Romer vs. Hindery: The Real Story on the January 2010 Jobs Report

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christina-romer-as-presidents-council-of-economic-advisors.jpgLeo Hindery-thumb-250x337-1364.jpg
So, the administration says that ‘official unemployment’ falls to 9.7% from 10.0% but that the economy still shed 20,000 jobs.
The real story here is that a class of worker that the administration mostly ignores but which Leo Hindery has been pointing a screaming headlight at — unemployed, plus underemployed and discouraged workers — are working a bit more, at least some of them.
Hindery actually has a more interesting story to tell in what is happening with “real unemployment” which has dropped from 19.1% last month to 18.4% for January 2010.
Those people working cut back hours are apparently working more than they were, but as of yet, an overall number of new jobs is not being created.
I am going to post Leo Hindery’s Monthly Jobs Report here and follow it with Council of Economic Advisers Chair Christina Romer’s report distributed by the White House.
First, Leo Hindery’s January 2010 “Real Unemployment” Report:

Friends,
Using its Current Population Survey of non-farm jobs, the Labor Department’s Bureau of Labor Statistics just announced this morning that in January 2010 “U.S. employers decreased [non-farm] payrolls by 20,000 jobs and the unemployment rate fell to 9.7%.”
It noted that there are now 14.8 million unemployed workers, and that since the recession began [in December 2007] employment has decreased by 7.8 million. (I should note that in its report the BLS also revised down sharply its December 2009 job loss figure to 150,000, from an originally reported 85,000 drop.)
As we have been noting, the monthly BLS announcement regarding unemployment:

· uses only a survey of households rather than much more accurate payroll data;
· excludes changes in employment among the nation’s 11.1 million farm and self-employed workers, even though these two categories represent more than 7% of the civilian labor force; and
· most important, does not take into account the 14.4 million workers who are part-time-of-necessity [8.3 mm], marginally attached [2.5 mm], or out of the labor force because they are “discouraged” [3.6 mm].

Our “Summary of U.S. Real Unemployment” makes these three adjustments; it also identifies average weeks unemployed, job openings, and the real jobs ‘shortfall’. With the three adjustments made:
· The number of employed workers in all three categories of employment – non-farm, farm and self-employed – increased by 541,000 in January.
· The real unemployment rate is 18.4%.
· The number of real unemployed workers in all four categories of unemployment – BLS, part-time-of-necessity, marginally attached, and discouraged – totals 29.3 million.
· The number of real unemployed workers has increased by 12.5 million since the start of the recession. (In contrast, we should have been creating a net 2.7 million new jobs in the past 25 months just to keep up with the natural growth of the labor force of around 108,000 workers per month.)
· The economy is short 21.3 million jobs in order to have a real unemployment rate of 5%, which would generally be considered ‘real full employment’.
(Much of the national press now uses our real unemployment numbers, except some still leave out discouraged workers despite the fact that this huge category is arguably the most effectively unemployed of the four unemployment categories – this omission leads to a rate of 16.5% instead of our overall real unemployment rate of 18.4%.)
The current average number of weeks unemployed is at least 30.2 and the number of workers unemployed at least a half year is at least 9.9 million [i.e., BLS’s figure of 6.3 mm plus the 3.6 mm discouraged workers]. (Note: These two numbers are much better measures of real employment health than is the more publicized rolling four-week average of initial unemployment claims, which at around 450,000-500,000 workers is at best a very limited snapshot of the true state of the economy.)
Kindest regards,
Leo Hindery

Now from the White House:
Statement by Chair of the Council of Economic Advisers Christina Romer on the Employment Situation in January

