The American economy passed another grim milestone during June with unemployment hitting a 26-year high of 9.5%and a drop in wages from pay cuts and furloughs. The economy hemorrhaged 467,000 jobs during the month, and the so-called underemployment rate, which adds in those who have given up looking or settled for part-time work, is 16.5%, the highest since 1994. It’s a bleak picture right now on the economic front, and the many who are still employed ought to feel lucky.
Not surprisingly, Obama’s rating on the economy has fallen to its lowest level yet, according to a Rasmussen poll that gives him 42% excellent or good marks. It’s even worse among independents, who oppose him 75% to 23%, a shockingly horrible number that may signal a sudden rapid drop-off in Obama’s celebrity-like popularity is on its way. Part of the reason is just the fact that Obama is the guy in charge right now, and part of it is the decreasing ability to blame current problems on the previous administration. A lot of it, though, is self-inflicted and has to do with the much-hyped stimulus package, billed as a shot in the arm of the economy that would provide a jolt to the system and reinvigorate job growth with “shovel-ready” projects.
The only problem is that the stimulus wasn’t a focused shot in the arm, it was a blunt-edged mallet, a massive spending program that has yet to pay out most of its allocated funds. The rationale for passing it remains a complete joke, as the goal wasn’t to provide a near-term boost to the economy, but to get through a raft of spending items right away that had been pined for over the previous eight years. And if by some small chance the stimulus funds produce an uptick, it will be on a shamefully-designed election year timetable in 2010 when most of the money starts to flow. By 2010, the money won’t make a difference, just as it wouldn’t have in 2009, and in any case the goal of “instant economic stimulus” by massive government cash infusion has been shot all to hell.
Compounding matters is the idiotic cap and trade bill passed by a razor-thin margin in the House and being considered in the Senate. It’s laughingly referred to as a “jobs bill.” Like the stimulus package, it’s being promoted as something it’s not. It’s an environmental bill aimed at punishing industry, and if any mythical “green jobs” are created, it’ll be a small side effect of a bill designed to combat the contested idea of global warming. But no amount of “green jobs” will replace the manufacturing sector jobs that will be lost as industrial and power companies are forced to pay taxes on their emissions. It’s why the bill, which makes little sense in the first place, is downright dangerous at this particular juncture, as an already precarious manufacturing sector will likely be damaged even further, and all sectors will be impacted by the rise in energy costs that even cap-and-trade supporters acknowledge will occur.
If I were advising the President, I’d tell him to cut government spending by a large margin, and reduce taxes to give people more of their own money back. It won’t happen, though, as the President and Democrats in Congress seem hell-bent on pushing every item of their agenda through before the American public finally tire of them. By that time it will be too late, and a vicious battle to turn back the entitlement and tax clock will have to begin.