American Elephants

The Nation’s Employment Picture: Who’s Working and Who’s Not. by The Elephant's Child

The Washington Post had an interesting little graphic on Friday on Unemployment by Industry Sector.   (click to enlarge)

The important part is the center graphic — Unemployment by Industry Sector.  Construction leads, with 16.3% unemployment.  In most previous recessions, construction has led the recovery.  Not this time.

Leisure and Hospitality follow with 10.6 % unemployment.  Not surprising, people aren’t apt to take as many trips or go for as much entertainment, during a recession.

The rest are about as expected until you get down to Education and health services at 5.7%, And Government workers — only 3.9% unemployment. I would wager that most of the government workers who are unemployed are state or local government employees, rather than federal workers.

It’s pretty miserable for anyone who is unemployed, and those who have been unemployed for a long time have our real sympathy.

The Census Bureau each year publishes a comprehensive report on public school revenues and expenditures.  combined with education staffing statistics from the U.S. Department of Education’s National Center for Education Statistics Common Core of Data there is an interesting picture of the finances and labor costs of the American Public School System.

In the 2008-2009 school year, as the nation was in the middle of the recession, 48.238,962 students were enrolled in the U.S. K-12 public education system. That was 157,000 fewer students. They were taught by 3,231,487 teachers (full-time equivalent) an increase of 81,426 teachers from the previous year.

The entire public education workforce: teachers, principals, administrators and support workers grew by more than 137,000 employees during the recession.  27 states had fewer students in 20090 than in 2008 by 16 of those states hired more teachers.

Per-pupil spending rose 2.6 percent, and spending on salaries and benefits rose 2.3 percent. The average per-pupil spending was $10,499, with more than 25 states spending more than $10,000 per student.

“It’s an odd enterprise that reacts to fewer clients by hiring more employeessays the author of this piece. But then education is an odd enterprise. Who would think that the students best prepared for college study would be those educated at home?

Will There Actually Be Real Regulatory Reform? Don’t Bet On It. by The Elephant's Child

If, as we asserted, excessive regulation is one of the biggest barriers to hiring, to more job creation, what is the Obama administration doing about it?

Is is truly, as law professor Todd Zywiki says: the Obama administration believes “in a regulatory state in which regulators are seen as disinterested experts with the factual knowledge, practical wisdom, and unwavering integrity to manage the economy.  They alone are presumed to be capable of steering the nation toward prosperity.”

I certainly don’t believe in any ‘disinterested experts.’  I’m a little suspicious of anyone claiming to be an expert in much of anything, and when you get into ‘practical wisdom’ and ‘unwavering integrity’ you have lost me entirely.

Remember that President Obama has hired a regulatory czar, Harvard law professor Cass Sunstein, whose official title is Administrator of the Office of Information and Regulatory Affairs, which is part of the White House’s Office of Management and Budget.  Mr. Sunstein recently wrote an op-ed for the Wall Street Journal titled “21st Century Regulation: An Update of the President’s Reforms.”

He said “A 21-st century regulatory system must promote economic growth, innovation and job-creation while also protecting public health and welfare.  Earlier this year, President Obama outlined his plan to create such a system by adopting a simpler, smarter and more cost-effective approach to regulation.  As a key part of that plan, he called for an unprecedented government-wide review of regulations already on the books so that we can improve or remove those that are out-of-date, unnecessary, excessively burdensome or in conflict with other rules.

I’ll bet there is a regulation that requires all members of the administration, when speaking about policies, to include ‘21st Century.’ “innovation,” simpler, smarter and more cost-effective,” and “unprecedented.” The Obama administration seems unusually determined to insist that everything they do is 21st Century.  I spent most of my life in the 20th Century, and I can’t recall anyone ever making a big deal about what century it was.

At any rate, the Occupational Safety and Health Administration is “eliminating over 1.9 million hours of redundant reporting burdens on employers, saving tens of millions of dollars every year.” They are getting rid of regulations that require ‘film x-rays instead of digital.’

The EPA is going to quit defining milk as an “oil” as it has been since 1970, and eliminating the costly rules on the agricultural community designed to prevent “oil spills.” Dairy farmers will get an exemption. This will save $1.4 billion over the next decade. They also propose to eliminate the obligation for many states to require air pollution vapor recovery systems at local gas stations, since modern vehicles already have effective air pollution control technologies. The projected annual savings are $67 million.

Other agencies are proposing, or considering, or pursuing.  They have been listening, and developing plans, and two-and-a-half-years into the Obama administration, Mr. Sunstein is releasing reform plans.  Which, of course, is a defining moment.

Heritage defines this as the low-hanging fruit of regulatory relief — things that should have never been instituted and repealed long ago. Dairy farmers have been asking for repeal of the “oil spill” regulations since 2007. Most “actions” are simply suggestions for change at some later date. Of the 31 rules in the EPA’s formal plan, only two are actual rule changes.  The fact that it took 4 years to get the oil spill regulations changed demonstrates how broken the regulatory system is.  The EPA is a veritable treasure vault of unnecessary regulation, and the spigot of new regulation is still flowing full-on.