On the Employment Situation in January
While unemployment remains a severe problem, today’s employment report contains encouraging signs of gradual labor market healing. The unemployment rate fell three-tenths of a percentage point and employment rose in a number of industries, though overall employment fell slightly.
The unemployment rate declined from 10.0 percent to 9.7 percent. This decline occurred despite a modest rise in the labor force. The broadest measure of the unemployment rate, which includes all persons marginally attached to the labor force and workers working part time for economic reasons, fell almost a full percentage point. Obviously, the unemployment rate remains unacceptably high, and is even worse for certain demographic groups such as teenagers and black or African American workers.
Overall payroll employment declined 20,000 in December. This total reflects substantial variation across industries. Employment in manufacturing rose for the first time since January 2007, led by an increase in employment in motor vehicles and parts. Employment also rose in retail trade and in temporary help employment. Employment fell, however, in construction and state and local government.
Even as today’s numbers contain signs of the beginning of recovery, they are also a reminder of how far we still have to go to return the economy to robust health and full employment. Indeed, with the benchmark revision announced today, we now know that the total job loss over the recession was more than 1 million larger than previously estimated.
That is why at the same time that he released a plan for reining in the budget deficit over the medium and long run, the President has called on Congress to enact responsible, targeted actions to jump-start job creation. His proposals for a small business jobs and wages tax cut and a new program to encourage small business lending are important steps to help the businesses that are essential to robust job creation. Today’s numbers showing continued decline in construction and state and local government employment emphasize the importance of two other of the President’s priorities–continued infrastructure investment and additional aid for strapped state and local governments.
There will likely be bumps in the road ahead. The monthly employment and unemployment numbers are volatile and subject to substantial revision. Therefore, it is important not to read too much into any one monthly report, positive or negative. It is essential that we continue our efforts to move in the right direction and replace job losses with robust job gains.

Bottom line: American workers are not out of the woods yet by a long shot. And when one looks at a looming $200 billion in shortfall in state budget revenues ahead in 2010, which will have significant destimulative effects, there are another 3 million jobs slated to be cut rather than created.
— Steve Clemons

Comments

24 comments on “Romer vs. Hindery: The Real Story on the January 2010 Jobs Report

  1. Drew says:

    Well, this is pretty boring. A bunch of lefties are upset that
    someone named Nadine posts actual government receipts and
    correllates the activity to tax rates. Why pay attention to
    something as silly as that?
    Anyway, as a CEO (moi) you dudes are dreaming if you think
    anyone is going to hire anyone for any reasons other than
    extraordinary duress. That’s because this administration treats
    employers as piggy banks, and the amount of the piggy bank
    problem is based on the number of employees you might have.
    Gee, amazing. Someone in Iowa can understand the effect of
    the government on his own business — without help from
    bloggers in pajamas.
    To maintain unemployment at 10% monthly job growth will need
    to exceed 200,000. The administration has pre-announced an
    expectation of 95,000 per month growth. Why? Actual
    unemployment is understated, as those who have been out of
    the economy for 6 months are not counted. They come back
    when things get better. The denominator will swell.
    The government is hiring, a little. The private sector would
    rather have a root canal than hire. What happens next?

    Reply

  2. nadine says:

    Wigwag, please read this Fortune article, and let me know what you think
    How Obama got Keynes Wrong
    http://money.cnn.com/2010/02/04/news/economy/meltzer_keynes.fortune/index.htm

    Reply

  3. Adam S says:

    Like I said, Wig Wag has gotten it right, in excrutiating detail, and Nadine is blowing political smoke.
    Facts and honesty win out.

