As government officials and supporters of Keynesian economics will undoubtedly tout this month’s jobs report as a victory for recovery, the private sector understands the real story.
Of the reported 430,000 jobs created, only 41,000 were from the private sector. The vast majority of remaining jobs were temporary census workers, who, after the constitutional enumeration is completed, will be out of a job.
We’re glad that those who were on the unemployment rolls were able to get temporary work, even if it was with the government. The fact is, when you have a family to feed, it really doesn’t matter where that weekly paycheck is coming from, so long as you can pay the bills. But those who try to sell this job “growth” to the American people as a sustained, “V” shaped recovery are simply lying.
You cannot have sustainable recovery without the participation of the private sector, especially small businesses, because small business accounts for roughly 90% of all jobs in the country. And right now, small business is hunkering down, spending as a little as possible. Unlike government, which has a printing press, or large organizations like GM and TBTF banks which have no risk of failure because they are backstopped by American taxpayers, when a small business goes into the red they’re toast. Knowing this, most small business owners are not willing to take risks until they can be sure that things are getting back to normal. And, with regular discussions in congress about taxing everything from energy to soda pops, what small business owner is ready to make a long-term investment right now?
Believe Vice President Joe Biden’s prediction of 1.5 million new jobs created by the end of 2010 at your peril. Like 401k’s which have seen a bounce back since the March 2009 stock market lows, the job creation numbers we’re seeing today are nothing but paper gains.