The White House recently kicked its national sales pitch into high gear after news that the official unemployment rate had fallen.  Yet, at the same time, hiring, business development, and economic expansion continue to stammer.

So, why do lawmakers introduce policies that exacerbate the problem?

As the President tries to pitch the recent downshift in unemployment as the result of his economic reforms, most Americans fail to feel an upswing.  For those of you who wonder how our economy can be improving, while so many of your friends and family are still out of work, looking for better opportunities, or trying to grow a businesses, understand this:  the Department of Labor’s most popular unemployment measure is politically skewed.

When dealing with labor figures, it is important to remember that the Department of Labor is within the executive branch under the leadership of an elected politician.  The figure most-widely presented to and through the media is conveniently the most attractive to the public, but is also the least inclusive.  

The 8.6% unemployment (as of December) fails to include those who would like a full-time job, but have given up looking (such as those who have chosen to go back to school, become a homemaker, or settled for part-time employment) and those who are self-employed or run other small businesses that are struggling, among others.  More comprehensive figures put the nation’s rate between 11% and 20%.  

Do those numbers have a more realistic feel?

To be fair, all Presidents have grown accustomed to using this convenient little “accounting” trick.  

If any of this comes as a surprise, you are going to be really heartbroken when you learn that new legislation continues to be peddled that is known to have negative economic ramifications, all to have first crack at your vote.

For example, increasing taxes on the wealthy has never, nor will it ever help the economy, but these policies continue to be politically expedient.  Politicians know that you are probably not rich, and, although they want their friends’ financial help, they want your vote.  

The reason increasing taxes on top earners will not help the economy is simpler than many of us assume.  Consider that, even in this backwards economy, you have probably never been hired by someone poorer than you.  The wealthy Americans we are so eager to tax are the ones that are hiring you and me.  Cut their funding and they might not be so inclined to do so.

The amount of money these wealthy employers invest in our economy is also affected by tax manipulation.  Businesses and governments use the disposable income that top earners keep in banks, stocks, and bonds as direct investments in their own success.  Increase taxes on the wealthy and you reduce private investment in our economy.  Is that a good idea right now?

With the new Administration came a turn from the long-held tradition that private businesses should compete to provide goods and services to the government.  Instead, the White House has taken on a policy of insourcing, which has allowed for the cancellation of private contracts as well as the competitive forces that drive costs down.  Small businesses, and thousands of jobs with them, have been lost.  What’s the political benefit?  Government employees and their unions are a fairly monolithic and loyal voting group. 

Small businesses hire more than 50% of the private workforce, are responsible for more than 60% of new hiring over the last decade, and comprise more than 99% of all businesses in the country.  Yet, there are 845 new regulations in the federal pipeline, whose unpredictable impacts are limiting investments in these businesses.  Political points with voters again outweigh economic development.

When considering who will do the most to help turn around our economy, don’t forget, some politicians are stalling the economy, and they are doing it on purpose.  Will you vote for them in 2012?

Justin Vélez-Hagan is the National Executive Director of The National Puerto Rican Chamber of Commerce, and an international developer of senior living facilities.  Justin is also a contributing writer for Politic365 and a member of the U.S. Air Force Reserve.  He can be reached at or @JVelezHagan.

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Justin Vélez-Hagan is the founder of The National Puerto Rican Chamber of Commerce and an economic policy researcher at the University of Maryland. He is also the author of The Common Sense behind Basic Economics. He can be reached at or @JVelezHagan.

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