Why Is American Unemployment Under Obama Rising Faster Than In Other Countries?

Even liberals have begun to come to the conclusion that Barack Obama has been a bust on creating jobs, as evidenced by a recent New York Times piece.  The Russian and formerly communist Pravda has likewise recently excoriated Obama as quintessentially bringing the “change” of economic destruction rather than job creation and prosperity.

Barack Obama and his team assessed the economic conditions, and proposed that the answer was his giant $3.27 trillion stimulus package.  The Obama administration claim was that unemployment – then at 7.2% – would be held under 8% if he got his stimulus.

Now it is at 9.8%, and is expected to continue to climb significantly higher.

Meanwhile other governments – who have in recent months elected conservatives – have turned their economies and their unemployment numbers around.

Meanwhile America, under the leadership of a wise and wonderful messiah who can do no wrong, has increasingly crawled into the toilet bowl.


John Lott  FOXNews.com    October 22, 2009
LOTT’S NUMBERS: Why Is Unemployment Rising Faster In the U.S. Than Other Countries?

Did all that stimulus money just lead to higher unemployment rates?

The Obama administration claims that it was their passage of massive government spending that saved the United States from another Great Depression.  Last week, Larry Summers, Obama’s top economic adviser, claimed that because of the stimulus:

“We have walked a substantial distance back from the economic abyss and are on the path toward economic recovery.  Most importantly, we have seen a substantial change in the trend of job loss.”

And Vice President Biden declared at the end of September:

“In my wildest dreams, I never thought it [the stimulus] would work this well.”

As President Obama and other Democrats have correctly pointed out many times, this has been a worldwide recession. But if Summers and Biden are right in their assessment of the stimulus measures, one would think that the U.S. economy should be recovering better the many other countries, countries not wise enough to follow Obama’s lead of an extraordinary $787 billion increase in government spending.  It is also particularly timely to evaluate the spending since Christina Romer, the chairwoman of President Obama’s Council of Economic Advisers, told Congress today that the stimulus had already had most of its impact on the economy.

Take Canada. Their stimulus package was nowhere as extensive as ours.  Their $22.7 billion in stimulus spending this year, and $17.2 billion next year, amounts to about 7.5 percent of their federal spending for their 2009 and 2010 budgets — not much more than a third of the per-capita stimulus spending in the United States.

Has Canadian unemployment climbed higher than than ours because of their relative inaction? Hardly. Last September, unemployment in both Canada and the U.S. stood at 6.2 percent. By January, when President Obama took office, the U.S. unemployment rate was 7.6 percent; Canada’s was at 7.2 percent.  But since then U.S. unemployment has gone up much faster. In September, the U.S. unemployment rate had soared to 9.8 percent, while the Canadian rate had only increased to 8.4 percent.

But it is not just Canada where the unemployed are faring betterOther countries, too, decided against a massive stimulus plan. In March, with German Chancellor Angela Merkel nodding in agreement at his side, French President Nicolas Sarkozy declared: “the problem is not about spending more.” Later that month, the president of the European Union, Prime Minister Mirek Topolanek of the Czech Republic, castigated the Obama administration’s deficit spending and bank bailouts as “a road to hell.” The Washington Post wrote that there was a “fundamental divide that persists between the United States and many European countries over the best way to respond to the global financial crisis.”

The unemployment rate in the European Union was higher than in the United States to begin with even before the Obama administration’s spending. By January, the EU unemployment rate stood at 8.5 percent — almost a whole percentage point higher than ours.  So what has happened since the big U.S. stimulus spending spree was passed? We more than caught up with the EU’s high unemployment rate.  By August, the last month data is available for the EU, the U.S.’s unemployment rate slightly exceeded the EU’s — 9.7 versus 9.6 percent.

Germany has particularly been out front resisting the call for more public spending.  Yet, from January through September, the German unemployment rate only rose slightly, from 7.9 to 8.2 percent.

Data on unemployment rates from 27 countries from Japan and South Korea to Brazil and other South American countries to Europe shows that from January to August display the same consistent pattern.  Even in the EU it isn’t just a few countries that are driving the relatively small increase they have experienced.  The U.S. had a larger increase in unemployment than 22 countries — that is, 81 percent of the countries had a smaller increase in unemployment this year than the United States. Unemployment in some major countries such as Brazil and Russia has actually fallen since January (see Table here).  Other countries, from France to Mexico to Australia to Switzerland, have seen unemployment increase by only about half the amount of the U.S. rate. Indeed, the average increase in unemployment for the 27 countries is slightly less than half the US increase.

