Truth Before Dishonor

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About That Recovery… Funny, I Don’t See None

Posted by John Hitchcock on 2011/05/06


McDonalds added 62,000 jobs last month. Coincidentally, McDonalds was one of 1,200+ winners of the “ObamaCare Waiver” lottery, along with multiple Unions who had pushed for ObamaCare and then wanted out. And, depending on who you ask, that was either close to 1/4 or just over 1/3 of all new jobs created last month.

To claim this is a sign of a recovery, one would have to be a few fries short of a Happy Meal. As Jazz Shaw said,

185,000 is still far short of the roughly one quarter million new jobs we need to be adding monthly to set us on any sort of sustainable path to previous employment levels.

I wonder where we might be able to generate some more jobs, or if there’s even anything the government could do about it? Hrmmm… I wonder if we might find a few new jobs for the people near the Gulf who work in the energy industry?

Yes, due to the current level of unemployment (including those who have fallen out of the picture altogether) and the fact the US is still growing in population, at least a quarter million jobs a month must be created. At least. But we’re nowhere near that benchmark, and we’re not even coming close to being headed toward that benchmark, so long as current Administration policies and agendas continue to be pushed.

There have been no oil refineries built in the US since the 1970s. And as Tim Higgins says, “Nuclear energy remains a pipe dream in a nation that hasn’t built a new facility in over thirty years, in large part because of the cumbersome federal regulatory process involved.”

Donald Hertzmark explains multiple bad energy decisions made in the 1970s. Hertzmark’s conclusion:

In the end, the energy policies of that past 30 years that had significant positive effects were mostly of the “first do no harm” variety. Most of those policies were enacted during the 1980s, so as to undo some of the most egregious acts of the 1970s. With the exception of the spectacular unintended consequences of the (relative) pittance in Synfuels Corporation funding, all of the careful mandatory allocations, use restrictions, production restrictions, punitive taxes, price controls and technology development showed either negative impacts on the supply of energy or no discernable effects on energy supply and use.

A number of the Carter era policies have remained part of the US Government’s official approach to energy: restrictions on offshore oil and gas production, “catch-22” type regulation of spent nuclear fuel, reliance on overall manufacturer fuel economy standards rather than prices to encourage conservation of gasoline, and last, but not least, the ethanol tax credit.

The price that we have paid for these interventions – less domestic energy production, more price volatility, aging network infrastructure – far exceeds any of the supposed benefits of such policies. Now we have a new president who wishes to make his name by even more massive intervention in energy markets – since it worked so well the last time. We face grandiose plans that start from the assumption that markets do not work and private firms cannot be trusted to make the “right” types of investments, when, in fact, most of our “remnant” problems result from ignoring rather than following market pricnciples. If the 1970s are any guide we will live with the consequences of our follies for many years.

Over-regulation and the addition of armies of new regulators kill private sector job opportunities and growth. It is the very nature of the regulation beast. As Americans For Prosperity (HT Kathy Shaidle) notes:

And as we have pointed out, there are of late many new regulators ensconced in Washington.
Which, as the Phoenix Center report states, is an expensive expansion of busybodiness.

(E)ach million dollar increase in the regulatory budget costs the economy 420 private sector jobs.

Thankfully, the Center has the simple cure – cut back on the regulatory bureaucrats.

On average, eliminating the job of a single regulator grows the American economy by $6.2 million and 98 private sector jobs annually.

That last word is key. Eliminating one regulator creates 98 gigs – not just this year, but next year, and the year after that, and….

Talk about a force multiplier.

And by creating room for the private sector by contracting the government by one regulatory bureaucrat, we get $6.2 million in economic expansion that year and every year thereafter.

These positive numbers very quickly add up to some serious private sector job and economic growth.

O)ver a five-year window, even a small 5% reduction in the regulatory budget (about $2.8 billion) will result in $376 billion ($75 billion annually) in expanded GDP and expand employment by 6.2 million jobs (1.2 million annually).

Of course, every Obama Administration Commission, Agency and Department has – since November’s election – has busied themselves hiring many, many more of these bureaucratic busybodies. In many, many cases to enact and enforce regulations that were never passed by Congress.

ObamaCare has added thousands of new pages of regulations and all manner of new regulators. The FCC, FEC, EPA, etc, etc are adding untold new regulations and untold new regulators to force compliance with the new regulations Congress never voted on. And it’s costing jobs, freedom, inflation, and the economy overall.

Federal and state regulators destroyed arguably the richest agricultural land in America, costing untold economic damage to central California and its residents. Federal regulators killed Shell’s drilling for new oil on the north shore of Alaska, killing jobs, adding to the upward pressure on oil prices, continuing our reliance on America’s enemies for oil. Federal regulators got in Texas’ regulators’ business and killed jobs in Texas. Federal regulators are right now trying to kill oil production in Texas, again killing jobs and adding to the upward pressure on oil costs. The list goes on and on and on and …

Want a recovery? Eliminate ObamaCare, eliminate EPA regulations that are killing both the agriculture industry and the oil industry among other businesses, stop the contempt of federal court action the Obama administration is involved in, eliminate every regulator job that was created since January, 2009. That’s just a start, but it would be a huge step in the right direction — a step we absolutely need.

UPDATE: Chile, doing the exact opposite of Obama, Liberals, Keynes, is having an economic BOOM! Last year, Chile’s GDP rose more than 15 percent, and expectations for this year are an increase of more than 6 percent. Chile shrank their government to 5 percent of GDP, privatized their retirement, and opened up free trade dramatically. In addition, Chile’s corporate income tax rate is the second-lowest in Latin America. Chile’s 18 percent trails only Peru at 10 percent while Latin America averages 28 percent. The US is over 39 percent, trailing only Japan and by fractions of a percent, which was scheduled to drop their corporate rate below that of the US, for top corporate rate in the world.
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2 Responses to “About That Recovery… Funny, I Don’t See None”

  1. [...] but it would be a huge step in the right direction — a step we absolutely need. ________ Cross Post Filed under Constitution, Culture and Society, Depression Conditions, Disdain For The [...]

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  2. [...] to drop their corporate rate below that of the US, for top corporate rate in the world. ___________ Cross Post Share and Enjoy: Sphere: Related ContentRelated postsHeritage Foundation: Freshman Lawmakers [...]

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