No Mr. Biden, The Economy Is Not Doing Fine – It’s a Mess

For months now you have been listening to President Joe Biden (D) enthrall audiences with his Bidenomics plan. I’m pretty sure that Mr. Biden has no idea what Bidenomics is nor how it works – after all he is just reading words from a teleprompter that somebody else wrote. And as wondrous as Mr. Biden may portray Bidenomics, it is still the same old liberal/progressive baloney employing massive federal spending and increased taxes in an effort to redistribute wealth. It hasn’t worked since President Franklin Delano Roosevelt (D) employed it in the late 1930’s and early 1940’s and it isn’t working now. (It was the thesis that underlay President Lyndon B. Johnson’s War on Poverty which, according to a Heritage Foundation study in 2014, resulted in spending $22 Trillion – and increasing at just under $1Trillion per year – without any material impact on the percentage of Americans living in poverty. It doesn’t work and for the simplest reason:

Give a man a fish and you will feed him for a day; teach a man to fish and he will feed himself for life – welfare vs. work.

America’s eighty year fascination with socialism (the welfare state) has resulted in a widening of the gap between the rich and the poor and that helps explain why there are so many billionaires, hedge fund managers, financiers and trust fund maggots who support the liberal/progressive movement – keep them fed enough for dependency but not so much that they become independent.

And one of the elements that Mr. Biden routinely points to is the record low unemployment in America – but it’s a lie. I don’t mean to single out Mr. Biden on this because the same lie was been being told by successive administrations (Republican and Democrat alike) and accepted by successive congressional sessions for at least fifty years. Mr. Biden guilds the lily when he claims the low unemployment numbers are basically affirmation of “full employment.”

However, as you look around at the increasing number of homeless, the empty business offices, the closed retail establishments and the increasing welfare roles, you have to wonder how “full employment” looks like this. Well, it’s pretty simple – it isn’t full employment – it isn’t even close. The homeless, the welfare generations, the down and outs aren’t included in the number of unemployed. According to the Economic Policy Institute:

“The unemployment rate measures the share of workers in the labor force who do not currently have a job but are actively looking for work. People who have not looked for work in the past four weeks are not included in this measure.”

That is basically the same definition used the United State Department of Labor and the Bureau of Labor Statistics to determine eligibility for the unemployment welfare benefits. In other words all of those people without employment – and even those actively seeking employment but whose unemployment welfare benefits have expired are excluded from the calculation of those determined to be “unemployed.” You might say that is nonsense – and it is – but the fact is that it is true while still being nonsense. It’s just the government putting lipstick on a pig. By arbitrarily excluding a large segment of the population that is jobless, you can pretend that the jobless problem is very small – that the government is successful in managing the economy. And that is precisely why they do it. If the government is seen as failing in managing the economy, voter sentiment will shift from benign acceptance to open hostility.

Surprisingly, the government tracks a more reliable measure of our employment condition. It is called the Labor Force Participation. The Labor Force Participation Rate is calculated by adding the number of persons actually working to those actively seeking work divided by the total number of working age people (excluding homemakers, military men and women and those unable to work). During President Barack Obama’s administration that figure dropped dramatically from 66.2 percent to as low as 62.3 percent during the seventh year of his presidency. (For those forced to endure a teachers union led education in the Portland Public Schools, that means that only 62.3 percent of the work-capable population of America was actually working or actively seeking work). During President Trump’s administration while that figure recovered from Mr. Obama’s decline it remained fixed stubbornly at about 63.1 percent. When Mr. Biden became president that Labor Force Participation Rate dropped dramatically to just over 60.2 percent and it struggles today to get back to the rate achieved during Mr. Trump’s administration.

And even at that, the Labor Force Participation Rate treats those currently unemployed but eligible for unemployment benefits as if they are working. Just to give you an order of magnitude the Bureau of Labor Statistics pegged that at 1.81 million people without jobs but still counted as “employed.” That’s still putting lip stick on the pig but just a lighter shade of pale.

Now here is the kicker. The total available workforce in America currently is about 164.3 million. Remove the 1.81 million (see above) that are counted as working but really aren’t and the 65.72 million who aren’t working but are not counted as unemployed and you will see that leaves only 96.77 million working Americans. And then remove from that figure the 9.1 million people (excluding military personnel) that work for the federal government and the approximately 19.23 million people working for state and local governments and you find that there are only 68.44 million people making a net contribution* to the American economy – 68.44 million Americans making a net contribution to a nation of 164.3 million available to work.

One of our good friends in Portland regularly reminds us that we have well passed the point where there are more people riding in the wagon than are pulling the wagon. And this is what it looks like. And this is why the government uses these patently false numbers to convince us that the economy is doing fine when in fact we are in a slow slide to economic ruin.

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* I use the term “net contribution” accurately but with some trepidation. I say “accurately” because, although government workers may pay income, sales and property taxes, they also receive more than those amounts from the governments’ tax revenues and thus are net recipients of government funds. But with trepidation because I appreciate that there are many people working for federal, state and local governments that are necessary to ensure that society runs in an orderly manner. I simply lack the available resources to dissect those statistics to anything more granular. To be sure, society would not run efficiently without our police and fire personnel, classroom teachers (as opposed to everybody else employed in education) and transportation workers.