'Special Report' Panel on the Increasing Number of Americans Who Are Out of Work Despite Improving Unemployment Numbers

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This is a rush transcript of "Special Report With Bret Baier" from February 5, 2010. This copy may not be in its final form and may be updated.


PRESIDENT BARACK OBAMA: Even as we take additional steps to hasten that recovery, we know that there are limits to what government can do to create jobs. The true engine of job creation will always be businesses. What government can do is fuel that engine.


ANGLE: There is President Obama today talking about the jobs numbers. That is a fairly new view for the president, talking about the limitations on government.

Let's bring in our panel, Steve Hayes, senior writer for the Weekly Standard, Juan Williams, news analyst for National Public Radio, and syndicated columnist Charles Krauthammer.

Now, gentlemen, the news that we had lost more jobs but the unemployment rate went down was a little puzzling to a lot of people. But the story behind it is actually fairly interesting, Charles.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Marx used to speak about the army of unemployed as a creation of capitalists to keep wages low. What we have is a peculiar army of the discouraged unemployed who have an effect on the numbers.

These are people who have given up looking for work, and as a result the number of the unemployed is reduced because they are considered out of the workforce. So there has been an increase in those numbers, a rather large one, and as a result the unemployment rate has dropped.

But on the other hand, when times improve, as they ultimately will, you're get a reduction in the discouraged unemployment, and that is going artificially increase the number of the unemployed and it will make the numbers look worse. So the actual unemployment rate is not that reliable.

In these numbers there were two interesting hard numbers. There was an encouraging drop in the number of the underemployed, and that is people who want to be working full time but who have either part-time or have diminished hours, and that number dropped by about a million, which was encouraging.

On the other hand, the number of those who haven't had their job for over six months is now up to 6.3 million, a slight increase. which is the highest ever recorded.

It implies I think that those in certain sectors of the economy are not going to get jobs and it is not going to return. On the other hand, in the cyclical elements of our economy, hiring is beginning again.

ANGLE: Yes, what do you make of all this, Juan? There is a little bit of good news in the sense that fewer jobs were lost but we are not back on the track.

JUAN WILLIAMS, NEWS ANALYST, NATIONAL PUBLIC RADIO: We are nowhere close to back on the track.

In the package that we saw there, Elaine Chow, who was the labor secretary under President Bush, made what I thought was a compelling sad point that typically people are unemployed for eight weeks, and in the current recession that we are going through there are people unemployed close to eight months.

That is a tremendously depressing statistic. It's unbelievable what is happening, and especially for people who are in the industrial sector.

To pick up on something Charles said, we did see some increase in terms of industrial employment, not a lot, but we saw a little bit, and that's a good sign. And then we saw a jump in terms of temporary workers.

And that is being advertised by the White House as something that indicates that employers are really holding back on hiring now but they need workers and that soon we will see a burst of people coming in.

ANGLE: They're starting to put their toes in the water a little bit.


ANGLE: Steve, if you want to comment on the numbers, you can, but I also want to get to another thing, and that is what President Obama said today, which seemed to suggest that he saw some limits in government spending and stimulus and conceded the point I'm surprised it took him so long to get to, which is that the main engine for job creation is small business, which creates about two-thirds of all jobs.

Their new package will push benefits for small business, but until now they have been relying on government stimulus.

STEVE HAYES, SENIOR WRITER, THE WEEKLY STANDARD: They have been. And look, the president, one day he will do a small business event — this is not the first one he has done. He has done a series over the past six, eight weeks, where he goes to a small business and gives a speech and there is some sort of micro-cut or some sort of tax incentive that he rolls out at that kind of event.

But then in his big speeches in the state of the union, everything he talks about is government driven. And he talks about it in ways that I think are striking in that they sound almost statist.

He talked about — in Lorraine, Ohio, he said I ran for this office to rebuild our economy, as if the function of the government is really to rebuild the economy. He talks like that fairly frequently.

The other inconsistency I think in the way he's approaching small businesses is that at the same time he's offering these kind of incentives or capital gains tax cuts, he is also at the same time letting the Bush tax cuts expire and doing other things that are basically taking money from small businesses.

As you mentioned and as other people have reported, two-thirds of small business owners are the ones who are going to be affected by this. I think that's a real problem. And you can't do this push and pull, because it sends messages that don't allow people to make long-term plans.

ANGLE: It makes me wonder, Charles, what would have happened had the president taken the same amount of money spent on the stimulus and put it instead into a tax cut, including what Washington calls a refundable tax cut, which means even if you are not working and don't have income you still get the money. You have to answer how much difference that would have made.

KRAUTHAMMER: It is unanswerable. A lot of us think, as I do, that would have improved the state of employment today because so much of the stimulus ended up in government projects which haven't produced a lot of jobs.

What we have had as the private economy has lost millions of jobs, we have had an increase. We are now at a record high in federal employment. And also a lot of the money went into states who had overspent and over- hired and kept that over-hiring at an extremely high level.

So we are getting a net shift of jobs out of the private economy and into the government economy. That's not a way to improve productivity in the end and to get growth.

WILLIAMS: But it is a way to keep people in work. And I must say, the money was also spent — you talked about state government overspending to help people, especially our seniors who have Medicare. If Medicare had bankrupted the states then this would have been a worse situation.