    Reply

  4. nadine says:

    “I get it Nadine; you think it was removing 16 million men from the labor force that spurred the economy; that’s how World War II ended the Great Depression.”
    Well it certainly did wonders for the unemployment number, you must admit.
    “under Democratic Presidents the tax burden is typically shifted to the wealthy; under Republican Presidents it is typically shifted to the less than super-rich.”
    That is FALSE. Bush’s tax cuts were across the board. Under the Bush tax cuts the rich have been paying the highest share of taxes ever:
    “In 2006… the top 20 percent of income earners paid 86.3 percent of all federal income taxes, an all-time high.[1] This is an increase of over 6 percent from 2000, when the top 20 percent paid 81.2 percent. During the same period, the bottom four quintiles all saw their share of the federal income tax burden fall sharply:
    * The bottom 20 percent of income earners’ share of federal income taxes fell from -1.6 percent in 2000 to -2.8 percent in 2006;
    * The next 20 percent’s share declined from 1.1 percent to -0.8 percent;
    * The middle quintile’s share dropped from 5.7 percent to 4.4 percent; and
    * The fourth quintile’s share decreased from 13.5 percent to 12.9 percent.”
    http://www.heritage.org/Research/Taxes/wm2420.cfm
    It is true that the economy prospered after Clinton raised taxes; however, it was already prospering, since it began recovering from recession in 1992. In 1994 it was growing strongly. It is hardly news that an economy that is growing fast can bear a tax hike better than one that is in a deep recession. Obama is about to make a steep tax hike on an economy already in deep recession.

    Reply

  5. WigWag says:

    “That, and 16 million men removed from the labor force. So, are you suggesting we mobilize for total war?” (Nadine)
    I get it Nadine; you think it was removing 16 million men from the labor force that spurred the economy; that’s how World War II ended the Great Depression.
    I doubt you even believe it yourself.
    It doesn’t take an actual war to solve our economic calamity; it just takes treating the current economic problems, especially our unemployment problem, as the moral equivalent of war. We need to spend like we’re in a war and then when things get better we need to do what Clinton did; run budget surpluses.
    You still don’t get it do you? Federal receipts as a percentage of GDP has remained in a remarkably small range in recent times whether Democrats have been in the Oval Office or Republicans. The pertinent point is how the tax burden is distributed; under Democratic Presidents the tax burden is typically shifted to the wealthy; under Republican Presidents it is typically shifted to the less than super-rich.
    Clinton took office on January 20, 1993; several months later (August) Congress passed the Budget Act of 1993 without a single Republican vote; the bill barely passed the Senate after the Democrat from Nebraska, Bob Kerry, reluctantly voted aye.
    Clinton was criticized bitterly for this budget by the same dimwitted Republican ilk who are criticizing Obama today.
    Clinton’s budget lowered taxes on 15 million working Americans and 90 percent of small businesses. Clinton moderately raised marginal rates for 1.2 percent of taxpayers. The Republican mantra since the days of Reagan is that raising marginal rates portends economic disaster; of course, as usual, Republicans were pathetically wrong.
    Guess what, Nadine, here are the statistics from Clinton’s term. Federal “on budget” receipts in 1994 (the year when the Clinton tax policies took hold) were (in millions) 923,695. Four years later, in 1998 (the same period of time you used in your example) “on budget” receipts were 1,306,156. Guess what, Nadine, that’s an increase in excess of 41 percent.
    The difference is that Clinton made the wealthy pay a little more; the Bush tax cuts benefited the rich almost completely. Under Clinton the standard of living for working class and middle class Americans began to increase for the first time in a generation (albeit slowly and somewhat haltingly). Under Bush, the standard of living for all but the rich reverted to a continuous decline.
    Shifting the tax burden to the wealthy by raising marginal rates didn’t result in economic calamity; it led to improved living standards for millions. It’s not the total tax burden that changed appreciably; it’s who paid and who didn’t.
    If you prefer to look at the “outlay” side of the ledger, I doubt even you could claim that George W. Bush was anything other than an unmitigated disaster.
    Like Lyndon Johnson, George W. Bush wanted a war that wasn’t paid for. The only difference is that Johnson gave us one war; Bush gave us two. The combination of spending on the War in Iraq and the Bush tax cuts dramatically increased not only the deficit but also the federal debt.
    Obama has no choice but to spend his way out of our current economic problems despite the fact that the federal debt burden is getting a little high. But it’s not his fault; it’s the fault of the Republican Party.
    The economic policies of that political party are so spectacularly bad that if you didn’t know better, you would have to assume that they were deliberately trying to destroy America.

