A secret jobs boom

Larry Kudlow:

Parsing through a dozen or so newspapers and websites this morning, I was stunned not to find a single reference to the very strong economic state of the union. Sure, there's plenty about global warming, carbon caps, President Bush's poor polling numbers, Republican opposition to the troop surge in Iraq, and the usual horse-race speculation about Hillary Clinton and the Democratic primary race for presidency. But there's nothing -- and I mean nothing -- about the excellent economic state of the union.

I did manage to find one article, buried deep in The Wall Street Journal, titled "Class of '07 Gets Plenty of Job Offers." It talked about employers planning to hire 17 percent more graduates this year than they did last year. This happens to top the college-hiring peak of the last economic boom in 2000.

There's also an interesting op-ed by Deputy Treasury Secretary Bob Kimmet (an old friend with lots of supply-side blood in his veins), who notes the positives of "job churn." More than 55 million Americans, or four out of every 10 workers, left their jobs in 2005. Since there were more than 57 million new hires that same year, this is good news. It also means that new hires exceeded employee separations by an average of 364,000 per month. Per month!

Eat your heart out, Lou Dobbs.

The fact is, jobs continue to boom. So do real incomes, productivity and profits. Economist Michael Darda points out that real wages over the first five years of the Bush expansion are actually growing more rapidly than over the first five years of the Papa Bush/Bill Clinton boom.

Meanwhile, unemployment today is only 4.5 percent. Federal, state and local tax collections are soaring through the roof. Budget deficits are plunging. Inflation-adjusted GDP is averaging just more than 3 percent. Family wealth stands at a record of slightly more than $54 trillion. Total employment is at a record 146 million.

Stock markets, as you might have noticed, also continue to rise. They have done so, almost without interruption, for four years, on the shoulders of a remarkable surge in business profits -- which itself is a function of the high-tech, knowledge-based product explosion.

These corporate profits, along with our record-setting stock markets, have enriched the more than 100 million investors who are participating in this prosperity. In fact, this America boom is spearheading a global economic surge. While the American free-market model is often derided as "cowboy capitalism," imitation remains the sincerest form of flattery. And it isn't just China, India and Russia who are acquiescing to the worldwide spread of American capitalism. It's also Eastern Europe and parts of South America. Heck, even the socialists in Old Europe -- like France and Germany -- are getting into the act by reducing individual and corporate tax rates to promote growth.

Note to John Edwards and other modern-day class warriors: The best anti-poverty plan is a growing economy, one that creates jobs and higher middle-class living standards. As free enterprise has been unleashed around the world, government planning once again has been rejected. This is the spirit of Adam Smith's "Wealth of Nations," where he argued almost 250 years ago for free markets, free trade and a very light touch with respect to taxes and regulations.

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Well, I guess Larry did not read my short take on the State of the Union. But his point is right on. Another aspect of the strong economy that is also never mentioned is that it is a strategic defeat for Osama bin Laden. One of his primary objectives in the 9-11 attacks was to ruin the US economy so that we would not have the wherewithal to fight back against his plan for domination by Islamic bigots. Much of his early commentary was about the economic slump that followed the attacks. He put it right up there with the surge in the purchase of Korans in the US. Neither event was an indicator of the long term trends.

Much of the media is heavily invested in making a case for how awful things are under President Bush. This may reflect the fact that their industry continues to be a real laggard in the current economy. But, the fact is they are missing a very good story.