Labor Day… without jobs
“Recovery Summer” ended with a thud last week, as the economy shed 54,000 jobs and the unemployment rate climbed to 9.6 percent. Here in the 9th district of Illinois, we saw no improvement at all–”rising or falling slightly or staying flat,” as the Pioneer Press noted. Last year, we were told the stimulus would keep unemployment below 8 percent. Today, unemployment is well above 8 percent in much of our district–city and suburb.
Remember how Jan Schakowsky promised on July 1, 2010 that “This administration, and this Congress, is set to create more jobs in 8 months than net jobs created in the last 8 years of the Bush administration?” (The jobs numbers dropped dramatically the next day.) Remember Vice President Joe Biden’s promise of 250,000 to 500,000 new jobs per month by the summer? This administration, and this Congress, are clueless.
There are other signs of trouble. Sales of existing homes, for example, fell to a 15-year low. The stock market is barely above water for the year, and still on a roller coaster ride. It’s not necessary to repeat the bad news. What is necessary is for us to face the fundamental reason our economic crisis has continued: high spending and heavy regulations create certainty about taxes, and uncertainty about profits and wages.
Last month, in a widely-circulated article in the Wall Street Journal, Michael Fleischer explained “Why I’m Not Hiring.” He pointed out that because of government policies, it cost $74,000 to pay an employee $44,000 in net income and $12,000 in benefits–even though she “makes” $59,000 per year on paper. Employers and workers lose because the government has turned businesses into tax collectors and insurance providers.
My opponent believes that we must spend more government money to create jobs. She hasn’t learned from recent history. In February 2009, she promised that the stimulus would create 148,000 jobs in Illinois. Since then, Illinois has actually lost 171,000 jobs, according to the latest figures from the federal Bureau of Labor Statistics. Even Recovery.gov only claims that the stimulus “saved or created” fewer than 22,000 jobs.
Many people believe that we must draw upon the lessons of Franklin Delano Roosevelt and the Great Depression. They say that his spending programs were the key to saving our economy. In fact, Roosevelt’s federal spending was offset by the lack of state and local spending–Herbert Hoover may have actually done more to stimulate the economy! Roosevelt placed greater emphasis on structural reform of the economy than spending.
Not all of these reforms were good, and some were very bad. The economy worsened in 1937-8–which today’s big spenders claim was the result of a cutback in federal spending. However, the more likely cause were some of Roosevelt’s structural changes. Laws allowing the government to raise banks’ reserve requirements, for example, caused a credit crunch. New laws protecting big labor raised wages, but reduced jobs.
We’re repeating some of the same mistakes that Roosevelt made by adding regulations that hold back small business growth and job creation when they are needed most. And we are ignoring one of the most positive lessons of Roosevelt’s presidency: the need to stand up to tyranny. Already, in 1937, Roosevelt was warning us to “quarantine” the world’s fascist regimes. The world failed to listen, losing a chance to avert a wider war.
We ought to learn the right lessons from Roosevelt. Create structural reforms that free the private sector to create jobs. Protect our national security and prosperity by standing up against aggressor nations. Let’s leave the wrong lessons–high federal spending and heavy regulation, foreign isolationism and appeasement–behind. This Labor Day, let’s commit ourselves to doing what we need to do to get Americans back to work!
