PATTERSON: Obama’s jobs council a total flop

Anti-poverty programs are actually anti-prosperity

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When President Obama’s Council on Jobs and Competitiveness last gathered in January, he boasted, “This has not been a show council. This has been a work council. I have been tracking implementation of [the council’s] recommendations. And we’ve seen substantial progress across the board.”

Substantial progress? Six months after that meeting, unemployment remains stuck at 8.2 percent. The reality is even worse than this number suggests: Labor Department statistics only count those who have actively sought work in the preceding four weeks. If you’ve been unemployed for so long that you have decided to drop out of the labor force altogether and, say, (1) retire early, (2) move into your parent’s basement, or (3) go back to school, the government does not count you as unemployed, though you do not, in fact, have a job (you gotta love government accounting).

As Mort Zuckerman notes for US News & World Report, “If we include, as we should, people who have applied for a job in the last 12 months, and those employed part-time who want full-time work, the real unemployment number is closer to 15 percent.”

With some 47 million people under- or unemployed, no wonder poverty is creeping upward. A survey of more than a dozen economists conducted by the Associated Press found a consensus that the poverty rate could climb as high as high as 15.7 percent when new census figures are released this autumn, the highest levels since the mid-1960s. Especially disheartening: The percentage of Americans counted among the poorest of the poor, who make 50 percent or less of the poverty level, will likely remain near 6.7 percent. That’s more than 20 million Americans.

So much for the War on Poverty, the massive transfer of wealth that began with Lyndon Johnson’s Great Society — a bundle of redistributive programs like Medicaid and Medicare, designed to reduce or eliminate poverty in the United States. These types of government programs have grown since the 1960s with total means-tested welfare spending increasing 17-fold since Johnson’s day. Yet here we are, right back to poverty levels of the ‘60s. Never has so much money been spent to so little effect.

What’s going on here? Perversely, the mounds of red tape and regulations designed to reduce poverty have created a hungry government behemoth that is devouring the very resources the private sector needs to grow the economy, create jobs and reduce poverty.

People tend to forget, but the money that Washington bureaucrats spend so heartily is not created in D.C. It is the product of individuals and companies in the vast American hinterlands. When Washington takes money from the productive, private sector, wealth creators have fewer resources with which to expand their operations — and hire new workers.

Imagine if all the trillions of dollars that have been funneled into the coffers of public-sector union bosses or shunted into wasteful government programs over the last five decades had instead remained with the companies that had created the wealth. Imagine how many more businesses could have been born, and how many more jobs would exist today.

Imagine if individual workers were allowed to keep more of what they earn, how much more productively that money could be spent: deposited into a college fund, spent on a family vacation or invested in a retirement plan. Money that could be spent building an individual life instead is so often used to build our boundless federal bureaucracy.

Right now elected officials are wringing their hands, wondering what can be done to create jobs even as they smother the economy with blankets of taxes, regulations and rules. Pull the blankets aside, let the sunlight of transparency and the oxygen of liberty suffuse the soil, and some strange and beautiful flowers may yet grow in our national garden: jobs.

Matt Patterson is senior fellow, Center for Economic Freedom, at the Competitive Enterprise Institute.

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