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EDITORIAL: Gloomy prospects
Politicians splurge and the economy sputters
Barack Obama has been president for 51 months, and America is still waiting for that change he told us to hope for. The latest economic indicators continue to point in the wrong direction: Durable-goods orders are falling, growth in factory output is sluggish and optimism is dissolving.
The Commerce Department’s figures for orders of “durable goods” (a durable good is anything from a washing machine to an airplane designed to last for more than three years) plunged 5.7 percent in March. This is one of the tea leaves economists read as a signal of faltering economic growth.
Similar alarms have sounded across the country. The Richmond Federal Reserve Bank last week reported that factory output in Virginia, Maryland and the District of Columbia had contracted sharply, despite the influence of federal government spending. This mirrors the Philadelphia Fed’s recent analysis showing a slump in business activity and employment in its region. These data are consistent with the national drop in the Conference Board’s Leading Economic Index.
When businesses struggle, it puts a squeeze on individuals and families. Every week, 360,000 workers are thrown onto the unemployment lines for the first time. Last month’s underwhelming news that 88,000 new jobs were created doesn’t come close to providing relief to the 11.7 million currently looking for work.
The official unemployment figures understate the magnitude of the problem, because they only measure workers claiming benefits. The long-term unemployment number hasn’t budged in a long time. Millions fall out of the official statistics because they have given up hope.
Not all “job growth” is good. In the latest issue of Reason magazine, Arizona surgeon Jeffrey A. Singer details the rise of a new category of worker, the “billing department coding specialist in the health care industry.” Thanks to Medicare and Medicaid, physicians must devote their resources not to hiring extra nurses or medics who can assist in treating patients, but to specialists with the knowledge to cope with the complexity of government billing codes. Jobs that serve only the needs of the federal government do count in the monthly employment reports, but these jobs won’t restore America’s economic health.
A recent survey of small businesses by U.S. Bank shows the gloomy mood continuing to spread. Business owners were almost evenly split between whether the economy was in a recession or recovery, but only 16 percent expect to hire anyone soon — down from 20 percent last year. Only 28 percent, compared with 32 percent previously, expect to increase capital spending.
That means nearly three out of four businesses lack confidence in Mr. Obama’s economy. They’re afraid of the consequences of rampant government spending and the crushing burden of high taxes. Unless Washington gets its fiscal house in order, the hope that the economy will improve is miserably misplaced.
The Washington Times
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