Hanna: ‘Recovery Summer’ Fizzles While Nation Sizzles

Posted July 9, 2010 at 10:45am

The latest jobs figures indicate that President Barack Obama’s political forecasts are as bad as his economic ones. It was just a few weeks ago that Obama, Vice President Joseph Biden and other leading Democrats were trumpeting the idea that, thanks to the stimulus, the nation was headed into “recovery summer.” They forecast that unemployment would be coming down and economic activity, fueled by hundreds of billions of dollars in federal spending, would be going up.

[IMGCAP(1)]Instead of recovery summer, what we now see is more like, for those of you who remember “Seinfeld,” “the summer of George.” And like George Costanza, the economy is spending the summer flat on its back.

Unemployment claims are up. So is the number of Americans who have left the work force. Home sales are down dramatically despite near-record-low mortgage rates. Growth in the manufacturing sector has slowed to a trickle. And the biggest fight in Washington, D.C., as Congress adjourned for the July 4 recess was not about pro-growth incentives but about how best to mitigate the economic damage.

Once again, America is not getting what it was promised when Congress voted to toss billions of dollars at so-called “shovel-ready projects” to kick-start the economy. Instead, the nation is precariously poised on the edge of a double-dip recession.

Too much government activity and spending have crowded out productive activity in the private sector, leaving the least among us holding the bag. Diana Furchtgott-Roth, a labor economist with the Hudson Institute, suggests that even the drop of two-tenths of 1 percent in the unemployment rate is an ominous sign rather than “welcome news.”

“The Labor Department’s jobs report for June showed the labor force shrinking by 652,000 workers as discouraged workers left the labor force,” she says, “while the broadest measure of unemployment, which includes discouraged workers, is 16.5 percent.” On top of that, Furchtgott-Roth found, the percentage of Americans who are in the labor force has declined to the level it was in the summer of 1985 — a true “recovery summer” midway through the creation of 20 million new jobs.

The Obama administration has already loaded up the economy with billions in new taxes to pay for health care reform, new mandates that have killed jobs and choked off productivity, and — with things like the cap-and-trade energy tax, financial reregulation and other big-ticket items still on the table — they now promise more of the same to come. This leaves employers wondering whom they can hire, when, and for how long.

Doubt and insecurity about what is around the next corner are increasingly pervasive. What new incentives, disincentives and new regulations might be next on the Obama agenda? It is therefore no surprise that the U.S. economy continues to flounder. Instead of a “recovery summer,” we swelter in place, fearful that a double-dip recession may well be the next major change in the economic climate.

Colin Hanna is president of Let Freedom Ring, a conservative organization.