Jobless Rate Teaches What Our Politicians Don’t Want to Learn

Now that U.S. unemployment has reached a shocking 9.2 percent, we can confidently declare America’s political class knows nothing of how to foster a sound economy. Remember, this isn’t just any 9.2-percent unemployment; this is the jobless rate two and a half years after the recession hit. What does this sorry economic state suggest our leaders should do?

First, they should treat our economy as the national economy it is. Unfettered importation of cheap goods from China and other nations may comport with the mindless free-trade dogma that reigns supreme among America’s cloistered university economists, but try getting our millions of unemployed citizens to like it. It makes little sense as well to import $700 billion a year in oil, which both funds enemy nations and makes it harder to create innovative “green jobs” here in the U.S. Think it could be worse? Keep in mind that in the first three months of 2011, when unemployment was reported at 9.5 percent, the total percentage of U.S. adults without a full-time job was 16.8 percent. (The jobless rate is always worse than it appears.) Our public is simply taking a beating from inexpensive overseas labor. We need policies that will put us at a competitive advantage. For one thing, we should have a tax policy that will keep manufacturing on American shores. If companies like GE and Boeing want subsidies and tax credits, they should hire domestic labor. For another, we must grow our intellectual capital and therefore should end subsidies for higher education in areas unrelated to math and science. Financial aid to major in African dance is not an investment in our future.

The Center for Immigration Studies cites the recent jobless figures to make a different point—to call for restricted legal and illegal immigration. While I believe America must remain open to promising, innovative immigrants who desire life on our shores, tighter border security could at least spare our lower-skilled workers much pain and insecurity. But trade and immigration are two facets of the same issue: our need for a national economic policy that is truly national, meaning tighter borders and adherence to fair trade.

A second lesson our leaders should learn is that they must stop micromanaging commercial activity through such failed policies as the 2009 “stimulus.” The Obama administration falsely sold this $787-billion mistake as the only policy that experts said could jolt economic vitality and avert a second Great Depression. Instead, we reached 10 percent unemployment for much of 2009 and 2010. Our neighbor Canada, however, created no large spending programs, and used tax policy and deregulation to stimulate its economy. Before our two nations enacted recovery packages in 2009, our jobless rates were nearly identical and rising at the same pace. After the acts went into effect, however, Canada’s unemployment rate ceased to grow and then fell much further than ours would, to 7.4 percent.

President Obama has pursued dreadful economic policy—he even now admits that his talk about “shovel-ready” projects in the stimulus was misguided—and takes a stay-the-course attitude almost as galling as President Bush took after he disastrously debuted as a war leader. In the 2008 campaign, Obama talks a good game about “change.” Now is a good time to act on that idea.