    Reply

  6. nadine says:

    One more point: the Democratic critics of the Bush tax cuts were so convinced that they would cut Federal revenues that they are STILL claiming that they cut revenues, counter-factually.

    Reply

  7. nadine says:

    “Again, I think you’ve conveniently mistook correlation for causation. I would expect Federal tax revenues to increase regardless of the tax situation.” (MofA)
    That is hardly what the Democratic critics of the Bush tax cuts were saying at the time. They expected lower revenues, not sharply higher ones.
    Here, then, is an opportunity: for we can wait and see what actually happens to Federal tax revenues in the wake of Obama’s planned big tax hike. If Federal revenues continue to go down, or at least fail to rise, try to consider the possibility that if the other side keeps correctly predicting what will happen and your side doesn’t, maybe it’s not a fluke.

    Reply

  8. nadine says:

    “He started with the New Deal, but the economic stimulus provided wasn’t sufficient to cure America’s economic woes.”
    In fact, FDR’s continual meddling restarted the depression everytime it tried to end.
    “Everyone agrees that World War II ended the Great Depression; what was it about World War II that accomplished that? It wasn’t the fireside chats; it wasn’t the posters that said “Uncle Sam Needs You” it was the massive spending for the war. In fact, World War II proves you can spend you way out of a depression.”
    That, and 16 million men removed from the labor force. So, are you suggesting we mobilize for total war? Convert the whole economy to buying war bonds? At least we self-financed that one. And then contracted the economy again after the war. Obama wants to continue trillion dollar deficits indefinitely and get someone else to finance it. Good luck with that.
    We don’t want to replace one collapsed government-funded bubble by blowing up another one; we want a functional economy. Obama won’t achieve it. Nobody in his entire administration knows what conditions need to be to start or run a business, a very necessary piece of information that some of the “idiot Republicans” could supply him with.

