Road to Recovering From A Weak Economy

By Dr. Bill Smith: In today's environment, we tend to focus on the actions of the President, his appointees, and the members of Congress. However, we also need to look at the numbers.

Ignoring the numbers keeps us in the dark as to the facts of what we need to do. Unfortunately, in the last decade, few of those elected have had practical business experience. However, that was not always the situation. Consider our early presidents. Our first three presidents George Washington, John Adams and Thomas Jefferson owned and operated farms. Their business experience helped them in office to understand the economy and the need to protect private property rights and personal liberty.

On Sept. 2, 2011, the U.S. Bureau of labor Statistics reported that there was zero employment growth in August 2011 and that the unemployment rate remained at 9.1 percent. These numbers caught our attention because of President Obama repeatedly claimed that his programs were going to create jobs. We Quickly understood that the numbers “0” jobs and 9.1 percent unemployment were significant and serious.

There are other numbers that shed light on our economic situation. In a recent newsletter, the Arkansas Policy Foundation (APF) executive director, Greg Kaza, identified the following "economic indicators that underscore the weak recovery evident since the recession formally ended in June 2009. These indicators have not recovered to their pre-recession (4Q-2007) levels. . . ."

Gross Domestic Product has expanded for eight consecutive quarters since 2Q-2009 but remains less than its pre-recession level.

Payroll employment is higher (131,132,000 in August 2011) than at the end of the recession (130,493,000), expanding in 10 of the last 12 months. The growth, however, has been so weak that it has not significantly reduced the national unemployment rate (9.1%), and employment is less than its pre-recession level (137,899,000 in November 2007).

Industrial production is also higher than at the end of the recession but lower than its pre-recession level. This indicator measures the output of the nation's factories, mines and utilities.

What about the economy of the states? Below are a couple of examples:

In Arkansas, after 43 years, employment by Arkansas' Manufacturers is now at the “1968” level. Also, "Government" (all levels including colleges and universities) is the largest employer. When this is coupled with the number of people on government subsidies, we can note that Arkansas is heading in an unsustainable direction. This same can be said for other states.

Fortunately, in 2010, Arkansas voters elected many new fiscal conservatives to state and local levels of government. If this trend continues in 2012, and elected officials are able to reduce both the size of government and general government spending, Arkansas which will be on the road to economic recovery.

In the Florida 2010 elections, the voters increased the number of fiscal conservatives in state government including the Governor’s office. As a result, there have been significant actions to reduce both the size of government and government spending. In 2012, if Florida continues electing fiscal conservatives to reduce and limit the size and scope of their state government, Floridians can expect a strong economy.

Finally, voters in the 2012 U.S. elections will have the potential to elect a majority in  Congress and a President who are committed to capping spending, cutting wasteful programs and spending and pursuing a balanced budget. If this happens, their actions should lead us down the road to recovering our weak economy and will yield improved economic numbers.
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Dr. Bill Smith is a certified cost analyst, National Contracts Management Association fellow. He is a retired Air Force acquisitions and contracting officer having directed billion dollar programs. He is also a retired graduate business professor and assistant professor in workforce education and development. Presently, Dr. Smith is a conservative activist and writer and is the editor of the ARRA News Service and several other blogs.

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