Table 1 can be seen here.

As Canada illustrates, it isn’t just countries that had higher unemployment rates before we passed our stimulus plan who have had smaller increases in unemployment this year. About half the countries had lower unemployment rates than the U.S. in January and half higher rates, but both groups of countries have seen much smaller increases in unemployment than the United States.

For thirteen countries in the Organization for Economic Co-operation and Development it is possible to use estimates of the size of different countries stimulus programs and compare it to the change in unemployment rates. Countries with larger stimulus spending tended to have bigger increases in unemployment.  Each one percentage point increase in a country’s GDP that is spent on a stimulus was associated with unemployment increasing by about a third of a percentage point.  The impact isn’t statistically significant, but any increase in unemployment hardly comforts nations that are piling up huge debts.

Figure 1 can be seen here.

So why would more stimulus increase unemployment? Spending almost a trillion dollars on various stimulus projects means moving a lot of resources from areas where the private sector would have spent it to the public sector thus eliminating the jobs many people currently have.

Jennifer Psaki, a White House spokesperson, declined numerous requests to answer any questions from Foxnews.com regarding the findings shown here.

The unemployment data from other countries raises serious questions about the large government-spending program, especially since the U.S. program that was primarily sold as a good way to create or save millions of jobs. With the Obama administration and Congress already talking about possibly providing another $200 billion to extend these government-spending programs, these data raise real questions about the efficacy of this spending.

John R. Lott, Jr. is a Foxnews.com contributor. He is an economist and author of “Freedomnomics.”

So it wasn’t just the Republicans (who voted against the porkulus and predicted it would utterly fail) who opposed Obama’s policies.  It was much of Europe.  The Europeans compared Obama’s “change” to “a road to hell.”  And they said, “the problem is not about spending more money” in direct contradiction to Obama’s fundamental economic philosophy.

And the Republicans and the Europeans were right, and Obama was wrong.

Now Obama seems to reasoning, “if your going to be wrong, be spectacularly wrong.  And don’t stop digging that hole deeper.”

But it’s not enough that Democrats are taking all the money out of the private sector and giving it to the government to dole out on useless pork projects; now they’re talking about encouraging the rich to shelter their money rather than invest it in future economic growth, too.

After offering the ridiculous argument that ending the Bush tax cuts wasn’t actually a tax increase because (after all) the Bush tax cuts were “controversial,” Pelosi continued to wax idiotic:

What about allowing those tax breaks to expire at a fragile time in an economic recovery, the speaker was asked.

“I don’t think many people here see, nor do the American people see those tax cuts at the high end as being job-creating,” she said. “They don’t… think that that’s part of the reason we’re in the fiscal, the budgetary situation that we’re in, because those tax cuts cost money. And… they were… a cost to our budget, without any commensurate impact on the economy for job creation. To return money to the treasury. So, nobody sees those as a job-creator.

The thing is that Pelosi and the Democrats are simply factually wrong.

From the New York Times, in an article entitled, “Sharp Rise in Tax Revenue to Pare U.S. Deficit” published July 13, 2005:

WASHINGTON, July 12 – For the first time since President Bush took office, an unexpected leap in tax revenue is about to shrink the federal budget deficit this year, by nearly $100 billion. […]

Mr. Bush plans to hail the improvement at a cabinet meeting and to cite it as validation of his argument that tax cuts would stimulate the economy and ultimately help pay for themselves.

It’s amazing that mainstream media liberals always seem to see both successes for Republican policies and failures for Democrat policies as “unexpected.”

Pete Du Pont wrote in Opinion Journal that:

Tax rate reductions increase tax revenues. This truth has been proved at both state and federal levels, including by President Bush’s 2003 tax cuts on income, capital gains and dividends. Those reductions have raised federal tax receipts by $785 billion, the largest four-year revenue increase in U.S. history. In fiscal 2007, which ended last month, the government took in 6.7% more tax revenues than in 2006.

