Kline and Demmer : Double Team and Double Talk

John Kline (R-MN-02) was doing Double Duty on Friday.

Mr. Kline, as the U.S. House Education and Labor Committee’s senior Republican member, had to issue a statement on the U.S. Department of Labor jobs report :

“American workers and employers are looking for some glimmer of hope that the ruling party in Washington sees their struggles and recognizes the need for a change in course. Month after month, millions of Americans look for work but cannot find it. Month after month, employers seek the confidence they need to expand and thrive, but uncertainty remains. Yet month after month, Democrats in Washington keep our nation on its unsustainable path of deficit spending and looming tax hikes.
“Today’s report is not merely a monthly snapshot but the latest evidence that job creation trends are falling far short of what we need for a sustainable recovery. Our economy remains stagnant, with major indicators showing little or no change despite our need for meaningful growth and expansion. Moreover, yesterday Gallup predicted the jobs picture may be even worse than today’s report reveals, with the most recent unemployment increases not reflected in today’s numbers.
“It’s time for lawmakers to listen and learn – to listen to our constituents and learn from the failed policies that have not delivered the economic recovery the American people were promised. Republicans have made a Pledge to America to immediately focus on job creation by ending economic uncertainty, stopping out of control government spending, and taking other commonsense steps to make America more competitive. Jump-starting the economy and digging out of debt will take time, which is why we must start immediately.”

WHOA …. “ruling party… major indicators showing little or no change … failed policies … Republicans have made a Pledge to America to immediately focus on job

Is this really a statement reflective of the most recent report, or is Mr. Kline just offering “double-speak” ?

Well, let’s go to the official report and look at the details … with the important caveat to distinguish between “private jobs” and “government jobs” after all the message from Mr. Kline has been an advocate for a “smaller government”.

Total private jobs are up in September from August which was up from July and is also up from September 2009. In fact, President Obama noted that “We’ve now seen eight straight months of private sector job growth.” The increase of 64,000 jobs last month brings the total number of private-sector jobs added this year to 863,000, which is the largest 9-month gain in private payroll employment since the summer of 2007. Job openings for the private sector are 36% ahead of last year, or by 751,000 openings.

Now, look at the bottom of the report where the “Government” jobs are listed … they are down … down last month, which was down from the prior month and lower than it was a year ago … with the most reductions being in state and local governments. This would seem to be the intent that Mr. Kline wanted — yet now that it is happening, he is masking the gains by these job reductions. Mr. Kline was concerned about the influx of temporary census workers but as of September, about 6,000 temporary decennial census workers remained on the federal government payroll, down from a peak of 564,000 in May. Overall, government employment fell by 159,000 in September — that’s not all census workers – that’s teachers, police, and other service workers.

Instead of looking at the September number, it’s the trend that is important …employment in the private sector is growing, at an annualized rate of about 1.2–1.5% over the past six months … which is about the average pace of job growth in the previous recovery. The BLS is one indicator, but there are others such as the household survey which is better able to pick up jobs created by small startups. The household survey shows that the private sector has created about 1.7 million jobs year-to-date, which is about half of what the BLS number shows.
Another consideration is a report from Challenger, Gray & Christmas that stated corporate layoffs last month remained at close to the lowest level registered in the past 11 years which indicates that Corporate America has finished its downsizing.
Why … because profits are up … in fact, the National Income and Profit Accounts (which tabulates what corporations report to the IRS — meaning that is after all subsidies, etc.) set an all-time record in June.
Mr. Kline likes to complain but things are actually better than his “double talk” … for example total auto sales in September were about 2% stronger than expected and are up at a 16% annual rate from their Feb. ’09 low. Another important industry is home construction and there the Mortgage Bankers’ Association purchase index, which includes all mortgage applications for the purchase of a single-family home, is up over 20% from its low in July … the vector is going in the right direction.

But Mr. Kline doesn’t want to focus on that … sure “jobs” is an issue, but it’s not a new problem … in fact, it has been a problem for a decade.

Quickly, I see three reasons why :
1. Employee productivity. Since the end of the recession in June 2009, manufacturing output has increased by 9.6% (or by $270 billion) through August of this year, while manufacturing employment has decreased by -0.90% (or by 103,000 workers) during that 14-month period. As the LA Times reported in a story that could have had the headline “No Help Wanted Sign this time” :

Forced to cut costs during the recession, employers across the country are looking at ways to avoid hiring. They’ve accelerated use of computers and technology, replacing administrative assistants with software, cashiers with self-service kiosks and laborers with machines.

