August Jobs Report Shows Continued Weakening Of Labor Market
Another bad jobs report threatens to undermine whatever good will the President had coming off the Democratic National Convention.
Ahead of today’s report on the August employment situation from the Bureau of Labor Statistics, many analysts had raised their estimates of what we’d see based upon the report issued by ADP which showed more than 200,000 jobs created last month. Where the pre-ADP consensus was for somewhere around 125,000 net jobs created, by the end of the day yesterday, the consensus started to drift closer to a better, though still not very good, 150,000 net jobs created. Of course, as I’ve explained before, the correlation between the ADP report and the official statistics released by the BLS have been more of a coincidence in recent years than anything else, some months the two numbers are close to each other but most months they are not. This is largely because it does not measure the same groups of employers as the BLS and does not seasonally adjust its figures in the same manner that the BLS does. Additionally, ADP depends in large part on self reporting from clients that can often be months behind schedule for one reason or another. It makes one wonder why analysts pay so much attention to the ADP report to begin with because, as it turns out, the official figures from the BLS could not have been more different:
Total nonfarm payroll employment rose by 96,000 in August, and the unemployment rate edged down to 8.1 percent, the U.S. Bureau of Labor Statistics reported today. Employment increased in food services and drinking places, in professional and technical services, and in health care.
The unemployment rate edged down in August to 8.1 percent. Since the beginning of this year, the rate has held in a narrow range of 8.1 to 8.3 percent. The number of unemployed persons, at 12.5 million, was little changed in August. (See table A-1.)
Among the major worker groups, the unemployment rates for adult men (7.6 percent), adult women (7.3 percent), teenagers (24.6 percent), whites (7.2 percent), blacks (14.1 percent), and Hispanics (10.2 percent) showed little or no change in August. The jobless rate for Asians was 5.9 percent (not seasonally adjusted), little changed from a year earlier. (See tables A-1, A-2, and A-3.)
In August, the number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 5.0 million. These individuals accounted for 40.0 percent of the unemployed. (See table A-12.)
Both the civilian labor force (154.6 million) and the labor force participation rate (63.5 percent) declined in August. The employment-population ratio, at 58.3 percent, was little changed. (See table A-1.)
The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was little changed at 8.0 million in August. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job. (See table A-8.)
In August, 2.6 million persons were marginally attached to the labor force, essentially unchanged from a year earlier. (These data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. (See table A-16.)
Among the marginally attached, there were 844,000 discouraged workers in August, a decline of 133,000 from a year earlier. (These data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.7 million persons marginally attached to the labor force in August had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities. (See table A-16.)
The number that many people will focus on, of course, will be the fact that the Unemployment Rate dropped 0.2% from the 8.3% level it was at in July, but that would be a mistake. In an environment where a pathetically low 96,000 jobs are created, there’s only one reason that the unemployment rate drops, and that’s because people have stopped participating in the labor market as the highlighted text above reflects. If the labor force participation rate had stayed at the same level it was in July, the Unemployment Rate would have risen to 8.4%. If the labor force participation rate were at the level it was at when President Obama took office, the Unemployment Rate would be 11.2%. Indeed, the labor force participation rate today is at the lowest point it has been since September 1981, when the nation was in the midst of a major recession. As I’ve mentioned before, there are many reasons for this decline in labor force participation. Partly, of course, its due to the aging of the Baby Boom Generation and the likely decision by many of them to essentially retire early by giving up on looking for employment. By sheer numbers, though, that doesn’t account for 368,000 people dropping out of the labor force in one month and no serious economist would argue that they would. To a large degree, these numbers reflect once again the fact that large segments of the public are simply giving up looking for work right now, sitting on the sidelines, and hoping that things will get better in the future. In a world where we are creating less than a hundred thousand jobs per months, that’s a lot to hope for.
Looking deeper into the numbers, we see that there were some surprisingly bad numbers in important job sectors:
Employment in food services and drinking places increased by 28,000 in August and by 298,000 over the past 12 months.
Employment in professional and technical services rose in August (+27,000). Job gains occurred in computer systems design and related services (+11,000) and management and technical consulting services (+9,000).