    Reply

  9. WigWag says:

    Nadine, your comment at 8:04pm is wrong in virtually every respect. Clinton bequeathed to George W. Bush large, almost massive budget surpluses. It is true that after a stunningly successful record of economic growth, achieved only after he righted the terrible economy left to him by the first George Bush, it is possible that the economy was slipping into an extremely modest downturn when the second George Bush was inaugurated. It is also possible that the years of growth Clinton provided would have continued, albeit at a slightly slower pace. The bottom line is that George W. Bush inherited an economy that was incredibly strong by historical standards and he blew it.
    When Clinton left office, the federal debt as a percent of GDP was 58.2 percent; when George W. Bush left office it was 70.5 percent. When Clinton left office, the federal deficit as a percentage of GDP was incalculable. Why? Because there was no deficit. When George W. Bush left office the federal deficit as a percentage of GDP was as higher than it was at any point during the Clinton Administration except Clinton’s first year in office when he was cleaning up the economic mess left by Bush the First.
    Your suggestion that the Democrats were responsible for the deficits of the last years of the Bush Administration is mere ranting. George W. Bush proposed expenditures in the budgets he presented year after year that were as high or higher than any deficit that the Democratic Congress voted for. And Obama is in the same position Clinton was in, but only worse. Clinton had to clean up the mess left by a clueless Bush; Obama has to clean up the mess left by a moronic Bush. Without the deficits that Obama is running now (and the aggregate demand generated by governmental spending and the Obama tax cuts), the American economy could easily collapse.
    The dumbest statement in your comment is this one:
    “We are hardly talking about mild little deficits due to unemployment benefits. No, we are talking about the notion that government can spend its way out of a depression, a notion that should have been debunked the first time by FDR’s efforts. This is not denying reality; it is disbelieving JM Keynes and believing Milton Friedman, and with considerable evidence.”
    It’s hard to know where to begin responding to a statement this ignorant. Let me try anyway.
    First of all Franklin Roosevelt proved that Keynes was right; you can spend your way out of a depression. He started with the New Deal, but the economic stimulus provided wasn’t sufficient to cure America’s economic woes. Everyone agrees that World War II ended the Great Depression; what was it about World War II that accomplished that? It wasn’t the fireside chats; it wasn’t the posters that said “Uncle Sam Needs You” it was the massive spending for the war. In fact, World War II proves you can spend you way out of a depression.
    FY 2010 will end with a U.S. budget deficit of approximately 10.6 percent of GDP. In 1942 the federal deficit as a percent of GDP was 12.0 percent; in 1943 it was 28.0 percent; in 1944 it was 22.4 percent; in 1945 it was 24.0 percent. Both the New Deal and World War II proved beyond any doubt that Keynes was right; running massive deficits can provide a temporary cure for the economy when it is in the doldrums. The trick is to run deficits only when the economy is bad and surpluses when the economy is good.
    Your remark about Milton Friedman is equally ill-informed. Friedman was a monetarist who emphasized the relative importance of monetary policy over fiscal policy. In case you didn’t notice, Nadine, during the height of last year’s crisis the economy was experiencing a near liquidity trap; both long and short term interest rates were approaching zero (similar to what happened in Japan a decade before). Monetary policy was useless; there were no more interest rate reductions to be had; interest on Fed Funds couldn’t be reduced to below zero. Do you even know what a liquidity trap is, Nadine?
    The situation is only moderately better today; with interest rates near historical lows, the Fed has incredibly little room to act; the monetary policy advocated by Friedman is near useless in this situation. Thank God there is a savior; in this case, his name is John Maynard Keynes. But for Keynes, we would be lost; economic growth would plummet; unemployment would be two or three times what it is now; the United States would be irreparably damaged. This isn’t a prospect that someone who thinks the United States is mostly a source of good in the world should cherish.
    This statement of yours is almost equally absurd as the previous one I mentioned:
    “We are going to hit a wall. These deficits are more than 10% of GDP. Our economy would no longer qualify for EU membership.”
    First of all, the majority of EU nations have deficits as a percentage of GDP that are as large or larger than the percentage that the United States is facing. Secondly those EU nations that have smaller deficits (as a percent of GDP) are free-loaders; relying on the United States to stimulate the economy of the entire world (including their nation’s economies); they should be ashamed.
    It is true that the deficits that Obama has been forced to run to fix the George W. Bush mess have been large by historical standards; but they are far from exceptional. By the way, the debt that the Obama Administration has been forced to pile up still leaves the United States with a debt to GDP ratio that is anything but alarming.
    FY 2010 should end with federal debt as a percentage of GDP at about 94 percent. In 1945 federal debt was 116 percent of GDP; in 1946 it was 121.2 percent of GDP; in 1947 it was 105.8 percent of GDP.
    Despite this debt level, the 1950s was an extraordinarily prosperous decade; the debt didn’t hold the United States economy back even a little; the U.S. thrived. Of course, unlike most of the rest of the world, the United States exited World War II with an advantage; our economy and our infrastructure were still intact. Nevertheless, these levels of federal debt were largely inconsequential.
    The bottom line, Nadine, is that you can spend your way out of a recession or depression and the resultant debt levels aren’t catastrophic. That is, to anyone who doesn’t believe that the earth is flat.
    And of course, the real tragedy (and it is a tragedy) is what the Republican Party has wrought. Had Gore been elected, the economic policies of Bill Clinton would have continued. Larry Summers probably would have been Al Gore’s Secretary of the Treasury. Under his stewardship marginal tax rates never would have been cut; Gore almost certainly wouldn’t have gotten us trapped in Iraq. With year after year of budgetary surplus, the federal debt would have disappeared or at least dramatically diminished.
    Even if everything else had remained the same; even if we had still experienced the recent economic calamity; the Obama deficits would be producing debt to GDP ratios in the single digits or the low double digits; nothing like the 90 percent we are experiencing now.
    In short, Obama would have been free to run even bigger deficits; escaping the current recession and the current high unemployment rates would have been easy or at least far easier.
    The theories of John Maynard Keynes are as unassailable as the theories of Albert Einstein. As for Milton Friedman, his contributions provide policy makers with no options to get us out of the current crisis.
    The Republican Party is far and away the political party most responsible for almost destroying the American economy. The Democrats were complicit, but the Republicans pulled the trigger.
    It’s little wonder that a political party made up in large part by people who think the earth was created 6 thousand years ago and that the “elect” will be floating up to heaven in the near future is the party that thinks Keynes was wrong.
    The Republican Party is a party that consists mostly of idiots and is led mostly by idiots.
    Following the economic advice proffered by the average Republican office-holder today is surely the quickest path to American economic doom.

