First, we’ll admit we’re not huge fans of politicians in general, largely viewing their tussles as typical politics. Nevertheless, a little empathy for President Obama, who seems to have a less-than-stellar sense of timing. During his tenure, President Obama has given national addresses during episodes of American Idol, Celebrity Apprentice and The Bachelorette—to devotees, some of television’s sacred cows. And now, as he prepares to address the nation on an issue of particular concern—unemployment—Thursday, he’ll speak opposite the TV appearance of arguably two of the most popular men in the US: Aaron Rodgers and Drew Brees.
If competing with the Packers and Saints for attention weren’t enough, the President faces no less of a challenge in addressing unemployment—and Friday’s jobs report didn’t help much. August payroll growth was unexpectedly flat (versus an expected addition of 68,000 jobs), with the establishment survey indicating private payrolls rose 17,000 while government payrolls fell 17,000—a net gain of zero jobs. The overall unemployment rate held at 9.1% as expected, but that didn’t stop many from bemoaning the US is stuck in a jobless cycle.
So what to do? Well, Obama recently named economist Alan Krueger to lead the White House Council of Economic Advisers—and many expect him to be a vocal proponent of government involvement in kick-starting job creation. But most eyes will be on the President’s speech, in which some expect him to call for extending the payroll tax break and unemployment benefits, while others are looking for suggestions like an infrastructure bank. But most don’t expect to hear much in the way of ground-breaking suggestions—more likely calls for Congress to act on topics already widely discussed.
And that shouldn’t surprise much for a couple reasons. First, consider that though Friday’s unemployment report was undoubtedly weak, there were bright spots as well. The household survey reading was the strongest in more than a year and the second strongest since 2007 if census distortions are excluded—possibly explained by smaller firms primarily contributing to job growth yet not being captured directly in the survey.
Second, it’s interesting to note recent employment growth has primarily come from private payrolls—while government payrolls continue to shrink. Which ties into something we’ve said before: The suggestion there’s much government can realistically “do” about job creation is likely an optimistic one. Unless by “do something,” you mean undo something—like regulatory burdens on private enterprise. We recently discussed domestic regulatory burdens can be heavy. And while some rules are necessary to order a complex economy and ensure property rights, the vast majority likely necessitate businesses redirect resources to compliance efforts, rather than production or hiring efforts (for example).
So the President undoubtedly faces a difficult task next week—one we largely believe politicians from either side of the aisle would struggle to address, given our view government has limited efficacy in areas better left to private enterprise. And while his address likely spurs more of the same political rhetoric, the NFL’s return will renew some age-old debates of its own: How strictly should unnecessary roughness be enforced? How about excessive celebration? To which many fans respond, “Come on, let ’em play!” When it comes to private enterprise—the primary engine of US economic growth—we’d similarly urge regulators and politicians alike, “Let ‘em play!”