Worker productivity fell this spring more quickly than previously estimated while labor costs were rising at a faster clip. Both developments could pose threats to a fragile economic recovery.

The Labor Department reported Thursday that productivity declined at an annual rate of 0.7 percent in the April-June period, a bigger drop than the 0.3 percent decline reported a month ago. Labor costs rose at an annual rate of 3.3 percent, faster than the 2.4 percent increase originally reported.

The changes reflected downward revisions made last week to overall economic growth which showed the economy’s output barely growing in the spring. Declining productivity, if it persists for a prolonged period, would represent a serious economic threat while rising labor costs would cut into corporate profits.

Economists are forecasting that productivity will slow over the next couple of years while labor costs will increase. However, they don’t see these developments as worrisome during the current period of high unemployment and weak income growth.

Read the whole thing here. Who exactly are these economists who can explain away mountains of bad economic data? It is very hard to get higher growth without rising productivity. Without higher growth, unemployment will remain high.

The original $23 billion “Education Jobs Fund,” or “public schools bailout,” in the words of American Federation of Teachers president Randi Weingarten, fizzled, despite earnest lobbying by both the AFT and the larger National Education Association.

That number was trimmed to $10 billion and inserted into the Afghanistan war spending bill in a cynical maneuver cooked up by Big Labor.

While that passed the House, word is emerging that the pork-laden war bill isn’t going anywhere in the Senate.

But Big Labor’s pals aren’t giving up.  They’re a tenacious bunch that will find one way or another to continue spending oodles more on a bloated system that’s underserving America’s children.

Now, according to CQpolitics.com, the $10 billion public schools bailout will likely be attached to another bill that will likely sail through the big-spending Congress.

One bill that is being studied as a vehicle is the leftover package of tax break extensions that are not included in the Senate’s extension of unemployment benefits. The Senate is scheduled to pass the unemployment bill on Tuesday and the House is expected to take it up on Wednesday.

And Big Labor’s go-to man in the House, Appropriations Chairman Dave Obey (D-WI), isn’t done gutting President Obama’s education reform initiative, “Race to the Top.”  From The Hill:

Obey has proposed a 40 percent cut to the White House’s $1.35 billion 2011 request for Race to the Top — a budget allocation for which Obama personally pleaded.

This is the second conflict this month between Obey (D-Wis.) and the White House over money for the program, which awards federal grants to states that adopt performance-based policies for their public schools.

Obey also wants to cut money from a fund that provides incentives for charter school development, performance pay for teachers and tenure modifications. He originally wanted to divert $500 million from that worthy fund, but now wants $1.3 billion.

This reveals two things -  how determined Obey is to deliver the bacon for the teachers unions, but also the perceived weakness of President Obama.  If the president’s own party is dismantling one of his signature programs, just imagine what’s happening behind the scenes.

The NEA welcomed Obey’s onslaught with open arms and typical lovey-dovey socialistic rhetoric.

Obey’s attempt to balance funding for reforms with more traditional programs is winning support from teacher unions, which have also questioned the Race to the Top approach.

“We fundamentally believe that the government’s role through federal funding is to be a partner to all states, so we’re truly investing in all children’s successes and futures, instead of making states have to compete,” said Kim Anderson, the government-relations director for the National Education Association.

Regardless of what bill is used as a vehicle for the public education bailout, it should be defeated until public schools have demonstrated they’re able to cut labor costs to sustainable levels.  This bailout would have the opposite effect by relieving the pressure on schools to deal with their financial excesses, which is precisely the Democrats’ goal.

Speeches and photo-ops, however, won’t change the fact that Obama’s policies are anti-capitalist and therefore anti-job and anti-recovery.

It’s important to note that the secret to capitalism is not all that secret.  It’s right there in the name CAPITALism.   Our system relies on:

• Step 1.  The ability of some to aggregate enough capital, i.e. save money, so that they can . . .
• Step 2.   Invest in productive enterprises, i.e. start or grow businesses which  . . .
• Step 3.   Employ people – people who  . . .
• Step 4.   Have the ability to buy things, i.e. purchasing power (critical in a 70% consumer driven economy) – which in turn  . . .
• Step 5.  Creates profits for sellers and . . .
• Step 6.  Savings – and the cycle renews.

The Left’s political policies, however, are sworn enemies of that simple and effective economic process.

Most notably, amongst those anti-capitalist/anti-job political policies is the heavy income tax burden facing American income earners today and the impending Pelosi/Reid/Obama tax increase to support their Big Government policies.  The Left uses taxes on the income earners in a political attempt to reduce the difference in classes and to raise revenue.  As with most government programs, however, it has an effect that is the reverse of its intentions – not only does it not reduce class differences, it results in the collecting of less revenues than otherwise could be collected- and nothing should be more understood than that when it comes to why Obama’s policies are anti-recovery.

For example, let’s say it takes $500,000 to start a restaurant (which represents a conservative amount in the cities of California).  If we assume two partners can earn enough in income to each have $250,000 to start that business – any policy that takes a significant portion of that money from those 2 prospective business owners and then spreads it, in the form of government programs or government rebates, among tens of thousands of people who don’t come together to start businesses, means:

• a)  that Step 1 (the ability of some to aggregate enough capital) and Step 2 (starting a business) will not occur, and therefore
• b) the remaining steps won’t occur either, i.e. no Step 3 (little to no jobs would be created), no Step 4 (no increased purchasing power for any meaningful period of time because the payments are one time payments instead of paychecks) and no Step 5 (future profits for future Step 1, savings). And without jobs, there is diminished purchasing power and no meaningful recovery.

The excessive regulatory burden we face is another prime example of an anti-capitalist political policy.  As if taking away savings isn’t bad enough, how about raising the cost of starting up the restaurant to $600,000 or more (instead of the $400,000 it could be) in the form of increased health care mandates, workers’ comp costs, ADA regulations, labor regulations and more?  Obviously, to everyone but the Left, higher start-up costs means less business startups and therefore less jobs.

To be sure, there are many other anti-capitalist policies of the Left including Cap & Trade, the proposed Wall Street regulations, skyrocketing deficits and more. All result in fewer businesses, jobs, and purchasing power and ultimately no recovery.

So, in the coming months, as the Obama Administration purportedly turns its attention to jobs, so that he can politically recover – see if he turns his attention away from his political anti-job/anti-recovery policies and toward economics so that we can economically recover – but I wouldn’t suggest undertaking a hunger strike waiting for that restaurant.

So now UPS is trying to get FEDEX reclassified under federal law as a way of screwing a competitor. That’s horrendous, but it also makes a sick kind of business sense. And it also reveals the real villain: A government that is big enough to absolutely, positively guarantee it can screw any business. Overnight.

“UPS Vs. FEDEX” was produced by Meredith Bragg and Nick Gillespie (who also hosts). Approximately two minutes long.

This video is based on “Using Unions as Weapons,” by Veronique de Rugy, which appeared in the October 2009 print edition of Reason. Read that article at http://reason.com/archives/2009/09/28/using-unions-as-weapons

For downloadable version of this and all other Reason.tv videos go to http://reason.tv