[Congressional Record Volume 156, Number 84 (Monday, June 7, 2010)]
[Senate]
[Pages S4599-S4600]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              JOB CREATION

  Mr. KYL. Mr. President, I rise to speak about an editorial in the 
Wall Street Journal. I ask unanimous consent that this June 4 editorial 
titled ``Employers on Strike'' be printed in the Record at the 
conclusion of my remarks.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  (See exhibit 1.)
  Mr. KYL. It begins with this comment which caught my eye:

       It's too bad we can't do the Census every year, because 
     maybe the U.S. economy would then show some jobs growth.

  That is pretty interesting. The reason is because of the news last 
week that was greeted with some degree of concern by folks on Wall 
Street and elsewhere. Despite the fact that we created a net total of 
431,000 jobs in May, 411,000 of those were temporary Census hires. Yes, 
we created a lot of jobs by hiring temporary Census workers, but those 
are not private-sector, permanent jobs. That is what we should be 
doing.
  This article notes that:

       The private economy--that is, the wealth creation part, not 
     the wealth redistribution part--gained only 41,000 jobs, down 
     sharply from the encouraging 218,000 in April, and 158,000 in 
     March.

  The point being that these temporary Census jobs are not our ticket 
to economic recovery. These are temporary, government, and they do not 
add to the employment base that produces wealth.
  It is interesting that those who supported the stimulus package, 
which cost $862 billion, said there was an economic factor here called 
the Keynesian multiplier effect, that somehow a dollar in government 
spending was supposed to produce a dollar and a half in economic 
output. This is truly the creation of something out of nothing or, more 
accurately, taking a dollar out of the private sector and somehow 
creating a dollar and a half worth of value. It turns out it didn't 
happen. It never does. This is very fuzzy thinking. We cannot take 
money out of the private sector and expect that it is going to somehow 
multiply an economic output or job creation factor, when the government 
spends the money. That is $862 billion that has been taken out of the 
productive private sector.
  What happens? We either have to borrow it, which makes it harder for 
the

[[Page S4600]]

private sector to borrow money, or we have to tax the private sector, 
thereby reducing the private sector's ability to create jobs in the 
future. The bottom line, as this editorial notes:

       Almost everything Congress has done in recent months has 
     made private businesses less inclined to hire new workers.

  That problem is exacerbated by the bill which we take up tomorrow. 
This is the so-called jobs bill. It is a bill which will cost $116 
billion. It will add $54 billion to our national debt. It will further 
weaken the private sector's ability to create jobs.
  As this Wall Street Journal editorial notes:

       It's too bad we can't do the Census every year, because 
     maybe the U.S. economy would then show some job growth.

  That is being facetious, obviously. Those are not the kind of jobs 
that will productively create economic growth, because they are not in 
the private sector. They are simply temporary. I hope as we debate the 
bill over the course of the next several days, the so-called stimulus, 
we can get away from this notion that somehow or other if we take money 
out of the productive part of our economy and have the government spend 
it, that somehow or other, magically, that is going to help engineer 
economic recovery. It doesn't. Instead what we have is an economic 
recovery that is exceedingly slow and will be more so, the more 
regulation and taxation we impose on our private sector.

                               Exhibit 1

              [From the Wall Street Journal, June 4, 2010]