Health care employment rose by 17,000 in August. Ambulatory health care services and hospitals added 14,000 and 6,000 jobs, respectively. From June through August, job growth in health care averaged 15,000 per month, compared with an average monthly gain of 28,000 in the prior 12 months.
Utilities employment increased in August (+9,000). The increase reflects the return of utility workers who were off payrolls in July due to a labor-management dispute.
Within financial activities, finance and insurance added 11,000 jobs in August. Employment in wholesale trade continued to trend up. Employment in temporary help services changed little over the month and has shown little movement, on net, since February.
Manufacturing employment edged down in August (-15,000). A decline in motor vehicles and parts (-8,000) partially offset a gain in July. Auto manufacturers laid off fewer workers for factory retooling than usual in July, and fewer workers than usual were recalled in August.
Employment in other major industries, including mining and logging, construction, retail trade, transportation and warehousing, information, and government, showed little change over the month.
That decline in manufacturing is concerning if only because that is the sector of the economy where employment had been increasing in recent months. It’s possible that part of this decline is due to layoffs connected to traditional summer retooling, in which case we’d see that sector bounce back in the coming months, but as the report notes it appears that there was less retooling going on this summer than in the past, at least in the auto industry. The results in areas like construction, transportation, and retail trade were apparently so meager that they weren’t even worth laying out in the report. Ever since this jobs recession began, we’ve been wondering which sector of the economy would be the one that would lead the nation back to recovery. So far, it seems like none of them are, and that’s worrisome.
In addition to bad news for August, today’s report also contained significant downward revisions for June and July:
But job reports for June and July were revised lower. The June count fell from 64,000 to 45,000, while July’s number came in at 141,000 from an originally reported 163,000.
Despite hopes that job creation would be better than expected, the monthly report fell short of economist expectations that 125,000 jobs were added for the month. The government said private payrolls increased by 103,000, about half the 201,000 that ADP reported Thursday.
Taking these numbers into account, the average net jobs created per month since the beginning of the year sits at 139.000 new jobs per month whereas it was at 153,000 last year. Neither of these numbers are all that good, of course, since they are not even at the level necessary to account for population growth. If this is the level we’re going to see for the rest of the year, then you can forget about any hope that the jobs market will recover any time soon. Indeed, it seems fairly clear that, over the past year, the jobs market in the Unite States has weakened significantly and that it would not take much to push us into a month or two of job losses instead of pathetically bad job growth, although one has to wonder if anyone would notice the difference.
Already this morning, CNBC and Reuters are speculating that this bad jobs report will prompt the Federal Reserve Board to engage in another round of Quantitative Easing. While I suppose that’s possible, the Fed has been traditionally reluctant to intervene in the economy on the eve of an election and many people who observe the body closely think it’s unlikely that they will act before November. Even if they did, though, it’s improbable that we’d see much of an impact from it. The first two rounds of QE did little more than contribute to run-ups in the stock market. There were no appreciable increases in GDP growth or jobs growth that went along with those moves in the S&P 500 and the DJIA. At this point, with interest rates effectively at zero or below once you take inflation into account, there seems to be very little that the the Fed can do to positively impact the economy. Indeed, as Ben Bernanke has said more than once in his recent appearances before Congress, the ball in that regard seems to be firmly in the hands of the political branches, who need to do something about the impending fiscal cliff before it sends us into another recession.
Politically, this is obviously not good news for the President and potentially brings an end to the post-convention high after his speech last night:
Reince Priebus, the chairman of the Republican National Committee, said the report was “a clear reminder that he has yet to keep his number one promise to fix the economy.”
“The indisputable message of today’s job report: We’re not creating jobs fast enough, and we’re certainly not better off than we were four years ago. Time is up Mr. President,” he continued in his statement, sent just minutes after the Labor Department numbers were released.
“The millions of Americans who voted for Barack Obama in 2008 are realizing it’s time to break up with this president,” he continued. “He promised hope and change but delivered division and despair. With Mitt Romney we can do better.”
