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Bill Clinton got elected on the James Carville slogan, "It's the economy, stupid." Fourteen years later, it's the media playing stupid, as a roaring economy has been treated with more secrecy than national-security programs by newspapers and television news channels. Michael Barone points out the hypocrisy:
The Labor Department Friday announced that the number of jobs increased between April 2005 and March 2006 not by 5.8 million but by 6.6 million. As an editorial in the Wall Street Journal notes, "That's a lot more than a rounding error, more than the entire number of workers in the state of New Hampshire. What's going on here?" The most plausible explanation, advanced by the Journal and by the Hudson Institute's Diana Furchgott-Roth in the New York Sun, is that lots more jobs are being created by small businesses and individuals going into business for themselves than government statisticians can keep track of. Newspaper reports on the number of jobs usually focus on the Labor Department's business establishment survey. But over the past few years, the Labor Department's household survey has consistently shown more job growth than the business establishment survey. The likely explanation: The business establishment survey misses jobs created by new businesses. Our government statistical agencies do an excellent job. But statistics designed to measure the economy of yesterday have a hard time reflecting the economy of tomorrow.
The federal budget deficit has been cut in half in three years, three years faster than George W. Bush called for. Why? Tax receipts were up 5.5 percent in FY 2004, 14.5 percent in FY 2005, and 11.7 percent in FY 2006. That's up 34.9 percent in three years. And that's after the 2003 tax cuts. When you cut taxes, you get more economic activity, and when you get more economic activity, the government with a tax system that is still decidedly progressive gets more revenue.
The bottom line: The private-sector economy is much more robust and creative than mainstream media would have you believe.
What? Your newspaper hasn't told you about the massive addition of jobs since the Bush tax cuts? Perhaps they've mentioned the new historical highs for the Dow Jones index. No? How about that falling deficit, driven by a huge boost in tax revenues caused by record employment and increased profits (and therefore taxes) in the private sector? Page C-17, you say?
What a shock in a midterm election season!
When the last labor report came out, many people pointed to the small job growth as a point of criticism for the Bush administration. However, with unemployment at 4.6%, we're approaching the point where there aren't many left to employ. At a certain point, the unemployment figure reflects transitional status and not joblessness of any significant length. As Barone notes, it also might reflect the effect of new investment in small businesses, which do not report employment as rapidly as corporations and which created the 800,000 shortfall in the new-job count the BLS just corrected.
If critics want to see more jobs get created, then they should promote the freeing of capital for investment into the economy. Raising taxes will have the opposite effect, something George H. W. Bush found out the hard way in 1990.Sphere It View blog reactions
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