point lower ... if Congress had left unemployment benefits at six months. We would have 8.7 or 9.0 percent unemployment instead of the current 9.7 percent. Policies intended to help the jobless have kept many of them from finding new work. That may be a policy tradeoff Congress chooses to make. But not one should mistake it for an economic stimulus.

And guess what?  Congress just extended the UI benefits again in April.  Pure coincidence, no doubt.  I mean, it would be crazy to think about people going back out to find jobs when their UI ran out, right?  I wonder if perhaps the numbers might indicate they went back home after the benefits were extended?  We'll know if a few more weeks.

The reason for this spin is, of course, because they know their policies will prevent any real, substantial recovery.  They're trying to reset the expectations of Americans that this is just how it's going to be, a new state of 'normal', if you will.  If they can do that, they win with their permanent government expansion.

Republican Minority Leader John Boehner commented:

"A 9.9 percent unemployment rate is a harsh reminder that families and small businesses continue to ask 'where are the jobs?'  Positive job growth is always welcome news, but this rising and painfully high unemployment rate is a far cry from President Obama's promise that the trillion-dollar 'stimulus' would keep joblessness from rising above eight percent.  It has not, and millions have lost their jobs while Washington Democrats continue to push job-killing policies that pile more debt onto the backs of our kids and grandkids.  These misguided policies include a massive government takeover of health care, a Wall Street bailout bill, a value-added tax, a gas tax, and a government takeover of the Internet, all of which will kill jobs.  

"Washington Democrats have no coherent agenda to create jobs, and no interest in doing anything but continue to spend money we don't have on 'stimulus' programs that don't work.  Our economy will ultimately recover, but it will do so because of the hard work and entrepreneurship of the American people, not more wasteful Washington spending.  Republicans have proposed better solutions to cut spending now and help put people back to work."

We should all find Obama's 'new normal' to be offensive and unacceptable, and inform our elected representatives of that fact definitively on the phone today, and at the polls in November.

There's my two cents.