Morning Bell: So, How’s That Pivot to Jobs Going?

Posted By Conn Carroll On March 5, 2010

Last week President Barack Obama hosted a seven-and-a-half-hour televised health care summit. This week the President launched his “final” campaign for passage of his health care plan. Next week, President Obama will travel to Missouri and Pennsylvania to continue this “final” effort to jam his unpopular plan through Congress. With this all-health-care-all-the-time White House agenda it seems like eons ago that the Obama administration announced, following the complete rejection of its health care plan in the Massachusetts Senate special election ,  that President Obama’s first State of the Union would mark a “pivot”  from health care and to a “razor sharp focus on jobs” . So how is that pivot to jobs going? Well, the Labor Department’s Bureau of Labor Statistics released its monthly jobs report  this morning and it showed the U.S. economy shed another 36,000 net jobs last month. Our nation’s unemployment rate is still at 9.7%.

So why is our economy having such a tough time pulling out of recession? Here are the facts: the most recent data available [5] show that the U.S. economy actually lost fewer jobs during this recession than were lost during the 2001 recession. Specifically, 50.8 million jobs were lost through the first six quarters of the ‘01 recession while 48.2 million jobs were lost through the first six quarters of this recession.

But if our economy is losing fewer jobs this time, then why is our unemployment rate so much higher under President Obama’s stewardship of the economy? The answer: job creation. Or actually the lack thereof. Back to the BLS data: through the first six quarters of the 2001 recession 47.6 million jobs were created, while only 40.3 million jobs have been created through the second quarter of 2009. That’s a 7.3 million jobs gap. The reason our unemployment rate is so much higher now is low job creation, not high job loss. So why aren’t businesses creating jobs? Here is what entrepreneurs have been trying to tell the Obama administration:

At one of President Obama’s many jobs summits, Fred Lampropoulos told The New York Times  that businesses were uncertain about investment because “there’s such an aggressive legislative agenda that businesspeople don’t really know what they ought to do.” That uncertainty, he added, “is really what’s holding back the jobs.”
Dan DiMicco, CEO of steelmaker Nucor Corp,  told the Wall Street Journal : “Companies large and small are saying, ‘I am not going to do anything until these things — health care, climate legislation — go away or are resolved.’”
Porta-King CEO Steve Schulte told USA Today  his company is not investing because “proposals in Congress to tackle climate change and overhaul health care would raise costs.”
The New York Post ’s Charles Gasparino reported on the 600 companies stock analyst Peter Sidoti covers: “‘There hasn’t been one bankruptcy,’ he tells me. How did they survive the recession? By cutting costs and hoarding cash, not expanding their business and hiring more people, even as the economy now is starting to recover. During other recoveries, Sidoti says, firms like these would be hiring workers in droves as demand picks up for goods and services. This time around, they’re not — because ‘they don’t know what their costs are going to be.’”
National Federation of Independent Business  chief economist Bill Dunkelberg writes: “The horizon is filled with cost unknowns, from healthcare to cap and trade to yawning deficits and the need to come to grips with them, from paid family and medical leave to card check, from expiration of the Bush tax cuts to state decisions about their finances. Washington cannot expect small business owners, facing difficult economic circumstances anyway, to commit themselves to investing in new employees or equipment and vehicles without acknowledging and revealing the policy-inspired costs that will be imposed on them. It is all about uncertainty and confidence.”
Our economy’s job creators have been trying to send a message to the Obama administration for months: stop creating so much uncertainty in the tax and regulatory environment so that we can figure out how to invest our money and start creating jobs. Stop taking over car companies . Stop shedding financing contracts . Stop taking over 1/6th of our economy . Stop raising taxes on our energy sector . Just stop.

Our economy will eventually recover and start producing jobs again, probably very soon. But that recovery has already been delayed by an administration that saw this recession as an opportunity to fundamentally rewrite our nation’s relationship with the federal government. Unless this administration completely abandons its far reaching transformation agenda, this recovery will be a very slow one.