The president is completely and totally wrong about it. No surprise — he’s completely and totally wrong about most things.
49 thoughts on “The Reason For High Unemployment”
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The president is completely and totally wrong about it. No surprise — he’s completely and totally wrong about most things.
Comments are closed.
Quick – somebody call the Bureau of Labor Statistics, who said in their news release (at link): “Employment in both state government and local government continued to trend down, with April losses concentrated in the non-educational components.”
Oh, and the numbers cited on the National Review page don’t seem to match the BLS numbers available here.
Other than that, looks like Jim Geraghty’s done a bang-up job on his research.
He’s so monumentally wrong on SO much about the country, that I always wonder WHO gives him his numbers?
WHY is he this wrong?
Just reading a newspaper or watching Katie Cutiepie would tell him that what he ‘knows’, just isn’t so. Is he just stupid, or is he intentionally misleading people? It’s so hard to tell with liberal Democrats, what they truly believe, vs the BS they shovel for the masses.
There are a ton of ways to look at his ‘wrongness’, but I think he’s a dupe. But for who(m)?
Hint to Chris: The word federal means something. It isn’t a newfangled way of putting a space into your sentence.
Congratulations for managing to distinguish between the apple and the orange though, it is an improvement.
What Obama said was accurate, if not exactly earth-shattering:
Geraghty seems to have completely and totally missed the “in part” qualifier.
Oh, and the numbers cited on the National Review page don’t seem to match the BLS numbers available here.
Well that’s not surprising, Gerrib pulled the wrong chart. Try this one.
Is there some reason to exclude farm workers when looking at total employment?
I suspect they are excluded because they are specifically seasonal and would skew trends every spring and fall. Their not ignored, rather they are filtered out to prevent unnecessary noise in tracking overall health of the economy.
Then you’ve just pointed out another problem – the government data sited are NOT seasonally adjusted. Geraghty is comparing apples to bananas. (You don’t think the governments might hire some additional snowplow drivers during the winter, for example?)
The point remains – the “government jobs are falling” line comes directly from the BLS news release. If it’s not correct, the problem is BLS’s, not Obama’s.
“The reason the unemployment rate is still as high as it is, in part, is because there have been huge layoffs of government workers….
“But re-elect me, and I’ll do my best to decrease unemployment by expanding the State and making sure to it that people who are useless idlers now become taxpayer-paid parasites!”
He destroyed Bin Laden.
Now let him finish what he started on America!
Obama-Soros in 2012!
Then you’ve just pointed out another problem – the government data sited are NOT seasonally adjusted.
Um, no. You apparently don’t understand the statistics. Farm labor has historically been a poor economic indicator. Including it skews results such that you can’t make reasonable predictions. Now I realize feel good socialism requires total inclusion, but it doesn’t make for good prediction of future outcomes. So rational people exclude farm labor, so they have a better tool to gauge economic health.
Besides, Gerrib, you can’t have it both ways. You can’t complain that Geraghty numbers don’t match BLS and then complain about the BLS having a statistical tool that’s been around for decades. But if it makes you happy, Agricultural jobs are reported in table A-14. They show a gain of 50,000 workers between April 2010 and April 2011. That’s .3% of the current unemployed numbers or .02 points difference when looking at the
98.7% unemployment rate. Do you think unemployment at 8.68% is great news? Should we find quotes from you about how bad the economy was at 5% unemployment?There are two problems with Geraghty’s article. First, the “government jobs are declining” comes not from Obama’s imagination but from the news release by the Bureau of Labor Statistics. The second problem is that the original version of the article, by mixing adjusted and non-adjusted numbers, came to the wrong conclusion.
These problems remain despite your arguments otherwise.
No, the problem is your desire to look at other BLS data that Geraghty didn’t use, and claim that was the data he used incorrectly. I’ve already pointed you to the correct data, and it is the same data released by BLS. You then complain that the data provided by the BLS is I guess corrupt because it doesn’t use farm data, which is both statistically irrelevant to the argument and historically inaccurate as an economic indicator thus the reason BLS provides statistics without it.
The problem is education in economics in and around Chicago sucks, which explains why that state may beat out California in declaring bankruptcy.
Jim Says:
May 12th, 2011 at 11:37 am
“What Obama said was accurate, if not exactly earth-shattering:
The reason the unemployment rate is still as high as it is, in part, is because there have been huge layoffs of government workers….
Geraghty seems to have completely and totally missed the “in part” qualifier.”