Americans in high tax states are voting with their feet and leaving.  And the states with the highest income taxes such as New York, California, and Hawaii, are facing the biggest revenue shortfalls.

In spite of being warned that liberal class-warfare tax-the-rich-to-extinction policies would lead to Dodo-bird results, New York attacked the rich with a 31% income tax hike.  And all they have to show for their eat-the-rich tax policies is record revenue shortfalls.

Gary Alexander writes in an article entitled, “Texas is Winning the New Economic War Between the States“:

Don’t look now, but there’s a new War Between the States under way, and the south is winning. The most dramatic winner is Texas. The cover story of a recent (July 9) issue of The Economist compared California with Texas and implied that the Golden State is falling apart, while the Lone Star State is leading the nation out of the recession.  Then, in a mid-July issue of National Review, Kevin D. Williamson said the nation is “Going Alamo,” with new jobs and businesses tipping southward, draining California, the Midwest, and Northeast of their former economic glory.

One indicator of the trend, according to Williamson, is the cost of renting a U-Haul truck for a one-way move.  From Austin, Texas to San Francisco, California, the cost is $900, while a one-way rental from San Francisco to Austin is $3,000, due to the exodus of trucks from California.

All this makes sense.  We are a mobile nation.  People can move easily enough (especially if they rent), and capital can move even faster.  Capital, jobs, and businesses will go where they are most welcome, while capital leaves places where it is punished by higher taxes and over-regulation.

Since all 50 states have a common currency and no border guards or toll gates, relocation is purely an economic decision.  Capital says to governors: “Hurt me enough and I’ll divorce you.”

Texas is Now America’s #1 Economic Engine

When Barack Obama and Nancy Pelosi get their way and raise Americans’ taxes, instead of capital flowing to Texas, it will flow overseas, and into tax shelters.  And the money that would have been available to invest in job creation will never materialize.

Conclusion: Vote for fewer jobs and more taxes.  Vote Democrat.

17 Responses to “Why Is American Unemployment Under Obama Rising Faster Than In Other Countries?”

  1. John Ryan Says:

    for the first time in MANY years the unemployment rate has NOT gone up in 4 months

  2. Michael Eden Says:

    I don’t know how “many” years its been since unemployment didn’t go up for 4 months.

    I also don’t know why it matters whether it blipped up a tenth of a point or not.

    What I DO know is that I preferred the unemployment rate in 2006 – the last year the Republicans were in charge:

    4.7 4.8 4.7 4.7 4.6 4.6 4.7 4.7 4.5 4.4 4.5 4.4 2006 unemployment

    If you like Obama’s frozen 9.7% rate better because it hasn’t gone up in four months (it’s likely to artificially go down due to the millions of temporary census workers, for the record), more power to you, I guess.

    Oops. What is that I see? When Bush and Republicans ran the country, I now see that we had – what do you know – FIVE consecutive months where the rate didn’t go up:

    4.8 4.7 4.7 4.6 4.6

    And those five months were immediately followed by another period of four consecutive months without the unemployment rate rising:

    4.7 4.7 4.5 4.4

    And it was HALF the present rate at that.

    So I guess “MANY years” means four years for a liberal, then…

    Which explains why you are such ignorant and shortsighted people.

    You Democrats. I don’t know whether I should be utterly contemptuous of you, or merely find you pathetically amusing.

  3. Robert in NYC Says:

    These issues are not really party-specific and all this finger pointing is simply tedious.
    Please note, “US Job Loss” between Dec. 2007 and Jan. 2010:
    Many of these combative comments seem only marginally relevant to our current economic conditions. Let’s try to learn from the past mistakes, by both parties, as we look to an uncertain future.

  4. Michael Eden Says:

    First of all, I’ll deal with your link. It just doesn’t jive with the facts. And there’s no mention of where it came from.