(…)
“These numbers really reinforce my sense of where the race stands after both conventions,” CNN Senior Political Analyst Ron Brownstein said after Friday’s numbers were released. “To me, it felt like neither Mitt Romney nor Barack Obama really demonstrated a second gear that would really expand their coalition beyond what they came in with. And thus the race seems poised for just trench warfare with each side fighting to move very small margins among their various constituencies.”
“This is not catastrophic enough to drop the bottom out from President Obama, but no tailwind behind him at all. And just setting us up for grinding trench warfare,” he continued.
David Frum, another CNN contributor and a former speechwriter for President George W. Bush, said the numbers meant more people were giving up hope – and that was bad for Obama.
“For the president’s point of view and the president’s party, when people give up on looking for work, they also give up on trying to vote,” Frum said. “They become detached from society. And those are the people he needs to motivate. They have to at least have hope. And here they are demonstrating when they quick looking for work they are giving up on hope.”
Not surprisingly, the Romney campaign was out quite quickly with a statement on this report:
“If last night was the party, this morning is the hangover. For every net new job created, nearly four Americans gave up looking for work entirely. This is more of the same for middle class families who are suffering through the worst economic recovery since the Great Depression. After 43 straight months of unemployment above 8%, it is clear that President Obama just hasn’t lived up to his promises and his policies haven’t worked. We aren’t better off than they were four years ago. My plan for a stronger middle class will create 12 million new jobs by the end of my first term. America deserves new leadership that will get our economy moving again.”
The Obama camp’s response isn’t out yet because the law prohibits the White House from commenting on the jobs report until the markets have opened, but there’s really not very much good one can say about this, a fact that Ezra Klein, Jared Bernstein, Ed Kilgore, and Matthew Yglesias all recognize. Yglesias says that the President may benefit politically from the fact that the Unemployment Rate went down, but I don’t think that’s likely given that every report this morning, even on MSNBC, is emphasizing that the rate only went down because of the collapse in labor force participation.
There’s no good way to spin this report, the question is whether it will have an impact on the race going forward. As always that depends on how the campaigns react to it, and how the voters react to that. The next jobs report comes in the middle of debate season next month, and the final one before the election comes the Friday before the election itself. If we have two more months of bad news, that’s something that the Romney campaign can exploit to their advantage. Whether it will be enough to eke out a victory is another question entirely.
Would you like to know what Justin Wolfers, NBER economist, tweeted?
@john personna:
As I think my last paragraph makes clear, I tend to agree
I really don’t see that, Doug. You say “There’s no good way to spin this report”
Wolfers, and I, see the noise. A chart is here.
Look at the little blue bar. What does it mean? It totally depends on how you extrapolate the trend previous.. If you think we dodged a big bullet in June, by not going negative, then the climb is still there, fitting a curve up from June, July, and now August. But it is noisy data. It simply won’t have meaning without a few more months of numbers.
If Mitt Romney was offering anything other than Bush II warmed over, he’d likely be well ahead in the polls right now. But he’s not.
I think we’re in for a long season of job reports like this one. The elephant in the room, that neither party acknowledged, is that we’ve hit an economic wall and there are no more bubbles left to hide it. It’s time for a new economic paradigm based on the realities of global competition, diminishing resources, limits, and sustainability.
If Romney was running another campaign, one that did not have to focus solely on tax cuts for the rich combined with a giant question mark for everyone else, he would be in a much better position right now. As it is, he doesn’t really have an economic message. And he’s not particularly good at selling just himself.
Obviously, he still has a good chance at winning. I’m not as confident as other Obama supporters seem to be. But how he will do what he seems not already to have done is a mystery.
Romney: “My plan for a stronger middle class will create 12 million new jobs by the end of my first term.”
The plan, as Romney laid out in his acceptance speech, includes: 1. making North America energy independent; 2. adding more school choice to improve education and skills; 3. forging new trade agreements and getting tough on cheaters; 4. cutting the deficit and putting America back on the road to a balanced budget; and 5. cutting the tax rate on businesses and individuals, reforming the tax code and repealing the Dodd-Frank Act and Obamacare.