Except that Geraghty shows that the trend in government employment has increased. I quote him::
“As you can see, in terms of total number of Americans employed in government, there has been no real discernible recession. In fact, the number has increased slightly.”
So even the “in part” is wrong.
When Obama, Reid and Pelosi utter their astonishingly stupid statements ( eg Cowboy Poetry
and government spending is the best job and dollar multiplier), I am for several moments speechless.
Do they REALLY think that? Really? Or are they so arrogant and think the public so stupid, and sound byte driven, that they can say anything and the masses will nod their heads in agreement?
Of the two possibilities I hope for the latter. The former is just to cataclysmic to take…….
I’ll help you out Chris. First number is from the article and the second number is from Leland’s link.
Total April 2011: 22,594,000 vs 22,166,000
State April 2011: 5,253,000 vs 5,111,000
Local April 2011: 14,492,000 vs 14,202,000
But the article was comparing 2007 to 2011. If the 2007 numbers were correct, then there was a loss of 10,000 jobs in total with states adding 335,000 and local govs cutting 312,000. This would mean the federal government lost 13,000.
So federal and state appear to be stable over those years, as the article claimed, with states adding jobs but the local governments were hit pretty hard, which was missed by the article.
If you look at just the last year, total government jobs have shrunk by 24,000 with local governments making up the majority of the losses (14,000). This still looks pretty good in comparison to private sector job losses.
Obama doesn’t really have a grasp of what makes the economy work. In another speech he said that the economy isn’t recovering because business aren’t hiring people, implying that it is the fault of businesses and not the market conditions that prevent them from hiring more people.
Hmm…
Looking at those numbers again. Local governments losing 14,000 jobs over the last year breaks down to 280 jobs/state or 245/57 states. Divide those jobs by the number of cities in a sate and it really amounts to a small average.
Makes you wonder how many jobs would have been saved if pension and health care for government workers was not so unsustainable.
I don’t know about other states, but here in NC they are ‘hiring’ even though we have a hiring freeze. The new hires are going into jobs that were ‘there but no filled, but funded’. That means that their numbers aren’t included in the ‘official’ tally. But NOW said jobs require a paycheck. Where I come from, no needed paycheck last month, needed paycheck this month, means MORE jobs filled, not less. It’s typical gub’ment smoke and mirrors.
And, I have little doubt that the geniuses here in NC are the only ones who found said loophole(s).
(Obama is still clueless, regardless of who has a job)
First, the “government jobs are declining” comes not from Obama’s imagination
“Huge layoffs” is Obama’s own phrasing, implying the government sector has really taken it on the chin. That comes from Obama’s tiny Marxist brain, not the BLS. It’s a fantasy. A falsehood. A lie.
And “declining government jobs” (not Obama’s “huge layoffs” lie) could come from voluntary/early retirement, with redundant/useless jobs (hard to imagine in government, I’m sure) not being subsequently filled. This would not increase unemployment, which is part 2 of Obama’s stupid lie.
Geraghty issued an update at the bottom of the original article to include the non-seasonally adjusted numbers. It does come out to a loss of 300,000 if you go by those numbers. But he then does make a good point that this is hardly a “HUGE” loss when it really only constitutes 2.4% of the total unemployed workforce. And really, are we all that surprised that Obama would choose to go with the numbers that show a loss? Of course he is going to use the numbers that show a loss to legitimize further soaking the public service unions with ever greater sums of money. But this just begs the question: Wasn’t that what all the Stimulus money was for? You know, to save all those teachers, fire fighters, and police officers jobs. I guess that Stimulus didn’t end up working to good after all then, huh? Oh well, not like that bit of logic will ever keep from him proclaiming that he pulled us back from the brink of the GREATEST DEPRESSION MANKIND WOULD HAVE EVER KNOWN!
Gerrib: the government data sited [sic] are NOT seasonally adjusted
Essentially correct. Here are some data downloaded from the BLS website. The query I pulled shows both seasonally adjusted and non-adjusted data. The regular spikiness of the non-adjusted data should tell you why seasonal adjustment makes sense, if you want to compare data from different months of different years. For the rest of this post I talk only about seasonally adjusted data.