    Here’s a graph based on US Bureau of Labor Statistics numbers that just contradicts it

    Unemployment, month by month:
    Dec 2007: 5.00%
    Jan 2008: 5.00
    Feb 2008: 4.80
    Mar 2008: 5.10
    Apr 2008: 5.00
    May 2008: 5.40
    Jun 2008: 5.50
    Jul 2008: 5.80
    Aug 2008: 6.10
    Sep 2008: 6.20
    Oct 2008: 6.60
    Nov 2008: 6.90
    Dec s008: 7.40

    Jan 2009: 7.70%
    Feb 2009 8.20
    Mar 2009 8.60
    Apr 2009 8.90
    May 2009 9.40
    Jun 2009 9.50
    Jul 2009: 9.40
    Aug 2009:9.70
    Sep 2009: 9.80
    Oct 2009: 10.10
    Nov 2009: 10.00
    Dec 2009: 10.00

    Now you look at those numbers, month by month, and you explain how the graph of unemployment would be identical (i.e. a mirror image) between 2008 and 2009. Sorry, Charlie. Not happening.

    Second, Mr. New York City liberal, don’t think you people can demonize Republicans and Bush for eight years and then not get it back. We remember your Bush derangement syndrome. And payback is a bitch.

    I once put it this way: “Do unto Obama as liberals did unto Bush.”

    I never cease to be amazed at liberal chutzpah: You people were – and continue to be – positively vile in your demagoguery and demonization of conservatives even as you demand that we treat you with kid gloves.

    When Barack Obama, Nancy Pelosi, and Harry Reid stand before the American people and confess, “We were immoral for the way we demonized our fellow Americans for their conservative values, and we will demonstrate our accountability by resigning from office,” I’ll lay down my arms. Until then, it’s keep firing away.

  5. debrarae Says:

    THank you for posting this. It’s very insightful!

  6. Michael Eden Says:

    Thank you, Debra Rae.

    Always nice to hear that something you worked on is appreciated.

  7. John Barkley Says:

    All I can say is that I voted for Bush and have regretted it ever since. I voted for Obama hoping that he is intelligent enough to dig the country out of the hole that idiot Bush put us in. And for those who watch the distortion of facts on Fox, Bush was the instigator of the bank bailouts. So if you feel that was a bad thing, then learn to blame the one who did it and wake up and realize that Fox lies and distorts everything. Get your news somewhere else guys.

  8. Michael Eden Says:

    Okay. DON’T get my news from the most trusted name in news, according to many, MANY media studies.

    Examples: Public Policy Polling, and in fact the most trusted news channel in the U.S. even according to British socialist spin.

    Let me quote the left-leaning Public Policy statement for you:

    Americans do not trust the major tv news operations in the country- except for Fox News.

    Our newest survey looking at perceptions of ABC News, CBS News, CNN, Fox News, and NBC News finds Fox as the only one that more people say they trust than distrust.

    Fox News is also the least biased in its coverage, according to US News & World Report.

    Fox News has the most fair and balanced coverage, according to the Center for Media and Public Affairs.

    But you don’t want “the most trusted name in news,” do you? Nope. You like Rachel Mad Cow and the toxic whackjob Keith Olbermann.

    You can search my posts and not find much about the $700 billion TARP ($350 billion of which Bush left for Obama, btw). That’s because at that time, and frankly since, it is impossible to say that that monster wasn’t needed. That said, we CAN say that Obama’s vastly more expensive $3.27 TRILLION stimulus porker was a failure. It didn’t create any jobs, and it even absolutely failed by Obama’s own “It’ll keep unemployment under 8%” metric.

    For what it’s worth, there were a lot of conservatives who criticized TARP at the time. And guess what? You could catch it on Fox News, which very accurately reported the facts, and offered very good and balanced analysis.

    You’re the kind of moron who watches ABC because it’s so “fair.” That’s because you’re just nowhere NEAR smart enough to know that ABC’s political director Mark Halperin literally instructed his reporters NOT to be fair in their coverage of George Bush vs. John Kerry. He said in a memo: “We have a responsibility to hold both sides accountable to the public interest, but that doesn’t mean we reflexively and artificially hold both sides “equally” accountable when the facts don’t warrant that.” Which is to say, he told his reporters to be much harsher on Bush than Kerry. Nor are you smart enough to know that ABC’s top political correspondent George Stephanopoulos was Bill Clinton’s chief spin doctor before he became “a journalist.”

    You don’t know that FOR YEARS, study after study and survey after survey have revealed an AMAZING liberal bias in “journalism.”

