Sobriety needed on economy and policy direction

Some in political, media and economic circles seem to verge on euphoric regarding the July 2009 jobs numbers released by the Bureau of Labor Statistics on Friday (August 7). Perhaps we need a little dose of sobriety.

The best that can be said about the July jobs report is that it was less bad than in recent months.

The rate of job losses is slowing, but a decline of 247,000 in nonfarm payrolls is not, in any way, shape or form, good news. And while the unemployment rate declined ever so slightly -- from 9.5% in June to 9.4% in July -- that reflected a drop off in labor force participation. Again, that’s not something to celebrate. Also, keep in mind that the employment-population ratio dipped below 60% in March for the first time since July 1985, with July’s level of 59.4% the lowest level since April 1984.

Looking ahead, it needs to be understood that an economic recovery and a jobs recovery ultimately will be all about small businesses, not about government spending more money, as the Obama administration and leaders in Congress seem to assume. Unfortunately, all of the policy measures coming out of our nation's capital, and in many state capitals as well, are negatives for entrepreneurs, small businesses and investors.  Bigger government simply crowds out the private sector. The imposition or threat of higher taxes and increased regulation mean higher costs, fewer incentives, and reduced resources for starting up, building and investing in businesses.

So, the current policy direction has made the recession deeper and longer than otherwise would be the case, and unless changed in a pro-entrepreneur, pro-free enterprise direction, will restrain the recovery once it starts.