The New York Times lets on:

The unemployment rate surged to 9.7 percent in August, signaling that joblessness and financial anxiety were likely to endure in millions of American homes for many months. The Labor Department’s latest employment report, released Friday, added weight to a growing belief that, at least technically, the economy had already escaped the grip of recession. Though 216,000 net jobs vanished in August, the losses continued to moderate from their worst numbers of the year. Yet the report also lent credence to a deepening consensus that, even as the economy resumes expansion, the recovery was likely to be weak, prompting most companies to hold back from aggressive hiring.

[. . .]

Such an outcome would confront the Obama administration with a potentially nettlesome political problem heading into next year’s midterm elections. After unleashing $787 billion in government spending to stimulate economic growth, and after bailing out financial institutions and the auto industry, the unemployment rate exceeds worst-case projections envisioned by the administration early this year.

And while voters may not blame the president or his party (despite their ample role in fomenting the housing crisis) for the recession, they are likely to, and with good reason, hold him responsible for an anemic recovery. Why? Because he has utterly ignored or rejected proposals to promote private-sector job growth and instead set out on a course to burden, tax, regulate, and hound American employers. There is nothing in the array of Obama policy choices to encourage job growth and much to stymie it.

The Times story neatly avoids the reasons for the “jobless recovery.” But others are not. James Sherk of Heritage makes a compelling case that the problem is not persistent layoffs but a drop in job creation. The labor market simply can’t absorb new workers entering the labor force. That slowdown in job creation, he says, is in large part attributable to “enormous increases in federal spending on traditional liberal priorities, such as for government-run health care, [which] raise the prospects of vastly higher taxes or rapidly rising inflation.”

He explains:

The federal deficit is expected to approach $2 trillion this year, and to remain well above $1 trillion for many years to come, doubling the national debt in just five years. This situation is not sustainable, but businesses can only guess how the federal government will restore order to its fiscal house, knowing full well that successful businesses make an attractive tax target.

In the face of such a threatening environment, it is not surprising that companies are likely to make only the most critical investments. In addition, the credit crunch has made credit less available to entrepreneurs who want to start new businesses, thereby adding to the shortfall in business investment and business hiring.

Gross private investment in equipment and software—a good measure of business investment spending—has fallen by a full 20 percent since the recession began. As long as business investment remains low and entrepreneurs hold back from starting new enterprises, job creation will remain low—and unemployment, high.

Couple that with the prospect that employers may be hit with higher energy costs, a cap-and-trade regulatory scheme, and health-care mandates and one can understand that a hiring paralysis may become a fixture in the economy, absent a substantial change in the administration’s approach to economic recovery. If the president and his advisers think we can have a recovery while they attack the private sector and seek a vast expansion of government, they are in for a rude awakening. It turns out we need those private-sector employers. Who knew?