    Reply

  10. Maw of America says:

    Again, I think you’ve conveniently mistook correlation for causation. I would expect Federal tax revenues to increase regardless of the tax situation. There are myriad reasons for this to occur. Crediting it to tax cuts is as wrong as blaming the deficit on them. War, entitlements, natural disasters, poor planning, Milli Vanilli… you could make a case for any of these causing it.
    Sorry, not convinced. In fact, far from it.

    Reply

  11. nadine says:

    MofA, those are the Treasury figures of actual Federal tax revenues. Bush’s main tax cuts were enacted in 2003.
    http://www.whitehouse.gov/omb/budget/fy2009/pdf/hist.pdf
    Total Receipts – On-budget (in millions of dollars)
    2003…………………1,258,690
    2004…………………1,345,534
    2005…………………1,576,383
    2006…………………1,798,872
    2007…………………1,933,150
    As you can calculate for yourself, 2007 is over 40% more than 2004.
    You cannot truthfully say that Bush’s tax cuts lowered Federal tax revenues and therefore caused the deficits. The most that left-leaning economists say is that revenues would have been even higher without the tax cuts; right-leaning economists disagree, and it is in any case hypothetical. The actual revenue figures are not.
    “Saying that the tax cuts resulted in higher tax revenues is like saying that Cheney shooting a lawyer in the face resulted in lower hunting accidents. I don’t see how one can be tied to the other.”
    That’s because you don’t see how high tax rates ties down money and makes it unproductive. Bush lowered capital gains taxes and capital gains revenues soared as investors sold stocks, paid taxes, and the money was freed up for new investment. Had the taxes remained high, the money would have sat where it was.
    Capital Gains Tax Revenue (since rate was cut to 15% in 2003)
    Source: (From the CBO, Budget and economic outlook)
    2003………………..$50 billion
    2004………………..$61 billion
    2005………………..$84 billion
    2006………………..$103 billion
    2007………………. $122 billion

    Reply

  12. PissedOffAmerican says:

    “There are a couple of things about nadine’s last post that bother me……..”
    You ain’t seen nuthin’ yet. Wait till she starts tearing the toes off Palestinian newborns and serving them as hors d’ouvres.

    Reply

  13. Maw of America says:

    There are a couple of things about nadine’s last post that bother me:
    “those “disastrous” Bush tax cuts RAISED Federal tax revenues by 40%.”
    Like my old Trig teacher used to say, show me your worksheet. Saying that the tax cuts resulted in higher tax revenues is like saying that Cheney shooting a lawyer in the face resulted in lower hunting accidents. I don’t see how one can be tied to the other.
    – and –
    “it was the spending, which I agree was too high, but who controlled Congress for Bush’s last two years?”
    Did Bush’s veto pen go dry during that time? The Dems certainly didn’t have the capacity to override a veto.
    Don’t pee on my leg and tell me it’s raining…

    Reply

  14. Adam S says:

    Wig Wag’s got it right. Nadine is simply hyperventilating, extrapolating short term conditions as if they had dispositive effect long term.
    Economic sophistication demands honesty.