                          Employers on Strike

       It's too bad we can't do the Census every year, because 
     maybe the U.S. economy would then show some jobs growth. That 
     quip was one of the rueful asides we heard yesterday as 
     Americans learned that the economy created a net total of 
     431,000 new jobs in May, including 411,000 temporary Census 
     hires.
       The private economy--that is, the wealth creation part, not 
     the wealth redistribution part--gained only 41,000 jobs, down 
     sharply from the encouraging 218,000 in April, and 158,000 in 
     March. The unemployment rate did fall to 9.7% from 9.9%, but 
     that was mainly because the labor force contracted by 
     322,000. Millions of Americans, beyond the 15 million 
     Americans officially counted as unemployed, have given up 
     looking for work.
       Worst of all, nearly half of all unemployed workers in 
     America today (a record 46%) have been out of work for six 
     months or more. Normally job growth accelerates during the 
     early stages of an economic rebound, but this dismal report 
     suggests that the recovery remains well short of becoming a 
     typical expansion.
       There were some slivers of good news in the May jobs 
     report. For those who have jobs, the average work week rose 
     by 0.1 hours to 34.2 hours and earnings nudged upward by 
     0.3%. Manufacturers added 29,000 workers, and their hours 
     worked jumped 5.1%, the best since 1983.
       Perhaps this is what White House chief economist Christina 
     Romer was looking at yesterday when she cited ``encouraging 
     developments'' in the jobs market and ``continuing signs of 
     labor market recovery.'' We doubt this was the private 
     reaction in the Oval Office, whose occupant was told by Ms. 
     Romer and economic co-religionist Jared Bernstein that the 
     February 2009 stimulus would kick start a recovery in growth 
     and jobs. Whatever happened to the great neo-Keynesian 
     ``multiplier,'' in which $1 in government spending was 
     supposed to produce 1.5 times that in economic output?
       Imagine if Ms. Romer had instead promised in 2009 that 
     Congress could spend nearly $1 trillion, and 16 months later 
     the unemployment rate would be nearly 10% and that more than 
     2.5 million additional Americans would be without jobs. Would 
     Congress have still spent the cash? Well, sure, Congress will 
     always spend what it can get away with, but the American 
     public would have turned against the stimulus even faster 
     than it has.
       The multiplier is an illusion because that Keynesian $1 has 
     to come from somewhere in the private economy, either in 
     higher taxes or borrowing. Its net economic impact was 
     probably negative because so much of the stimulus was handed 
     out in transfer payments (jobless benefits, Medicaid 
     expansions, welfare) that did nothing to change incentives to 
     invest or take risks. Meanwhile, that $862 billion was taken 
     out of the more productive private economy.
       Almost everything Congress has done in recent months has 
     made private businesses less inclined to hire new workers. 
     ObamaCare imposes new taxes and mandates on private 
     employers. Even with record unemployment, Congress raised the 
     minimum wage to $7.25, pricing more workers out of jobs. The 
     teen unemployment rate rose to 26.4% in May, and for those 
     between the ages of 25 and 34 it rose to 10.5%. These should 
     be some of the first to be hired in an expansion because they 
     are relatively cheap and have the potential for large 
     productivity gains as they add skills.
       The ``jobs'' bill that the House passed last week expands 
     jobless insurance to 99 weeks, while raising taxes by $80 
     billion on small employers and U.S-based corporations. On 
     January 1, Congress is set to let taxes rise on capital 
     gains, dividends and small businesses. None of these are 
     incentives to hire more Americans.
       Ms. Romer said yesterday that to ``ensure a more rapid, 
     widespread recovery,'' the White House supports ``tax 
     incentives for clean energy,'' and ``extensions of 
     unemployment insurance and other key income support programs, 
     a fund to encourage small business lending, and fiscal relief 
     for state and local governments.'' Hello? This is the failed 
     2009 stimulus in miniature.
       It's always a mistake to read too much into one month's 
     jobs data, and we still think the recovery will lumber on. 
     But if Ms. Romer wants this to be more than a jobless 
     recovery, she and her boss should drop their government-
     creates-wealth illusions and start asking why so many private 
     employers remain on strike.

  The ACTING PRESIDENT pro tempore. The Senator from Tennessee.
  Mr. ALEXANDER. Mr. President, I congratulate the Senator from 
Arizona. There is no one more thoughtful on finance matters and job 
creation than he. He has made a very important point. It was a well-
intentioned effort by the administration to say: We have an economic 
recession so we need to stimulate the economy through some government 
spending. There were proposals on the Republican side to do that to a 
much lesser extent. But what has happened is, as the Senator has 
pointed out, the focus has been much too heavily on creating more 
government jobs, when what we need is an environment for job growth in 
the private sector. In fact, as the Senator from Arizona pointed out, 
the actions the government has taken over the last year during this 
great recession too often make it harder to create jobs in the private 
sector.
  The health care bill taxes job creators and investors. Those are the 
ones who create the jobs. The stimulus package runs up the debt. The 
higher the debt goes, the more money it sucks out of the system, and 
the harder it is to get money and to create jobs. The financial 
regulation bill makes credit harder to get on Main Street, as we now 
see it going through the Congress. If you can't get credit, you can't 
create a job.
  Jobs are at the front of everyone's mind. Our friend, the former 
Governor from Virginia, is here. He knows this very well. The Governor 
of Tennessee, Phil Bredesen, said the other day that in my State, if he 
had 100 conversations, 95 would be about jobs. I agree. But clearly a 
fundamental difference of opinion we seem to have in the Senate is our 
focus on creating an environment for job growth in the private sector. 
The Democratic focus seems to me to be much more focused on creating 
more government jobs. That is not working. Because if the economy 
continues to grow for the rest of the year at approximately the rate it 
has grown for the first part of the year, we will end the year with 10 
percent unemployment. As we all know, that burden falls most heavily on 
lower income Americans.

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