Lets take them in turn:
1. Domestic oil and gas production is already at an all-time high – you aren’t going to find 12 million new jobs there. Nevermind that there is not way to make North America energy independent in terms of fossil fuels, much less do it in 4 years.
2. School choice won’t create any new jobs. Investment in education will produce better trained workers, but you aren’t going to find 12 million new jobs there in four years.
3.Economics 101: Trade agreements have no impact on overall employment. Trade substitutes better jobs for worse jobs, but leaves the job total unchanged.
4. Cutting the deficit will destroy jobs, as it will be done by increasing unemployment among government workers. He wants to cut taxes and increase defense spending, so where else can the ax fall?
5. If cutting taxes creates jobs, why did GWB leave with White House with what the Wall Street Journal called the worst record on job creation in modern history?
In short, Romney’s “jobs plan” is as big a unicorn park as is Ryan’s budget “plan”. They are both filled with nothing but wishful thinking and outright lies.
@Fiona:
FWIW, there might be some ways to dodge limits.
I do think Obama lost an opportunity to steal a march on the Republicans by not proposing a bold new jobs proposal. The Republicans would vote it down, but he could then run against that vote.
I expect that the White House considered this, but for some reason decided against it. Maybe they will still try it.
As for the Republicans, their problem is that they are ideologically opposed to any Government program aimed at lowering unemployment -apart from defense spending, and the public now wants to cut defense spending, not increase it.
Just a brief note to observe that the manufacturing sector and the export sector have a large interface. And that Europe and China have had really really bad months, too.
@Stonetools:
I think we can be sure they tested the message. Whether or not they themselves believe in a spending-based jobs program, we can deduce that they found it put them at an electoral disadvantage.
Call me pollyanna-ish, but I believe that a net increase in job creation coupled with a reduction in the UE rate will generally be perceived as good news for the campaign.
Yeah, not so sure about that….
We’re talking about Mitt “I like firing people” Romney here. His ability to use the jobs issue as an advantage is limited.
Exploit, though….good word choice.
@this:
Oops, I linked to the CR main page rather than this post.
That’s the permanent address of the “little blue bar” of which I speak 😉
Doug,
Can you provide us some evidence, models, etc. that demonstrates an effect of jobs reports on presidential election outcomes?
Investment in education: this isn’t happening and I will be very surprised if it does anytime soon. For the first time that I can remember, states and counties are laying off teachers and others that work directly with students. This is unheard of and will have a detrimental effect on the future of this country. 30+ students packed in classrooms are now common. The requirements of Individualized teaching will be very hard to meet. The Federal government cuts eliminated a lot of teaching positions in the exceptional children programs: the very ones who need the most help. This is a disgrace. I know that some teachers’ jobs were saved with the stimulus, but that has ran out. The problem with the stimulus was that most of the money went ridiculous and wasteful “projects”: very few jobs were created and the ratio was $800,000 per job!. For a report on the coming economic collapse go to http://www.thestreet.com. Things are just going to get worse no matter who is elected.
@Me Me Me:
I suspect that the Romney plan we would see in reality would be far worse. I’m thinking along the lines of an Enron-style debacle. Don’t forget that one of his advisers is Kevin Hassett, the guy who wrote Dow 36000 .
I’m thinking tax cuts for the rich and everybody else, ramped up defense spending, and a complete walk back on cutting of the deficit or reforming the tax code. None of his numbers will add up. HOWEVER–his game changer will be some sort of revaluation of the fiscal picture, a la Enron, a la Dow 36000. The end result will be a few years of responsibility on paper and then the outcome of Bush II squared. It will be a grand fiasco that we will be forced to accept as the nature of government spending, just as Republicans are pretending that the housing bubble collapse is what happens when you have entitlements or something.
Blah….blah….blah…bad jobs report….Obama doomed…blah…blah…blah
Cause we all know those finicky Independents out there are swayed by this….right?
Bottom line….anybody that is a true “swing voter” at this point swayed by a jobs report that will be revised anyway is a moron. That said the 8.1% number is a number they might understand, the 96,000 number (remember morons are not good at arithmetic) flies over their head and labor participation rates….forget it…that is way too hard for a moron to grasp.
