American Elephants


Recovery? What Recovery is That? by The Elephant's Child

In January, 2009, when Barack Obama took office, the number of Americans of working age who were not in the labor force was 80.529.000. Since that time, that number has increased by 11,472,000 to 92,001,000 as of July 2014.

The participation rate measures the percentage of the civilian non-institutional  population that participates in the work force by either having a job, or actively seeking one. It’s just a snapshot, and subject to revision, but at this state in a supposed “recovery” it should be far better.

President Obama tries to put a good face on it and speak as if the recovery is chugging along just fine, but it really isn’t. Microsoft announced the layoff of 14,000 workers in July. The Army is shedding another 1,500 captains and majors.

A lot of coal-fired power plant workers are going to lose their jobs because of ridiculous regulations that will accomplish nothing at all, and a lot of coal miners as well, as this president tries to shut down the industry that produces nearly half of America’s electricity cheaply and dependably under the illusion that solar and wind can produce a significant amount of expensive energy, if some unexpected miracle just makes the sun stop being diffuse and the wind stop being intermittent.

And just to help out the faltering job market, Obama has issued an executive order allowing the spouses of workers here on H-1B visas to go to work. The next executive order is expected to allow the “children,” who are mostly young men of working age, arriving at our southern border to receive work permits. Doesn’t anyone notice that all these things are connected?

We’ve had lots of recessions in the past. There is a business cycle. As things get better and unemployment eases, the economy starts to grow and offers more opportunity — the better things get, the more risks businesses take. Overworked people get assistants, a new wing is added to the building, new machines are purchased, and so it goes.  (I should add here, that also in the news today was the nugget that many of our civil servants are so bored in their jobs that they are spending their days watching porn.)

Most people are probably unaware that we had another Great Depression in 1920-1921. It was just about as deep as Roosevelt’s depression, but Warren Harding treated it a little differently. World War I had left the nation with runaway inflation and a soaring debt. The national debt had increased from $1 billion in 1914 to $24 billion by 1920. (Yes, it was a long time ago)

So what did Harding do?  A “stimulus”?  A jobs program?  “Targeted” tax cuts?  Government bailouts for ailing companies?  Nope—he cut government spending sharply and rapidly (by almost 50 percent), began cutting tax rates across the board, and allowed asset values and wages to adjust freely as fast as possible.  Harding’s administration, Paul Johnson observed, “was the last time a major industrial power treated a recession by classic laissez-faire methods, allowing wages to fall to their natural level ….  By July 1921 it was all over and the economy was booming again.”

If you remember your history, it was called “the roaring twenties.”

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