It is encouraging that they are trying to do something, but it remains way easier to issue new rules than it is to get everybody to agree that one can be parted with.  Don’t expect too much.  The uncertainty remains.

Conspicuous Gallantry in Defeating More Than 30 Taliban, Single-handedly! by The Elephant's Child

Corporal Dipprasad Pun, 31, from the 1st Battalion of the Royal Gurkha Rifles was presented with the Conspicuous Gallantry Cross by Queen Elizabeth.  This award for gallantry is second only to the Victoria Cross  — the highest honour for bravery in the face of the enemy. He single-handedly defeated more than 30 Taliban fighters

Corporal Pun’s position in Afghanistan was overrun with Taliban fighters. He said that he was spurred on by the belief that he was going to die and so had nothing to lose in taking on the attackers who overran his checkpoint. He had no choice but to fight.

He was on sentry duty when he discovered Taliban about to launch a well planned attack on the compound. There were over 30 attackers but he didn’t have time to count. He fired off 250 general purpose machine gun rounds, 180 SA80 rounds, six phosphorous grenades, six normal grenades, five underslung grenade launcher rounds and a claymore mine. He beat one off with the tripod from his machine gun.  All the while he was under continuous attack from rocket-propelled grenades and AK47s.  He saved the lives of three comrades at the checkpoint.

Gurkhas have always been fierce soldiers. Cpl. Pun’s father and grandfather were also members of the Royal Gurkha Rifles, deservedly famous fighters.

The Daily Mail article about his accomplishment and the ceremony has pictures.

Weak Economic Numbers.Weak Job Creation. Weak President. by The Elephant's Child

Stephen L. Carter, a professor of Law at Yale, has an article at Bloomberg, in which a man in the aisle seat in a 737 heading east explains to him why he refuses to hire anyone.

The gentleman has a successful business, demand for his product is up but he will not hire. He doesn’t know how much it will cost, he says.

How can he hire new workers today when he does not know how much they will cost him tomorrow?  He is not referring to wages, but to regulation.  He has no way of telling what new rules will go into effect and when they will appear.  His business operates in several states, but operates on low margins. He cannot afford the risk of losing what little profit there is to some new round of regulatory changes. So he’s hiring nobody until he has some certainty about how much that employee will cost him.

At the Corner, Iain Murray explains:  (emphasis added)

Today’s much weaker than expected employment numbers show that the president’s agenda of more regulation and increased spending has undoubtedly failed. However much money he throws at the problem, entrepreneurs are not going to start adding jobs to the economy while the burden of regulation is so high. Regulations cost the economy $1.75 trillion each year. It is regulation that is dragging us back to recession.

Yesterday’s jobs announcement said that only 54,000 jobs were created in May. To get back to the employment levels in December, 2007, we would need to add 250,000 jobs each month for sixty-six months.

Democrats, for unknown reasons, believe firmly in Keynesian economics. The idea is that you can increase total demand in the economy by either having government spend, or by cutting taxes just enough to leave more money in people’s pockets in the hopes that they will spend.  This, they believe, will revive the economy.  It never works. We remind them that it never works. It doesn’t work for Republicans either. It’s non-partisan, and useless.

Keynesian economics is built on the assumption that government spending has a multiplier effect. As each dollar passes from hand to hand, it is creating more demand. What it ignores, is that you have to take money out of one pocket of the private economy— to put into the other pocket of the private economy.  If you take water out of one end of the swimming pool and put it in the other end, the pool doesn’t get any fuller.*

Liberals think of the revenue that comes in as their money, or at least ‘government money.’ They always forget that the government has no money of its own.

So all that stimulus, the bailouts, the TARP money, the subsidies, and the tax credits were all pretty much wasted.  And we have spent so much that, unless we stop spending and get our affairs in order, Moody’s and Standard&Poor are going to drop our national credit rating.

The Congressional Budget Office just announced that the Obama stimulus actually raised the deficit by $840 billion — significantly more than the $787 estimated cost.

(click to enlarge)

It didn’t have to be like this. This recession should have eased sooner, but was prevented by Obama’s vision of a “regulatory state in which regulators are seen as disinterested experts with the factual knowledge, practical wisdom, and unwavering integrity to manage the economy.  They alone are presumed to be capable of steering the nation toward prosperity.” (Todd Zywiki)

Slashing corporate tax rates, or eliminating them would have helped. Eliminating regulations would help, and refraining from adding new ones would give the economy a boost. As Steven Carter’s seat mate said, he needs some certainty.  He won’t hire anyone until he knows how much that employee will cost him.

Too much chasing rainbows and pots of gold. We need to try the things that are proven over and over, to actually work.

*This excellent analogy comes from Brian Reidl at the Heritage Foundation.

ADDENDUM: Powerline, today, takes up the same problem, with the same graph. They, however, publish a different one as well, at the prompting of an informed reader who says the current recession was quite average for the first year, and the red line would be clumped in the middle of all the other lines of ordinary recessions. The graph he claims as more representative (See Powerline) reveals that Obama “inherited” an average recession, used it to push radical measures, and extended the recession far longer than it should have been. I think this is probably far more correct, and worth pondering.

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