Wednesday, July 22, 2009
A preface like Swiss cheese
I am sure everyone will focus on the health care portion of the President's press conference tonight. But he said some things about the macroeconomy and the stimulus that deserve some attention as well. Let's look at the opening remarks:
But the data on employment only hits near 700,000 jobs lost in December. That average is an average of December and January, a period part of which he was president and for all of which his policies were the dominant news story of the period. Obama's five month cumulative loss (2.64 million jobs) is about two bad months away from Bush's 3.7 million jobs lost in his last twelve months. It's a very elastic definition of "bending the curve" (to use a current term of art) that the Obama administration is using here.
The tax cuts put about $65 billion in to the economy; last time we estimated the effect of this (from the 2008 cuts, which were larger) we had an effect on GDP of less than $20 billion. The UI payments aren't keeping the number of discouraged workers from increasing; see this for more.
Six months ago, I took office amid the worst recession in half a century. We were losing an average of 700,000 jobs per month and our financial system was on the verge of collapse.It really wasn't the worst in a half-century until after Obama took office, but you could argue charitably that it would have gotten there no matter what. Fine.
But the data on employment only hits near 700,000 jobs lost in December. That average is an average of December and January, a period part of which he was president and for all of which his policies were the dominant news story of the period. Obama's five month cumulative loss (2.64 million jobs) is about two bad months away from Bush's 3.7 million jobs lost in his last twelve months. It's a very elastic definition of "bending the curve" (to use a current term of art) that the Obama administration is using here.
As a result of the action we took in those first weeks, we have been able to pull our economy back from the brink. We took steps to stabilize our financial institutions and our housing market. And we passed a Recovery Act that has already saved jobs and created new ones; delivered billions in tax relief to families and small businesses; and extended unemployment insurance and health insurance to those who have been laid off.This is of course well-trodden ground. The "created or saved" line has not gone away. This was the first point where I thought "he's not trying to convince me of anything. This is a rally-the-troops presser." He knows the line has no value to independents or conservatives.
The tax cuts put about $65 billion in to the economy; last time we estimated the effect of this (from the 2008 cuts, which were larger) we had an effect on GDP of less than $20 billion. The UI payments aren't keeping the number of discouraged workers from increasing; see this for more.
Of course, we still have a long way to go. And the Recovery Act will continue to save and create more jobs over the next two years � just like it was designed to do. I realize this is little comfort to those Americans who are currently out of work, and I�ll be honest with you � new hiring is always one of the last things to bounce back after a recession.President-elect Obama, January 8, 2009:
That is why I have moved quickly to work with my economic team and leaders of both parties on an American Recovery and Reinvestment Plan that will immediately jumpstart job creation and long-term growth.The JOLTS report for May 2009: "The hires rate at 3.0 percent in May was at the lowest point since the series began in December 2000." Labor turnover is slower, as workers are afraid to change jobs and employers are not hiring.
Back to the press conference.
And the fact is, even before this crisis hit, we had an economy that was creating a good deal of wealth for folks at the very top, but not a lot of good-paying jobs for the rest of America. It�s an economy that simply wasn�t ready to compete in the 21st century � one where we�ve been slow to invest in the clean energy technologies that have created new jobs and industries in other countries; where we�ve watched our graduation rates lag behind too much of the world; and where we spend much more on health care than any other nation but aren�t any healthier for it.The Gini coefficient, which measures income inequality, has risen steadily in the last forty years and was barely different in 2007 than in 2000. The last sentence is simply grafted from a campaign speech. Heritage points out that creating green jobs while destroying non-green ones doesn't mean a net gain in employment.
For supposedly the smartest president evah, he seems to stubbornly stick to facts that are wrong or incomplete. As I was a-Twittering to Ed tonight, though, impressing me wasn't the job. He's playing defense to keep nervous Democrats in place on the health care bill. On that, I'll let smarter political analysts have the floor.