These structural changes mean some jobs that disappeared during the recession may never come back. Productivity gains are good for company profits and help the economy grow over the long run. But in the short term, the shift is exacerbating America’s jobless recovery.

2. Outsourcing … which is something that Mr. Kline’s challenger, Shelley Madore has pointed out during her campaign :

10,900 manufacturing jobs have been lost in this district since John Kline took office. According to the Alliance for American Manufacturing, Minnesota’s Second Congressional District is ranked 22nd of the 435 Districts nationwide in terms of net job losses to China due to growing trade losses from 2001-2008.

3. Population Ratio. Many economists believe that reporting the number employed as a percentage of the civilian population provides a more accurate description of the current state of employment than conjecturing the number of “unemployed” in a population. The US employment to population ratio reached a historical peak of 64.4% on an annual basis in 2000. The September 2010 data has it at 58.6%, down from 58.9% for the same period last year, and from 58.8% for the previous month in August.

The “new reality” is that higher than desired unemployment is the “new norm” — unless the tax code is changed that currently allows corporations to take deductions for business expenses associated with expanding operations in other countries.

Yet the looming question is : if Mr. Kline’s objective is to reduce government jobs … why complain when it happens … double-speak … be honest, take the credit, if that is the goal.

After issuing his press release, Mr. Kline joined Republican First District candidate Randy Demmer in what the Mankato Free Press called the Invest in Hopetour of southern Minnesota.
We’ve got to change those job-killing policies, and Randy Demmer is the right guy to help us do that,” said Mr Kline. “I think hope is something people will invest in,” said Mr. Demmer.
As the Free Press writes :

Kline and Demmer both opposed a $787 billion stimulus bill aimed at creating jobs during the deep recession of recent years, and Republicans have pointed to the still-high unemployment rates as vindication of their opposition. Democrats and some nonpartisan analysts have said the bill was successful in keeping unemployment from rising even higher in a recession that began during the presidency of George W. Bush.

One component of the stimulus plan — $1,500 tax credits for investing in new energy efficient windows and other home improvements — is promoted on the Lindsay Window website.

The stimulus package overall has helped our business through the $1,500 tax credit,” said Geoff Roise, vice president of operations at Lindsay.

Yes, the company website does promote the tax credit but neither Mr. Kline nor Mr. Demmer mentioned the other aspects of the legislation that directly impacted workers …
such as the reduced federal tax withholdings to provide tax credits in the Making Work Pay program, expansion of the child tax credit, etc.

Why Mr. Demmer choose Lindsay Windows is a little of a mystery … unless it is because the President John Roise is a loyal contributor to Michele Bachmann and the Republican Party.

After spreading his Invest in hopemessage, it was time to move on down the road. The Duo could have headed west on Highway 14 (the notorious single-lane highway that has a fatal crash rate nearly double the state average) to New Ulm and visited Caterpillar Paving. Caterpillar announced in 2009 that it would layoff 20,000 employees throughout the corporation but recently announced a $180 million investment that will lead to 1,000 new jobs
… oh, but those jobs will be in Brazil …. Yes, — remember the tax code currently allows corporations to take deductions for business expenses associated with expanding operations in other countries … so jobs will grow overseas, but not in America.

No, the Duo headed east on Highway 14 (which has seen improvements making most of it a safer as a four-lane divided highway which proved that not all “earmarks” are wasteful spending) to Owatonna for a luncheon with business leaders and then onto tour Seneca Foods in Rochester.

The obvious question that hopefully someone asked is : Invest in hope is a catchy slogan but how will jobs be created in the “new” reality of high unemployment if you oppose changing the tax code ?
Thus far, all Mr. Kline and Mr. Demmer have been united … saying NO to every jobs proposal and then double team on the double speak to ignore the positive steps that have been made. In this jobless recovery, until tax code changes are made, corporations will continue to send jobs overseas.

Considering the job losses in Minnesota Second District during Mr. Kline’s tenure, the First District must say NO to Mr. Demmer request for a job.

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