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  15. nadine says:

    Wigwag, those “disastrous” Bush tax cuts RAISED Federal tax revenues by 40%. Look it up. It was NOT the tax cuts that created the deficits; it was the spending, which I agree was too high, but who controlled Congress for Bush’s last two years?
    “Bush did things exactly wrong; he reduced taxes in times of relative prosperity.”
    No, Bush cut taxes during a recession (remember the dot com bust?) and created times of prosperity. Obama is raising taxes sharply during a recession (he is letting the Bush tax cuts expire, just for starters) and he will greatly prolong the recession. Obama’s tax hikes will LOWER Federal tax revenue; wait and see. The MSM will be reporting how “unexpected” the drop in revenue is. They will never admit that the Laffer curve exists.
    “Even the most dimwitted know that you should run deficits in times of economic distress and run surpluses in times of prosperity. Denying this reality is like denying the existence of gravity or the theory of relativity; ”
    We are hardly talking about mild little deficits due to unemployment benefits. No, we are talking about the notion that government can spend its way out of a depression, a notion that should have been debunked the first time by FDR’s efforts. This is not denying reality; it is disbelieving JM Keynes and believing Milton Friedman, and with considerable evidence.
    “Thank goodness Obama is running the deficits that he’s running. If he really had any guts he would be running bigger deficits.”
    We are going to hit a wall. These deficits are more than 10% of GDP. Our economy would no longer qualify for EU membership. This is completely unsustainable. The markets know it. The Chinese know it. We are already monetizing most of this debt. We can’t sell enough Treasuries. Do you remember what Stagflation was like under Carter? We will have it back, and more.

    Reply

  16. WigWag says:

    “It is time to man up and accept responsibility.” (Nadine)
    Yes Obama should “man-up” and accept responsibility; after all, he’s doing exactly the right thing. If anything, the deficits should be larger. Without the large deficits Obama is running, economic growth would collapse and unemployment would surge even more. Only the hopelessly dimwitted would argue for smaller deficits right now. The only thing propping up aggregate demand is government spending; cut the deficit and watch the American economy take a nose-dive. If it does, Nadine, all of those things you like (and I sometimes like) like military intervention all over the world becomes unaffordable.
    The fault lies entirely with George W. Bush. When Bill Clinton left office, the United States was running significant budget surpluses; the prospect of entirely eliminating the sovereign debt of the United States appeared possible and despite a brief cyclical downturn that might have been in the offing, the economy was better than it had been since the 1960s.
    The War in Iraq and the disastrous Bush tax cuts changed all of that. Bush did things exactly wrong; he reduced taxes in times of relative prosperity. Even the most dimwitted know that you should run deficits in times of economic distress and run surpluses in times of prosperity. Denying this reality is like denying the existence of gravity or the theory of relativity; it’s like pretending the earth is flat or pretending that Darwin got it all wrong.
    But for Bush, accumulated debt would have been so much dramatically lower that Obama’s countercyclical deficits would have been incredibly easy to afford.
    George Bush was a true disaster for America. His economic policies were so bad that it’s almost hard to contemplate how horrible they truly were.
    The fault belongs entirely to George W. Bush and the Republicans. But Steve Clemons and many of his fans at the Washington Note also have a wrongheaded view of all of this. They are right that Bob Rubin and Larry Summers and their colleagues in the Clinton Administration got it all wrong about regulation; but they forget that this same group that they love to excoriate, got it beautifully right on fiscal policy.
    Thank goodness Obama is running the deficits that he’s running. If he really had any guts he would be running bigger deficits.
    And if he was really as articulate as he’s supposed to be, he would find a way of explaining all of this to the American public.