They might be swayed by the pretty graph showing the blue above that line and the red below it. That looks good they will think. Not that they know what the line means or anything. So Obama wins the by virtue of a decline in the unemployment rate and the pretty graph
Or they will decide to give the rich people more money, forgo health care, grandma will have to do without Medicare, make sure the lazy minorities get no welfare and agree to have their taxes increased because….well because they are morons. And arithmetic is hard. And Obama is black. And they might get rich someday and get a tax cut. But wait…these people are not swing voters
I have said, still say and will always maintain that the jobs report means nothing UNLESS is shows a very sharp increase or decrease. Very sharp. If this happens in the next two reports given the background data it’s likely to exceed the current trend (favors Obama). This election going forward is about GOTV and the debates. Romney lags behind in one and will be severely challenged in the other
“…It makes one wonder why analysts pay so much attention to the ADP report to begin with…”
That’s hilarious…because when the ADP report is weak you trumpet it from the hilltops…yesterday when it was strong you totally ignored it. I guess it’s all about team sports, eh?
Good news? Not at all.
Better than the last time the Republicans were in the White House? Yup…by a factor of 4.
How would a President Romney change things? By giving himself a big fat tax cut.
@john personna:
Then maybe it’s time we stopped indulging the electorate and start telling the truth that the stimulus worked, but was inadequate. Even former Republicans like David Frum and BruceBartlett are calling for another round of stimulus- one including more government spending and less tax cuts. Heck, the vast majority of economists would support this.
The frustrating thing is that instead of discussing a second round of stimulus and what it should like, we are re running Hoover’s approach to the economy- cutting back sharply on government spending and employment and budget balancing. Not surprisingly, the results are the same- a stagnant economy with high unemployment
@Stonetools:
I think we should have a discussion about the forward economy. What I’d compare it to myself was the dot-com crash, responses, and then the late responses, that (un)arguably fueled the housing bubble. Given there will certainly be a sell-by date for the whole idea of Great Recession responses, where is that line?
I certainly do not believe that a government can run on permanent stimulus. As some point you structure for long term growth.
This may seem like spin but the fact this, this was the best August for job creation in the last SIX YEARS!
@Carson:
On that we agree. The question is how much worse will it be under Obama as opposed to Romney. On this score, I think Romney loses. His combination of Bush era tax cuts and military belligerence will dig us far deeper into the whole than anything Obama might do (especially as Obama will be constrained by Congress).
@john personna: Thanks for the link. Looks like an interesting read.
@Stonetools:
I doubt that’s actually true, for good reasons and bad. The bad reason is that economics is at least half politics, and none of the right economists support this. On the left economists, I’m not sure we have recent data.
I view a call for stimulus from a year ago as a bit dated.
if there was a republican in the white house i’m sure everyone here would say he/she “doesn’t like blacks’. really, 14.1% unemployment for blacks, nearly twice as high as whites? and no solution aside from “trust me” from obama? he got paid, when will you?
Sooner or later people are going to have to realize these jobs reports aren’t game changers.
We have had bad job reports 3 out of the last 4 months and the race hasn’t budge an inch. The media will talk about it all day, but in reality it is irrelevant towards the election.
@bill:
Of course, if the Obama WH actually attempted to craft policy specifically aimed at “blacks” you’d flip your sh*t.
Actually, I’ll rephrase that, since I can’t read Bill’s mind: large portions of the Right would flip their sh*t. Bill might not mind, I don’t know.
@Herb: We’re talking about Mitt “I like firing people” Romney here.
Romney’s exact quote: “I like being able to fire people.”
This is in contrast to Obama and the union’s world, where no one can ever be fired for anything.
Herb, must you repeat that old, tired lie? Or do you hope that if you keep repeating it, it might actually become true?
@bill:
I’ll give you the benefit of the doubt, and explain it. The President did actually address this in his speech, with strong emphasis on college as a path to success. Unemployment tracks educational attainment. College education is lower for blacks and hispanics.
