It's the Job Creation, Stupid

Guess what.  This "great recession" we're in (or just coming out of) had fewer jobs lost in the first six months than the 2001 recession.

Let me say that again: in the first six months of each recession, the 2001 recession (which was comparatively mild) had more job losses than the current "great recession."

So why is unemployment so much higher in this recession?  According to the Heritage Foundation, the difference is there's been a lot less job creation.  As Investor's Business Daily reports in an unsigned editorial:

Through the first two quarters of 2009, the economy created just 40 million jobs vs. the 47 million it created two quarters into the 2001 recession. Now, eight months into a recovery, the economy still isn't adding positions. In fact, it has lost an additional 1.1 million jobs — including 36,000 last month — despite a rebound in gross domestic product growth.

So why no job creation?  Simple: taxes.  In 2001 the Republicans cut taxes to stimulate growth.  Now there's been no tax cuts and threatened tax hikes.

Studies show cuts in individual tax rates encourage new business startups, the catalyst for job creation. And there's nothing now to incentivize existing small businesses to create jobs.

According to the Census Bureau, average yearly employment from startups accounted for 3% of total employment from 1980-2005. Without the new business formed during that period, employment growth would have been negative. This recovery has favored big companies, while small businesses are still not expanding — and most Americans work for small businesses.

So, the stimulus did stimulate, and without tax cuts to stimulate job creation, unemployment is around 10%.  And things are only going to get worse:

The president is preparing vast new taxes, including raising the top individual rate to 45% from the current 35% with a 5.4% surcharge, plus the expiration of the Bush tax cuts. These tax hikes will hit small businesses especially hard.

So look for longer term unemployment to stay high.  Because without incentives to grow, businesses won't.  And if business doesn't grow, it won't hire.