Friday, 13 November 2009

Obama to Host “Jobs Summit” Amid Stimulus Exaggerations

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President Obama announced November 12 he will host a “jobs summit” in December at the White House to try to stop the upwardly spiraling unemployment rate.

“We’ll gather CEOs and small business owners, economists and financial experts, as well as representatives from labor unions and nonprofit groups,” Obama told reporters, “to talk about how we can work together to create jobs and get this economy moving again.”

President Obama opened his announcement of the jobs summit by claiming to have made extraordinary strides toward ending the recession:

Over the past 10 months, we’ve taken a number of bold steps to break the back of this recession. We’ve worked to stabilize the financial system, revive lending to small businesses and families, and prevent responsible homeowners from losing their homes. And through the Recovery Act, we’ve cut taxes for middle class families, extended and increased unemployment insurance, and created and saved more than a million jobs. As a result, the economy is now growing again for the first time in more than a year — and faster than at any time in the past two years.

While President Obama's claim to have jacked up government spending for a variety of social programs such as unemployment insurance and Wall Street bailouts is undeniable, his claims that the economy has turned to a permanent recovery and that he has saved a million jobs are highly questionable. Most of the economic “growth” that the U.S. economy marked during the summer quarter was owing to the “Cash for Clunkers” auto incentive program that has now ended. Auto sales may return to recession level slumps for the last quarter, resulting in negative economic growth again.

Regarding the “jobs saved” claim, an investigation by the very liberal Boston Globe cast serious doubts on Obama's claim of saving a million jobs. Using data at the federal government's stimulus tracking website, Recovery.gov, the Globe found that all of the top “saved” jobs in the American Recovery and Reinvestment Act (i.e., the “stimulus” bill ) in Massachusetts were government agencies. In other words, these jobs will be eliminated anyway once the federal funding runs out.

The Globe also found that many of the jobs the federal website claimed to have “created” were never created in the first place. The overwhelmingly liberal and pro-Democratic Globe opined that Obama's claim of one million jobs saved was basically a statistical lie:

Sad to say, fibbing on the number of jobs that were saved or created by the stimulus bill won’t actually put people back to work. It certainly won’t help secure more federal money, since the exaggerations, once revealed, only serve to fuel skepticism about whether federal spending can indeed stimulate the economy.

Somehow, Bridgewater State College managed to tally 160 full-time student jobs out of $77,181 in federal funding. The college acknowledged the mistake, and said no new jobs were created. One rental-housing agency reported 26 jobs were saved or created because of rent subsidies that it receives every year. The agency blamed the error on confusing paperwork. Other recipients contacted by the Globe counted small cost-of-living raises as jobs being saved, or reported new jobs for work that hasn’t actually begun yet.

To have even a staunch supporter of the President and his party such as the Boston Globe question the official statistics and call it “fibbing”  is a truly troubling event for the Obama administration. The President will head into this “jobs summit” under the illusion that the federal government can make — and already has made — a positive contribution to jobs growth. But the reality is that government does not create jobs; it can only draw funds out of the productive and job-producing private sector and spend the money on government programs that never multiply job creation.

President Obama seemed to acknowledge that government can't do everything with regard to job creation in his November 12 address announcing the summit. “We all know that there are limits to what government can and should do, even during such difficult times,” the President said. But then he seemed to take it back, adding: “But we have an obligation to consider every additional, responsible step that we can [take] to encourage and accelerate job creation in this country.”

Even if President Obama admitted that there are limits to what the federal government can do to create jobs in the current economy, promotion of the “stimulus” bill and other actions thus far seem to indicate that he will continue to act without regard to those limits imposed by the laws of economics.

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