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  17. nadine says:

    “I’m still waiting on a big “D” Democratic response to the issue of job creation, but I’m afraid I’ll be waiting quite a while longer.” (John Waring)
    Have we not seen it in the Stimulus bill? It ‘saved’ many state government jobs, at least temporarily. There is no sign that it actually created any private sector jobs, despite all the ‘saved or created’ blather. Private sector employers see huge tax increases heading their way and are being super-cautious about hiring.
    Like the late Paul Tsongas said, it doesn’t work to love jobs and hate employers.

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  18. John Waring says:

    When I survey my neck of the woods in the Carolinas, Leo Hindery’s numbers strike me as far more accurate than those of the Administration.
    The phrase, “Lies, damn lies, and statistics,” comes to mind.
    I’m still waiting on a big “D” Democratic response to the issue of job creation, but I’m afraid I’ll be waiting quite a while longer.
    I guess the ox in the ditch has to die and raise a stench before the administration gets a sense of urgency.
    Jobs should be the administration’s first priority.

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  19. nadine says:

    DonS, the “Bush record deficit” that candidate Obama was pounding in 2008 was 165 billion; his proposed FY 2011 deficit is 1.65 trillion; this is TEN TIMES MORE. Making the excuse that it’s all Bush’s fault is not going to cut the mustard. These are Obama’s deficits. I could also point out that Bush’s last two budgets were voted for by a Democratic congress; including then Senator Obama. The Democrats have controlled the purse strings for three full years now. They have controlled everything for the last year. It is time to man up and accept responsibility.

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  20. LInda says:

    Also reported by the administration today was an adjustment upward by over 1 million more lost jobs in the total of jobs lost since the recession officially began in 2007. I haven’t looked closely, but I am not aware of how/why the counts were off by that much.

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  21. DonS says:

    . . . because they COULDN’T stand even it’s imperfect scrutiny.

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  22. DonS says:

    Nadine your sheer gall at trying to compare 5% unemployment/jobless recovery at a time the republicans were year after year robbing the treasury, marginalizing all sorts of regulatory activity, and amassing record deficits — setting up the near collapse of the economy — with the current situation is breathtaking. It comes close to having no shame; but you do repeat the repub talking points faithfully.
    So the BLS pushes th43e numbers. What else is new. Eventually they catch up. In the early ’00’s the repubs tried to eliminate the BLS because they could stand even it’s imperfect scrutiny.

    Reply

  23. nadine says:

    Wigwag, I think you are being somewhat naive about the ways BLS numbers can be pressured. The BLS just announced that payrolls fell, but unemployment declined anyway. So how did the universe of jobs shrink? That’s the only way you reconcile those two statements. This is hardly straightforward statistics.
    BTW the unemployment numbers will continue to fall until June as the Census hires temp workers. You’ll hear it in the headlines. The media wants to talk up the current bad economy, just as they wanted to talk down the good economy under George Bush. Remember how the Democrats pounded the “jobless recovery” when the unemployment rate was under 5%?

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  24. WigWag says:

    So, the administration says that ‘official unemployment’ falls to 9.7% from 10.0% but that the economy still shed 20,000 jobs. (Steve Clemons)
    Respectfully, I think the opening sentence in this otherwise insightful post is a little unfair.
    Yes, Hindrey’s take on all of this is the right one, but the tenor of your opening sentence makes it sound like you think Ms Romer is deliberately obfuscating or being deliberatively deceptive.
    It’s not that the Administration “says” the official unemployment rate fell; the official unemployment rate did fall. The rate is not calculated by political appointees, it’s calculated by career officials at the Bureau for Labor Statistics. The methodology that they use is highly consistent from month to month, year to year and Administration to Administration. The methodology is tweaked from time to time but I doubt that you can cite any evidence that it is “tweaked” for political reasons.
    Don’t get me wrong; I agree with the sentiment expressed in this post; I just think that the subtle implication that Romer or the Administration is doing anything nefarious is not really fair.

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