@john personna:
John a noisy report is not a good report….hence you can’t really spin it as “good”.
Second Doug’s last paragraph makes it pretty clear that while this isn’t good it is a single data point and we have at least several more releases before the election….so take this report with a canister of salt in regards to determining the election.
If the future reports are not much better to worse it doesn’t help Obama. May not hurt him that much, but it certainly doesn’t help. For Romney it does not hurt him and may help him. If that scenario plays out it is a “weak” good thing for Romney.
@Steve Verdon:
Steve, we’ve known the shape of this important graph for a year or more, right?
Month-to-month data has not changed the shape of that graphs in years, right?
Ex-census, all the only changes have been the barest of wiggles.
(Doug is the one selling “this month’s report,” not me.)
@Rob in CT: i wouldn’t mind, he’d actually be doing something somewhat positive.
@john personna:
We are a long way away from the idea of ” permanent ” stimulus. Other countries have had more than one round of stimulus. Like the Obama Administration, they miscalculated the depth of the current recession,recalibrated, and were politically able to enact more rounds of stimulus. Our political system has so far enabled the minority party to block any attempt to recalibrate.
@john personna:
I think the scholarly consensus would favor a second round of stimulus. You would not get unanimity for idealogical reasons, but a large majority would favor a second round
@ iNDIANA jONES #13…
Actually what he said was:
Stop lying.
Continued weakening of the job market. If only there was something we could have done a year ago about this.
@Jenos Idanian #13:
Of course he likes firing people – it’s how he made his $250M fortune.
@john personna:
Structuring for long-term growth requires a thought process that considers long-term factors. America left that behind long ago.
Mitt Romney’s problems exploiting the job numbers was shown in a conversation on CNN between Mitt and reporters. He started by attacking Obama over the job numbers. When the reporters asked what would do to turn things around, he rattled off his five point “plan”.When asked how specifically how it would help with unemployment, he cut the conversation off and referred them to a later campaign stop, where he would say more. Clearly he didn’t want to talk about his job proposals to a skeptical audience!
Looking around the right wing blogs, they gleefully savaged Obama on the job numbers-but were silent on what could be done toimprove the unemployment situation. That’s why the unemployment situation won’t help Romney much.
Also too, the public has seen what the 2010 Congress did to help unemployment-zero. That’;s not an example that would lead the public to buy a pig in a opoke again.
Here’s the chart of private sector job growth over 10 years. The trajectory of growth under the Obama Adminisrtation is parallel to that of the last Republican Administration.
http://research.stlouisfed.org/fred2/graph/?chart_type=line&s%5B1%5D%5Bid%5D=USPRIV&s%5B1%5D%5Brange%5D=10yrs
Here’s the public sector job growth over the last 10 years.
http://research.stlouisfed.org/fred2/graph/?chart_type=line&s%5B1%5D%5Bid%5D=USGOVT&s%5B1%5D%5Brange%5D=10yrs
Look at how those Republicans grew Government. Look how Obama the Soshulist has shrunk Government.
This is a DEMAND crisis. If consumers aren’t going to spend money then businesses aren’t going to spend money. That only leaves one place for the money to come from to create DEMAND.
Republicans, by refusing to provide aide to the states and by refusing to invest further in infrastructure, are intentionally holding back the economy.
Obama laid out the choice clearly last night…we can invest in infrastructure and education…or we can give Romney a tax cut and reduce investment in education and infrastructure even further.
Take a look at those graphs and tell me which approach is going to have the biggest impact for workers and the middle class.
@Steve Verdon:
Correct. Good to see some realistic thinking in the comments.
@Ben Wolf:
I’ve thought for a while that any jobs number over 120k clearly helps Obama while anything under 70k will definitely help Romney. Anything in between probably helps whichever candidate is leading.
and more lies from the uber-conservative CNN!
The President made a major error in not centering his campaign on unemployment. Had an all-out assault on joblessness been his focus we would not see such a tight race. Instead he continues to talk about cutting deficits, living within means (as though that applies to government) and entitlement reform. It suggests his campaign message isn’t targeted at the middle-class at all.
