Today the Labor Department releases employment numbers for June. At a town meeting in Racine, Wisc., on Wednesday, President Obama declared, "nothing is more important than reversing the damage of the great recession and getting folks back to work."
But Obama's policies are dampening job creation. Health care reform, financial regulation, climate change legislation and large spending projects such as high-speed rail discourage employers from hiring. Until the president abandons this costly interventionism, the economy won't produce the jobs needed to significantly reduce unemployment.
Government projects create some jobs, but displace others.
In 1850 the French economist Frederic Bastiat wrote an essay entitled "That Which Is Seen, and That Which Is Not Seen." What is seen are the jobs directly created by the government; what is not seen are the workers displaced by increased taxes, tariffs and government regulation.
Bastiat wrote, "The State opens a road, builds a palace, straightens a street, cuts a canal; and so gives work to certain workmen -- this is what is seen: But it deprives certain other workmen of work, and this is what is not seen."
>>Health Care. The new health care law will create more jobs for government administrators and providers of electronic medical records. But when it is fully phased in, every employer with more than 50 workers will either have to offer health insurance or pay an annual penalty of $2,000 per full-time worker.
This discourages hiring. Firms with fewer than 50 workers won't want to grow, and firms with around 60 to 70 workers will be trying to shrink to 50 workers to cut costs. Low-skill workers will be the worst affected.
>>Cap and trade. The proposed cap-and-trade bill would raise energy prices, impose strict new efficiency standards on automobiles and appliances, require firms to use imaginary future technology, and mandate greenhouse gas emissions per person be reduced back to 19th-century levels by 2050.
Speaking about the bill in Racine, the president said, "And you know what, it will be good for our economy. It is going to drive our economy in the 21st century."
Speaking at an American Enterprise Institute conference on Capitol Hill yesterday, Rep. Paul Ryan, R-Wis., who represents Racine, disagreed, saying, "Cap and trade is a job killer."
The only direction cap and trade can drive our economy is down. Sure, if passed, it would create jobs building expensive solar panels and windmills, and inventing the technology to comply with the government's new requirements.
But the bill's $800 billion plus price tag comes from new taxes, higher prices for cheaper energy such as oil and gas, and increased borrowing. This is money lost that businesses and consumers can no longer spend on products they actually value. Higher energy prices drive companies offshore.
>>High-speed rail. Obama has allocated $13 billion for high-speed rail, which will reach small segments of the country without substituting for highways. On Tuesday, the administration announced over $2 billion in new grants. This would create some jobs building rail lines, but removing $13 billion from the private sector takes away jobs.
Uncertainty over future regulation and taxes, set to rise on Jan. 1, 2011, discourages hiring. Consumers are wary of spending because they're afraid of future job loss and higher tax bills. And Congress hasn't even passed a budget for the next fiscal year.
Approximately $372 billion of the $787 billion stimulus funds are unspent, and there's still time to reallocate the remainder. Why doesn't Congress foster more certainty by making current tax rates permanent?
As Obama reflects on today's employment report, he could do worse than consider the disappearing jobs that are the collateral damage from his policy proposals.
Examiner Columnist Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute.