Tuesday, June 21, 2011

Two BIG Reasons for Economic Stagnation

When I was in a position to counsel those who were seeking for new employment opportunities, I routinely recommended they not watch the news.  I warned the mainstream media is always looking for a headline to grab the attention of their followers, and frequently the news is not good on the unemployment front.

As this long and protracted recession drags on, however, it may be useful to understand some of the underlying structural reasons the economy is still staggering.  I realize it's cold comfort for those still seeking employment, but there may be some legitimate reasons jobs are hard to come by regardless of their best efforts.

The most recent jobs report from the government is sobering.  According to the Bureau of Labor Statistics, the unemployment rate edged up to 9.1% in May, from a level of 9.0% in April and 8.8% in March.  This "jobless recovery" is a useful myth perpetuated by the administration and other like-minded politicians, but it is not a recovery until each American seeking work can be assured they have recovered.  If the economy continues to stagnate, Obama will be a one-term president.

Of deepest concern to me is the number of long-term unemployed (those unemployed for 27 weeks or longer).  Those numbers jumped up to 45.1% and 6.2 million in May, from 43.4% and 5.8 million in April.  It proves to me that those who are being successful in their job quest are those who are following the principles taught in the Employment Resource Centers of the LDS Church.  In the Career Workshop, attendees are encouraged to take control of their own job search and create their own opportunities, rather than depending upon the old ways of going about their search by sending out resumes and responding to job board listings.

In addition, registering at www.ldsjobs.org has been yielding fruit not only for job seekers, but also for employers who are finding qualified applicants in a much simpler and easier cyber-market where they can find what they are looking for.  I've had the opportunity recently to teach the Career Workshop in our ward, and was reminded once again of the power of the principles outlined by the Church in the workbook for the attendees.

What is clear to me now, after initially hoping for the best under the Obama administration's efforts to resuscitate the economy, is that their policies are deeply flawed.  The federal spending per household is rocketing upward on a dangerous trajectory that must be halted.

It is reminiscent of the three government workers who gathered at the shore of a lake, each armed with a bucket.  Into the lake each dropped his bucket and filled it up with water, thus lowering the level of the lake minutely.  Then they marched with much fanfare around the lake to the other side, emptied their buckets back into the lake, and declared they had "stimulated" the lake by pouring the contents back into the lake.  (Thanks to Grover Norquist for the visual image).

After 28 months in office, it is clear the President’s policies have failed to positively affect our economy.  He has two signature pieces of domestic "achievement."  His first was ObamaCare and the second was the stimulus package.  Each cost something in the range of $1 Trillion, and it was all borrowed money.  Even Obama admitted recently that "shovel ready" wasn't quite as shovel ready as they had initially posited.

Instead of stimulating the economy, however, these two biggest domestic spending experiments in the history of our nation have only served to exacerbate the two biggest systemic economic challenges we face as a country -- overspending and rapidly escalating debt.  Rather than introducing "new money" into the economy, the administration's efforts to date have been nothing more than cost shifting from one pocket with holes in it to another.

Senator Mike Lee (R-UT)
Compounding the seriousness of the matter is that Senate Democrats haven’t passed a budget in more than two years, and couldn’t even bring themselves to vote for the President’s most recent proposal.

I'm not naive enough to believe one man can change everything all at once, but watch for Senator Mike Lee (R-UT) and others who believe as he does, to continue making the case for addressing these issues head on without apology to those who keep demanding a continuation of the status quo.  Lee is leading out with a Balanced Budget Amendment proposal, seeking to hammer legislators into a spending straight jacket in the years ahead.  To his credit, Orrin Hatch (R-UT) has long been an advocate for the BBA, but has never been able to push it through.

It is my judgment that the administration has ceded their leadership to others by default.  Look for the emergence of new leadership, men and women who are not nearly as interested in politics as usual as they are in real solutions with apolitical consequences.

It's what we used to refer to in this country as statesmanship.

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