Mort Zuckerman Unbound

Campaign season always brings a blizzard of misleading economic statistics. Candidates and their satraps spin the numbers to tell the story that they want the electorate to buy.

Naturally, this causes many of us to seek out someone somewhere who can offer a clear and objective appraisal of what is really going on.

Since most commentators want to exercise influence over the election, it’s not an easy task.

For my part I pay special attention to recovering Obama supporters, people who supported Obama in the last election but who have since shown better judgment.

Among them, Mort Zuckerman of U. S. News and World Report. Zuckerman has offered an excellent analysis of the current employment situation. His is a dark and sobering vision. I recommend it to your attention.

He begins:

 America's great job creation machine is sputtering badly. It is now estimated that structural unemployment has risen from 5 percent before the crisis to close to 7 percent today. This means that one third of the rise in American joblessness may be impervious to the business cycle; it represents lost jobs that cannot be restored by boosting demand.

The problem now is not that people are being laid off by the millions. When an economy has reached bottom, as it did, it has already shed much of its labor, and layoffs slow. But the anemic recovery has not yielded job vacancies. Hiring today is at about 70 percent of the 2006 level. Given the increase in unemployed totals, job seekers are only about one third as likely to find work as in 2006.

Compare that to the fabled Great Depression of the 1930s. In the three years after 1933, the economy rebounded with growth rates of 11 percent, 9 percent, and 13 percent. But in 2010, months into our recovery, growth was about 3 percent, followed by 1.7 percent growth in 2011. The rate for 2012 could be about 2 percent—below the 3.4 percent throughout the postwar period.

The Great Recession continues. For some, it has become a Depression.

Next, Zuckerman explains how the uncertainties created by Obamacare have forced employers to make fewer new hires.

By now, even Barney Frank is saying that Obama’s obsession with health care reform was a mistake, so you know that the tide has turned.

In Zuckerman’s words:

Each month more Americans lose hope, permanently alienated from the workplace, their savings exhausted. The gradual expansion of the economy is too little to hope the cavalry is riding to the rescue. Real, authentic job creation will not come from Washington. It has to come out of the energy and spirits of the private sector. Two thirds of our employment is concentrated in 6 million small and medium-size businesses. We are not going to create jobs until they are in a state of mind to do so. They are not yet, and in part that's because of policy uncertainty that has depressed or confused them.

According to the Heritage Foundation, private sector hiring through June 2011 was 10 times slower following the passage of President Obama's healthcare bill compared to the prior 16 months. Economists at Stanford University and the University of Chicago estimated in the fall of 2011 that policy uncertainty has cost more than 2 million jobs since early 2010. These estimates reflect the small business community's reluctance to make new hires until employers know exactly what the law means in practice. The high level of temporary employment is a reflection of the same uncertainty. Businesses hedge their bets with short-term help.

We are living through the Obama administration’s calamitous policy failure.

Zuckerman concludes:

There is no doubt that the next presidential term will start with a rate of unemployment that is far higher than what President Obama inherited when he took office. The programs that he has put in place have failed. The U.S. economic recovery is like a person who promises much and doesn't deliver. There are not many months left for Obama to persuade the nation to measure his performance by a different mark.