A lot of this is a precursor to a discussion that's going to take place next week about a second stimulus package and whether you not you really should have it. And of course Republicans are saying we don't need a stimulus package, and Democrats in the White House are saying we better get some, otherwise that midterm election is going to look like Armageddon.

ANGLE: They are not even calling it a stimulus package, are they?

HAYES: There was an interesting shift there. Republicans are talking about a second stimulus because they know that people don't like the first stimulus. Democrats and the White House are talking about a jobs bill because they know that will sound much better.

ANGLE: It sounds a lot better.

We'll be back in three minutes with the Friday lightning round and your choice online topic of the week.


ANGLE: Every week on the FoxNews.com "Special Report" page viewers vote on what topic we should discuss first during the Friday lightning round. We begin with under reported budget tidbits, and that's where we begin tonight's discussion. Charles?

KRAUTHAMMER: The budget in NASA cuts out Constellation, the rocket that was going to return us to the moon.

ANGLE: Juan?

WILLIAMS: I have the same pick. I think the news here that while everyone is lamenting, I thought the whole idea of continued exploration and the fact that we hadn't given up on space was hidden in that budget.

HAYES: My under reported budget tidbit is actually Table S1 and page 146 of the budget in which the White House acknowledges their own budget will not be sustainable and the debt to GDP ratio won't work and we're going to be in real deep, long term trouble.

ANGLE: There is one interesting issue this week, and that is the president indicated he wants to continue the middle class tax cuts, part of the Bush tax cuts.

Just yesterday the House voted for what is called in Congressional terms pay-go, meaning pay as you go. And new tax cut or program, you either have to have revenues to support or offsetting savings somewhere else.

The president is going to continue the middle class tax cut but does not intend to pay for it.

KRAUTHAMMER: I'm shocked.

ANGLE: I don't understand. Why not?

HAYES: It's like the economics of the healthcare plan where they would just take something out and then it would work according to the CBO.

WILLIAMS: I'm surprised to hear Charles call this Obama-nomics. It sounds like Reganomics or Bush-nomics. It sounds to me like paying for the prescription drug plan without acknowledging that there will be a cost.

KRAUTHAMMER: Regan created the biggest economic expansion and longest in U.S. history. I rest my case.


ANGLE: All right, now, let's talk briefly about what people see behind us, which is a massive snowstorm coming to Washington. Washington does not handle these things well. We are not in Boston, folks, so, you know, you get a little dusting here and people completely lose their minds.

The grocery stores have been packed all day, people buying both for the storm and for the Super bowl. I suspect there is some people in the country that say, fine, let a snowstorm fall on Washington.

As they used to say in Texas no man's life or liberty is safe when the Texas legislature is in session. Maybe this is a wish sent to us by tea party people.

KRAUTHAMMER: Let me say, having woken up this morning in south Florida and flown into the teeth of this storm so that I could be here and defend truth, justice, and American way against Juan and his snow tie, that I find the hysteria in Washington rather amusing.


But I think it's rather useful. This is a dry run in Washington for Armageddon, and I think when the real Armageddon happens people in Washington will be relaxes. They'll say hey, dude, stay cool, this is just another snowstorm.

ANGLE: This is sort of a pre-apocalyptic storm, Juan, and perhaps brought on by that issue. There is a frosty the snowman on there. It is very seasonal.

WILLIAMS: The state legislature in Virginia vacated the capital of Richmond today and said that the storm was too much. And people have stolen shovels off of my porch. You can't even get a shovel from a hardware store.

ANGLE: They must have known you were going to wear that tie.

HAYES: Juan is already making excuses for why his walks won't be shoveled. You are that guy in the neighborhood.


The real problem with the snowstorm is it happened on a weekend. If it had happened in the middle of the week we could have really shut down the federal government for a few days, saved some money, and everybody would have been happier.

ANGLE: Now, the biggest news this weekend — there would be other some other big news because Sarah Palin is on "Fox News Sunday," but the biggest news Sunday afternoon of course and into the evening will be the super bowl. We had a little item about how Republicans and Democrats divide up on these things.

Charles, do you have a favorite team?

KRAUTHAMMER: I do. And I root for the greatest quarterback in the history of the game, and that, of course, is Peyton Manning. And secondly, conservatives never support the underdog, as you know. That is our reputation so I'm for the Colts.


ANGLE: Juan?

WILLIAMS: I think the greatest quarterback would be Johnny Unitis, I think. But Peyton Manning sure is terrific. I think he is the real deal. And if you had to bet the house, yes.

But come on, you got to have a heart. New Orleans — beaten up. This is a team that has never been to the Super bowl, never won anything. You got to have a heart. It makes you want to burst into song, come on, guys.

HAYES: Are you going to burst into song?


KRAUTHAMMER: You know conservatives don't. You know that.

WILLIAMS: Is that right, because you are heartless? You say, I remember that part.

KRAUTHAMMER: We are realistic.

WILLIAMS: In that case the Colts are likely to win.

HAYES: My heart tells me the Saints. I would rather see the Saints win. However, my head tells me that the colts are more likely to win. I think they are a better team despite Dwight Freeney's injury. I think they will probably win.

The one thing I'm hope we don't see, though, is a blown call that decides the game. And the problem with that is that the same referee who blew the call at the end of the Green Bay Packer-Arizona Cardinal game — you knew I was going there — he is doing the super bowl.



ANGLE: I think I would have to go with Peyton Manning myself.

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