Research Briefing

As Unemployment Rises, White House Waves White Flag On Creating Jobs While Pushing Job-Killing, European-Style Agenda

IT’S UNACCEPTABLE FOR WHITE HOUSE TO ALLOW HIGH JOBLESS RATE TO BE ‘NEW NORMAL’

Today, BLS Reported That Unemployment Rose To 9.9 Percent In The Month Of April, Up From 9.7 Percent. (U.S. Bureau of Labor Statistics, www.bls.gov, Accessed 5/7/10)

Obama’s National Economic Council Director Larry Summers “Predicts Perpetually High Unemployment.” “White House adviser Larry Summers on Friday predicted that past employment rates will not return after the recession passes. ‘The best way to put it is this: Forty years ago, one in 20 men [ages] 25 to 54, in America, was not working at a given point in time,’ he said. ‘Today, the number is not one in 20. It’s one in five. And a good guess, based on extrapolations of trends in this area, is that when the economy recovers, five years from now, assuming we return to normal cyclical conditions, one in six men who are 25 to 54 will not be working at any point in time.’” (Jay Heflin, “Summers Predicts Perpetually High Unemployment,” The Hill, 4/30/10)

Obama’s Treasury Secretary Timothy Geithner Says Unemployment Will “Stay Unacceptably High For A Long Period Of Time.” (NBC’s “Today Show,” 4/1/10)

Obama’s Council Of Economic Advisers Chair Christina Romer Says Current Economic Growth “Not Enough To Get A Lot Of Job Growth.” “We still have some trouble with debt and credit availability. All of that makes it harder for us to grow … most of the forecasts are that we’ll grow about 3% real GDP … That’s not enough to get a lot of job growth.” (NBC’s “Meet The Press,” 4/4/10)

And Obama’s Economic Recovery Board Chair Says That “Unemployment Will Be Too High For Far Too Long.” “Now a special adviser to President Barack Obama, Volcker added that Americans also need to be prepared for a ‘long slog’ before the economy begins to re-engage. ‘Unemployment will be too high for far too long,’ he said.” (Jo Mannies, “Volcker Predicts Economic Recovery Will Be ‘Long Slog,’” The St. Louis Beacon, 5/4/10)

AND IT’S UNACCEPTABLE FOR OBAMA, BIDEN TO PUSH JOB-KILLING POLICIES THAT MAKE AMERICA LOOK MORE LIKE EUROPE

Vice President Biden In Spain Today As Part Of His European Tour This Week. “On Friday, Biden is … heading to Spain, which currently holds the EU presidency, and will go directly into talks with King Juan Carlos.” (“Biden Heads To Europe Warning Of ‘Pernicious’ New Threats,” AFP, 5/5/10)

• A Country Where Their Energy Plan Destroyed 2.2 Jobs For Every So-Called “Green Job” Created. “Subsidizing renewable energy in the U.S. may destroy two jobs for every one created if Spain’s experience with windmills and solar farms is any guide. For every new position that depends on energy price supports, at least 2.2 jobs in other industries will disappear, according to a study from King Juan Carlos University in Madrid …The premiums paid for solar, biomass, wave and wind power - - which are charged to consumers in their bills -- translated into a $774,000 cost for each Spanish ‘green job’ created since 2000, said Gabriel Calzada, an economics professor at the university and author of the report.” (Gianluca Baratti, “Job Losses From Obama Green Stimulus Foreseen in Spanish Study,” Bloomberg, 3/27/09)
• That Has Led To 20 Percent Unemployment. “Unemployment in Spain has reached 20 percent, meaning 4.6 million people are out of work, the Spanish government announced Friday. The figure, from the first quarter, is up from 19 percent and 4.3 million people in the previous quarter.” (“Spain Unemployment Tops 20 Percent,” CNN, 4/30/10)

Now Obama Following In Spain’s Footsteps, Pushing So-Called Cap-And-Trade Energy Plan That Could Mean Nearly 1 Million Jobs Lost Per Year. “Overall, a cap-and-trade system that reduces annual GDP by 0.34 percent per year can be expected to reduce U.S. employment by roughly 964,900 jobs per year, reduce household earnings by $37.8 billion, and reduce total U.S. economic output by $136.1 billion.” (Andrew Chamberlain, “Who Pays For Climate Policy?,” Tax Foundation, 3/09)

• Obama Pointed To Spain As Model For Embracing “Green Economy.” “Will America watch as the clean energy jobs and industry of the future flourish in countries like Spain, Japan or Germany? Think about what’s happening in countries like Spain, Germany and Japan, where they’re making real investments in renewable energy. Spain generates almost 30 percent of its power by harnessing the wind, while we manage less than one percent.” (Fox News’ “Special Report,” 4/14/09)

Obama Also Pushing For European-Style Value-Added Tax That Would Fall “Heavily On The Poor.” “[S]ome Washington policymakers are taking a fresh look at a money-making idea long considered politically taboo: a national sales tax. Common around the world, including in Europe, such a tax ... -- has not been seriously considered in the United States ... It is also hugely regressive, falling heavily on the poor.” (Lori Montgomery, “Once Considered Unthinkable, U.S. Sales Tax Gets Fresh Look,” The Washington Post, 5/27/09)

• Economist Says Instituting VAT To Pay For Binge Spending Would “Discourage Economic Growth” And Could Kill Jobs. “[T]he problems is that a VAT would be introduced not as a partial or full substitute for personal and corporate income taxes, but rather as an additional tax. This would make it much easier to close the fiscal gap by maintaining or increasing government spending and overall tax levels. Since high taxes and high levels of government spending would discourage economic growth and raise rather than lower the overall distortions in an economy, I am highly dubious about introducing a VAT into the federal tax system …” (Gary Becker, “Should The US Introduce A Value Added Tax?” The Becker-Posner Blog, 4/25/10)

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