    Here’s a little factoid about those “journalists” you trust because you’re too damn stupid to want legitimate news coverage:

    Polling of MSM journalists showed they voted 9-1 in favor of Bill Clinton over George H.W. Bush in 1992 and voted in the same margin for John Kerry versus George W. Bush in 2004.

    How about this little quote – coming from MSNBC!

    “The pattern of donations, with nearly nine out of 10 giving to Democratic candidates and causes, appears to confirm a leftward tilt in newsrooms”

    Geez. People like you leave me shaking my head like a Parkinson’s victim.

  9. Penumbra Says:

    A comment, just after a brief look:

    It is hardly possible to boost a country’s economy in the modern world by starting infrastructural projects and things like that. This is basically an old-fashioned Keynesian economics and it does not work anymore.

    The reason is the new open market world. The money that the government spends to pay the entrepreneurs and the workers are not spend buying American products but products imported from China, Germany, Japan, etc. When I heard of Obama’s idea of rescuing US economy in this way, I immediately understood that this was a certain path to failure.

    Printing money and increasing inflation is definitely a socialistic way of solving economic decay.

    We had this experiment here in Sweden during the 1980:s and it resulted in a huge crises. We learned our lesson then. Today we are one of the few European countries without economic problems (although we still have high unemployment ratings, approx. 8%). The solution was government spending cuts and an independent Bank of Sweden (independent from political influence) with the one and only task to keep the inflation below a maximum of 2% per year. In this case you should learn from us.

  10. Michael Eden Says:

    Great points all, Penumbra.

    And good job being Swedish (I’m a quarter Swedish myself, with a set of Great Grandparents who emigrated from Sweden who went by the name Benson). The “rest” of me is English. I’m proud of both sides of my heritage.

    You are right about the fact that many of the dollars that the government uses to “stimulate” the US economy end up going to the Chinese, or to Asia, or to some other part of the world, rather than to America or American workers. A great example of that is the “green projects.”

    Most of the solar panels and the batteries and even the technology and the installation to build the green power plants in America come from somewhere else. We’re not building them here; we’re paying Asian countries to build them. And even paying Asian factories to build the power plants. We end up being left with relatively low-paying maintenence jobs here in America for all of our billions. And studies in Spain examining the same phenomena showed that at least 3 petroleum industry jobs (that paid better) were lost for every one green job created.

    And then, of course, those “green jobs” only last as long as the massive subsidies that allow an incredibly inefficient and expensive energy alternative to continue to exist.

    And even in those areas in which jobs ostensibly go to American workers – construction projects and infrastructure projects – largely don’t go to creating jobs.

    Why? Well, one of the bigger problems is that construction today is very different from the days of building the pyramids. It used to be an incredibly labor-intensive endeavor. Now you do a multi-billion dollar project, and only a few jobs are created because most of the money goes into materials and goes into construction equipment. As one example, there is an overpass going up funded by Obama “stimulus” dollars. Over two hundred million dollars (the amount of money is posted on the many asinine signs); but I’ve NEVER seen more than six guys working.

    And then there’s the thing you brought up. That even where American jobs are created, those workers STILL largely buy foreign products. Because liberals have made it too expensive to build in the US, and you can buy almost anything cheaper if it comes from somewhere else.

    Quantititve Easing IS printing money, or at least artificially creating it electronically (which is the same thing). It inflates currency, makes the dollars you previously had less valuable, and ultimately it ALWAYS leads to high inflation and NEVER ends well. But we’re doing it anyway – because we elected Democrats who are incapable of learning the lessons from history.

    Your last paragraph ends with something intriguing. You say, “You should learn from us.” I would submit that if we just followed the advice of our greatest founding fathers, we wouldn’t NEED to learn from you. Because they nailed good and wise government. But we don’t seem capable of that, of course, and so we NEED TO LOOK TO COUNTRIES THAT ARE FOLLOWING COMMON SENSE PRINCIPLES TODAY.

  11. Penumbra Says:

    I am glad to know that you have some Swedish heritage.

    But of course, you have all the knowledge and experience to deal with your own problems. I believe in classical values as defined by wise people such as the founders of the USA. As a Christian rightwing conservative, I also believe in hard work, discipline, moral values, family values, modesty, etc. In other words, all that is despised by the liberals who believe that the solution of a crisis due to over consumption on borrowed money is to borrow even more.

