Dark Clouds from Kudlow
Let me get that three day weekend off to a rippin' start. Lawrence Kudlow, the financial community's most inveterate optimist, looks in the lobs numbers and sees dark clouds:
Veep Joe Biden is out there saying the Obama stimulus plan has saved or created 150,000 jobs in the administrationís first 100 days and another 600,000 in its second 100 days. But he sure isnít talking about small-business jobs.
In fact, itís hard to know what heís talking about. Uncle Sam has borrowed $388 billion in the second quarter and is scheduled to borrow $406 billion in the third quarter and nearly $500 billion in the fourth. In order to provide $152 billion in so-called fiscal stimulus, the government is draining close to $800 billion from the private-sector savings supply -- $800 billion that will not be invested in new-business enterprises, including small businesses.
Borrowing from Peter to redistribute to Paul is not fiscal stimulus. Itís a fiscal depressant. Small businesses are having enough trouble getting their hands on credit. And now they canít find enough capital for new start-ups. The government prospers, but the small-business sector sinks.
Kudlow's point is the differential between the payroll survey and the household survey. This was a staple of his when they were flipped (some Texas guy was President) and the job growth was in the household survey, which captures entrepreneurial and small company jobs. He felt it bullish Schumpeterianism that big company jobs were losing to start ups.
Now the trend has reversed. Big companies and government are adding workers, and the household survey losses are staggering.
Happy Labor Day!
Posted by John Kranz at September 4, 2009 5:47 PM
Let's see ... 750,000 jobs created or "saved" in 200 days. Take them all as created and disregard the "saved" business for the canard that it is ... and we have 750K new jobs in just over six and a half months, or 115,384 jobs per month. Stuart Varney tells me it takes 100,000 jobs per month just to keep the unemployment rate constant. So the question is, if Uncle Joe is going to make up specious job creation claims why doesn't he claim enough to make a difference?
Damn. I should have seen it in the first place. He can't claim administration policies are making a difference because everyone can plainly see that nothing has changed.