paulitician
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- Oct 7, 2011
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By Larry Kudlow
Host, "The Kudlow Report"
You would think $1 trillion in stimulus spending and $2.5 trillion of Fed pump-priming would produce an economic growth rate a lot higher than 1.9 percent of GDP, which was the revised first-quarter number. And youd think all that government spending would deliver a whole lot more jobs than 69,000 in May.
But it hasnt happened.
The Keynesian government-spending model has proven a complete failure. Its the Obama model. And it has produced such an anemic recovery that frankly, at 2 percent growth, were back on the front end of a potential recession. If anything goes wrong like another blow-up in Europe theres no safety margin to stop a new recession.
And that brings us to the grim May employment report; the economy added only 69,000 nonfarm jobs last month. Its the third consecutive subpar tally, replete with downward revisions for the two prior months. Its a devastating number for the American economy, and a catastrophic number for Obamas re-election hopes. All momentum on jobs and the economy has evaporated.
Inside the May report, the data is just as bad. The unemployment rate rose slightly from 8.1 to 8.2 percent. The so-called U6 unemployment rate, tracking the marginally employed or completely discouraged, increased to 14.8 percent from 14.5 percent. And labor earnings are barely rising at 1.7 percent over the past year, almost in line with the inflation rate. In fact, through April, after-tax, after-inflation income is scarcely rising at 0.6 percent for the past year.
The private workweek also fell in May. So did the manufacturing workweek and aggregate hours worked for all employees. The small-business household survey did rise, but that follows declines in the prior two months.
Barack Obama doesnt get this, but businesses create jobs. And firms have to be profitable in order to hire. Yet the president is on the campaign trail criticizing Mitt Romney by degrading the importance of profits. Huh?
Without profits, businesses cant expand. And if they dont expand, they cant hire. And if they dont have profitable rates of return, theyre not going to attract new capital for investment.
Which brings us to a couple of important reasons for the virtual freeze in hiring...
Read more: Jobs Report | A grim jobs report for America | The Daily Caller
Host, "The Kudlow Report"
You would think $1 trillion in stimulus spending and $2.5 trillion of Fed pump-priming would produce an economic growth rate a lot higher than 1.9 percent of GDP, which was the revised first-quarter number. And youd think all that government spending would deliver a whole lot more jobs than 69,000 in May.
But it hasnt happened.
The Keynesian government-spending model has proven a complete failure. Its the Obama model. And it has produced such an anemic recovery that frankly, at 2 percent growth, were back on the front end of a potential recession. If anything goes wrong like another blow-up in Europe theres no safety margin to stop a new recession.
And that brings us to the grim May employment report; the economy added only 69,000 nonfarm jobs last month. Its the third consecutive subpar tally, replete with downward revisions for the two prior months. Its a devastating number for the American economy, and a catastrophic number for Obamas re-election hopes. All momentum on jobs and the economy has evaporated.
Inside the May report, the data is just as bad. The unemployment rate rose slightly from 8.1 to 8.2 percent. The so-called U6 unemployment rate, tracking the marginally employed or completely discouraged, increased to 14.8 percent from 14.5 percent. And labor earnings are barely rising at 1.7 percent over the past year, almost in line with the inflation rate. In fact, through April, after-tax, after-inflation income is scarcely rising at 0.6 percent for the past year.
The private workweek also fell in May. So did the manufacturing workweek and aggregate hours worked for all employees. The small-business household survey did rise, but that follows declines in the prior two months.
Barack Obama doesnt get this, but businesses create jobs. And firms have to be profitable in order to hire. Yet the president is on the campaign trail criticizing Mitt Romney by degrading the importance of profits. Huh?
Without profits, businesses cant expand. And if they dont expand, they cant hire. And if they dont have profitable rates of return, theyre not going to attract new capital for investment.
Which brings us to a couple of important reasons for the virtual freeze in hiring...
Read more: Jobs Report | A grim jobs report for America | The Daily Caller