    The liberal idea of making people’s lives easier by giving them benefits on borrowed money or the money of other, hard working people, is only demoralizing. There is no future for such a society.

    But I also feel that the real crises in the Western world is not the financial one, although it is bad enough, but the moral one. I am still waiting that intellectuals and politicians will bring up that issue to a serious debate. I feel like I am waiting in vain.

  12. Michael Eden Says:


    I’d say we have the HERITAGE to deal with our own problems. The knowledge and experience has largely been pissed away by the current crop of politicians (mostly the Democrat ones).

    I agree with you. I use the term “moral idiot” all the time. There are people who got first-class educations in our top universities, who have PhDs in their fields, who are completely ignorant as to how the world ought to be. These people have denied the Word of God, and the Judeo-Christian worldview which made Western Civilization (let’s more properly call it “Christendom”) the greatest and most powerful and most wealthy and most successful in human history, and are instead applying a prism of Marxist-fascist postmodernist theory over reality.

    There is nothing more dangerous to a society – and to civilization itself – than an intelligent, sophisticated moral idiot who wields the levers of political or judicial power. Nothing.

    I have a feeling you have read Francis Schaeffer, whom I have read also. I also wouldn’t be too surprised to discover that you have read Os Guinness’ The Dust of Death. Both great Christian minds saw what was coming.

    I would also suggest another new book – Thomas Sowell’s Intellectuals And Society.

    There is a wealth of tradition behind your wise words here. I share your views completely.

    One of the interesting things about Jesus turning over the tables of the money changers in the temple was that he was attacking a state-controlled operation which had imposed itself under the guise that it was making things easier for the people – but had instead contaminated God’s sphere.

    Jesus would be doing a lot of “overturning” today, I fear.


  13. Penumbra Says:

    Well spoken!

    No, I have not read these books. What I am saying here is basically my own thoughts, based on near 60 years of experience of life. But I am glad that you agree and that there is sum serious literature on the same wavelength.

    You have a great blog and I will continue to follow it with interest. I will be off line for a while but back next year (which is not far from now).

    Merry Christmas to you, dear sir!

  14. Penumbra Says:

    I meant “some serious literature”. Sorry.

  15. Michael Eden Says:


    The greatest ideas are never “original.” They are great because they are timeless, and because they have been proven in the past.

    Liberalism/progressivism makes the assumption that anything “new” is “progress,” and that their “fundamental transformation” must therefore be good a priori. They are ever striving for the Brave New World, never understanding that said world will be a failed one.

    We conservatives, on the other hand, want to “abhor what is evil; cling to what is good” (ROM 12:9 ). While the left wants to do the precise opposite.

    I think you’ll like the books I named; they are so rich. I KNOW you’d love the Dust of Death.

    Merry Christmas to you as well, most excellent sir!

  16. Anonymous Says:

    What is not being reflected here is that nations are out-sourcing and off-shoring jobs. The countries that are in trouble are doing their fair share of off-shoring as well. This means that the taxation of those incomes does not occur. With production from all such countries, including the U.S. the import to export ratio is bound to be skewed when all production occurs in another country and is artificially imported.

    The U.S. is bound to look the worst here with every UN-AMERICAN company looking to take advantage of the most vibrant market place where the prices that can be obtained are higher than any other country in the world. The prices are high here because the salaries used to be higher. Now that they are collapsing it is necessary that the prices collapse too. Such deflation is not in the books and the Fed is actually artificially keeping it from happening through quantitative easing.

    The bottom line is that a decrease in income and income taxes will generate deficits and the 1950 method of dealing with this historical paradigm will not work. Lastly since curbing the incentives to off-shore jobs is also not in the books the decrease in incomes, increase in prices and the artificial manipulation of deflation is not sustainable.

  17. Michael Eden Says:


    It’s not being reflected because it is utterly irrelevant to the issue being discussed.

    We are comparing countries whose leaders did big massive government stimulus programs versus countries that refused to do them. And when you look at the countries that did massive government stimulus programs, you invariably get higher rates of unemployment; and when you look at the countries that refused to give the government all the money to fund one boondoggle after another, you get lower unemployment.

    What you are throwing in is commonly called “a red herring.”

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