@David M: 120K is not enough to keep up with population growth, so while it isn’t bad it isn’t really good either. Of course if it is substantially over 120K, say by 2x for example, then that is good. But we don’t see that that often these days.
@Steve Verdon:
I meant good news for his campaign; we clearly need several years of +150/k jobs per month to keep up with population growth and catch up from 2008.
@Stonetools:
Oh I understand that, but I’m trying to distinguish between 2010 and 2013 or 2014. I do remember big consensus. Here are “300 economists” looking for stimulus in 2010. I don’t know of any such roll-calls now.
Here are some bullet points on my thinking:
– stimulus spending can be both necessary and effective
– in general I support counter-cyclical spending by government
– stimulus spending should be “for things we need”
– I supported a messier stimulus than that in 2010 because things were bad
– things are not so bad now, we are not in free-fall
– we are in a (disturbingly) stable, slow recovery
– given our stability we should judge spending more strongly on merit
Who knows, maybe that’s not so far from our moderate President’s position.
If you want to get me on board with jobs spending, you should probably name really good, and not make-work, projects for 2013 and beyond …
(I support defense cuts because I think over-spending there is the same kind of “make work” that I oppose elsewhere.)
@Ben Wolf:
I have never understood why Obama didn’t focus like a laser on unemployment and submit job bills to Congress to have the Republicans vote them down again and again . He never made the Republicans in the House pay for their obstruction of the job bills. Indeed, a problem with Obama is that he often does not seem concerned about reducing unemployment at all.
Obama seemed lo have never understood that unemployment is really the number one issue for middle class and working class voters, not the deficit. The deficit is more an issue for well off voters with secure employment. Many of those call themselves ” independents” , but frankly most of those independents are -like Doug- Republicans in name only, and were never voting for Obama .
I’m OK with trying any and everything. I think a problem with the first round of stimulus is that it was in a certain sense TOO efficient. They doled out the tax cut in a way that made it invisible to people, and so Obama got no credit for the tax cut . The aid to states was never identified with the stimulus. I think it would have been a good thing to do a CCC type program. Conservative and even liberal economists rail against such programs as inefficient, but the general public looks back fondly at such programs as being what job programs should be . Sometimes you have to give the people what they want.
We could also look at what worked in Germany, which conservatives hold up as a model stimulus-an expanded Cash for Clunkers and “Shortwork” ( job sharing). THere’s a lot that could be done.
You have 7 million people 65 or older still in the employed labor force. Retire already! Oh that’s right, they can’t because they are broke. Shouldn’t there be an age limit in Congress? Could free up a few jobs. No credit, lost net worth, deleveraging, no wage growth…going to be ugly for a while no matter who puts up a kool aid stand in front of the White House. I didn’t watch either the DNC or the RNC. Did either of them talk about the housing market? It’s kind of a big deal.
If that really worries you so much, perhaps you might consider directing those questions to the Romney Campaign and the lies they are spewing about the President and welfare reform…
@Jc:
And you’ve hit on one reason I don’t want to raise the age people are eligible for Medicare or cut SS benefits.
For what it’s worth, it looks like Matthew Yglesias picks up the same vibe as I, about some kind of policy corner turned.
@David M:
It is growing too, it sucks. In 2002 you had 4.2 Million 65 years or older and a 12.9% Labor Participation Rate. Now is 2012 its 7.2 Million 65 years or older and an 18.3% labor participation rate. That is not a good trend for young workers coming into the workforce. If 2 Mil of these 7.2 are jobs that could be filled by those unemployed, that would move U3 to 6.9%. I just don’t see how this trend is getting any better, it points to unemployment staying at a stagnant level for a long time.
@john personna:
I think the scholarly consensuis among economists favor a second stimulus. You’ll never get unanimity on the issue for idealogical reasons.
The Obama Administration miscalculated on the size and shape of the first stimulus, and thus were open to attack when it “failed.”They are going to have to find some way to sell it. the alternative will be economic stagnation for years, and poissible electoral defeat in Novewmber. Its a tough sell, but its better than pretending that the current course will save us.,