Baracks Cunning Plan - Road to the Middle Class

SOME OF you may know and love the British Blackadder TV series. It featured Rowan Atkinson as an upper-class twit and Tony Robinson as Baldrick, his crafty lower-class servant/sidekick. A recurring theme was “Baldrick’s cunning plan” that usually failed to get them out of a jam.

We will return to Barack’s cunning plan in a moment. But first this message.

Last Friday the Labor Department issued its monthly employment data. And the news was unexpected. The unemployment rate was up, jobs were down, but private sector jobs were up.

Next thing you know, Bill Clinton will be running for president reprising his refrain from 1992. Remember? “Everything that should be down is up and everything that should be up is down!” What a talent.

The Labor Department’s numbers come from two different surveys. There’s the Bureau of Labor Statistics’ (BLS) Establishment Survey that’s based on information from businesses, and there’s the BLS Household Survey that is based on an opinion poll conducted by the Labor Department.

I put my money on the Household Survey, and it reports an increase in jobs from 138.96 million 139.25 million. That’s an increase of 290,000 jobs. Here is how it looks. I’ve charted two items from Household Survey: the the Civilian Labor Force, people with jobs and people looking for jobs, and the Total Civilian Employment.

It’s a pretty dismal picture. You could call it the crime of the century. President Obama was inaugurated right where you see the 2009 marker on the chart. He came into office when jobs were falling off a cliff. And what did he do? He had his pals in Congress put together a $800 billion program of waste, fraud, and abuse, and called it a stimulus. Then he went ahead with the biggest job-killer in the modern history, ObamaCare. No wonder the job total has barely budged off its low.

But, hey, President Bush had a pretty big recession on his watch. What did it look like? Here it is:

There are a couple of things that jump out of the chart. First of all, the job loss was way less. But the other thing is even more significant. The labor force kept growing, right through 2001 and 2002. People were out looking for work. Not true in the Obama recession. You can see that, since President Obama has become president the labor force has flat-lined. People just aren’t jumping into the labor force.

OK, you’ll say. The Bush recession was really pretty mild. What about a real recession like the Reagan recession of 1981-1982? OK, here it is.

Here’s the shocking fact. In the 1981 recession the number of jobs barely went down. And all through the recession the labor force was increasing. People were out looking for work.

All in all, it looks like the Great Recession is a bigger problem than the Bush recession and the Reagan recession. At least back then the labor force was growing. Not any more.

It’s taken about 18 months, but at last the president is really starting to take seriously the notion that there really is a problem with the economy. He and his advisors have decided that they really must do something to show the voters in November that they care about jobs.

So they have come up with $100 billion in job stimulus. Part of the stimulus is a program of targeted tax cuts for small business.

The plan, floated as a trial balloon at the New York Times, is this. The administration proposes to take the $35 billion extra revenue from the rich, by allowing the Bush tax cuts to expire on taxpayers earning more than $250,000 a year. Then they will give the $35 billion to small businesses through targeted tax breaks.

Now we can see the true brilliance of the Obama administration. Now we can see why we voted for a man like President Obama, a man with a mind, unlike the last president.

Who are the folks earning more than $250,000 per year? They are, predominantly, small business owners, people who pay tax on business income through their personal income tax returns.

So Barack’s cunning plan to jump-start the economy is to steal money out of the back pockets of the nation’s most successful small business owners and then give it right back to them.

Not even Baldrick would call that a cunning plan.

If I were President Obama’s chief economic advisor, I’d be pushing my way into his office this morning. I’d tell him to forget the cunning plans and do the right thing. Extend the Bush tax cuts—all of them—and on top of that, reduce the corporate income tax rate. Right now.

Either do that, Mr. President, I’d say, or it’s lights out.

Christopher Chantrill blogs at www.roadtothemiddleclass.com. His Road to the Middle Class is forthcoming.

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