Summary: private employment experienced a severe downturn from which is has not emerged. In fact today’s employment, though trending upward, is only an iota above the post-9/11 trough. Federal government employment was essentially steady before Obama took office and more or less steady afterwards (except for the census spike) but took a jump when Mr. Obama was sworn in. State government employment grew steadily from January 2004 right through the beginning of the recession, peaked in the fall of 2008, and has been declining since. Local government rose steadily through the Bush administration, peaking in September 2008, and has been declining since. Total government rose steadily until fall 2008 and has been declining since. The one thing Geraghty is essentially right about is that the decline in private employment was significantly larger (-7.6%) than the decline in government jobs (-2.27%) [seasonally adjusted, peak to trough]. But he expresses it as a percentage of unemployed represented by government layoffs on a non-adjusted basis, which throws several handfuls of mud over the lens.
So I think there is an argument that what Obama said is fair, if you’re looking at seasonally adjusted numbers, which you should. But the elephant in the room is that Obama spent a trillion dollars on stimulus with little or nothing to show for it.
The only sector of our economy not in recession under Obama is government workers. That is what the porkulus did; it allowed states to delay making tough decisions. I am a teacher, but the simple fact is that states can’t spend more money than they take in. Many of my colleagues moan when jobs have to be cut, but I see every day that maybe a quarter of the teachers I work with are just a massive waste of space. It is time for merit pay and merit firing of teachers. It would keep the terrible teachers from giving the good ones of us a black eye. Now, the federal government employees more workers than ever before. DC is about the only good real-estate market in the country. This always brings me to my great debate. Is Obama lying or simply incredibly ignorant?
but I see every day that maybe a quarter of the teachers I work with are just a massive waste of space.
It’s not just teachers. Where I work there is a great deal of redundancy here. Layoffs have already occurred and will continue to occur. But I still remember someone saying a year ago, “they can’t cut anymore, we already are to are minimums”. This at a meeting with about 16 people, in which only 4 had any role to play at the meeting and perhaps 2 to 4 others could be useful in learning the ropes or providing fresh ideas.
BTW, I count myself with the redundancy and am ready to move on. But I like the team, so I’ll stick around a little bit longer.
DC is about the only good real-estate market in the country.
Yep, and several people I know are headed there for jobs. I refuse to do it, because I suspect those jobs will start feeling the recession as the new Congress starts redistributing the money away from DC and back to the states.
Except that Geraghty shows that the trend in government employment has increased.
No, Geraghty corrected his numbers, and they show that the number of government jobs has fallen from 22,582,000 in January, 2009 to 22,166,000 in April, 2011, indicating a loss of 416,000 government jobs while Obama has been in office.
But it doesn’t really matter. All Obama said was that there have been huge government layoffs (Google “teacher layoff” if you doubt that has happened), and that layoffs increase unemployment — which is a bit like saying that more water makes things wetter.
And this bland tautology sent Geraghty into a sputtering fit, driving him to label it “Extremely and mind-bogglingly wrong. Epically wrong.” Geraghty’s over the top reaction is much more interesting than Obama’s statement.
In Geraghty’s defense, Obama’s sentence has some spin on it — he starts it with the definite article “the”, and later changes course by inserting the “in part” qualifier. But all the same, it isn’t a very complicated sentence, and Geraghty is not new to the English language.
Geraghty’s reaction is a great example of motivated reasoning: he’s so sure that Obama is lying that he reacts to an enormous lie that only exists in his imagination. I imagine that a similar process is going on when so many on the right jump to the conclusion that Obama’s sane space policy must be aimed at ending manned spaceflight. They start from a position of being sure that Obama is up to no good, and so don’t even bother to look at the specifics.
But the elephant in the room is that Obama spent a trillion dollars on stimulus
Obama did not spend a trillion dollars on stimulus.
Yesterday I asked WHO does Obama get his intel from concerning items that cross his desk. Well, thanks to Elliot Spitzer, we may have ONE of the suspects!
Just imagine the fall out if GWB had kept Limbaugh, Hannity or O’Reilly on speed dial for ‘wisdom & advice’, and it came out on Glenn Beck’s show. The horror, the horror!
Obama did not spend a trillion dollars on stimulus.
Jim, the number is well over $4 trillion. First, there’s the $750 billion half of TARP that he signed off on. Then there’s somewhere around $600 billion from ARRA. Then I understand the Fed has spent somewhere around $3 trillion on “quantitative easing.” Plus there are other bits of money here and there.
First, there’s the $750 billion half of TARP that he signed off on.
TARP was signed by Bush, was not stimulus, and the net spending was under $25B.
Then I understand the Fed has spent somewhere around $3 trillion on “quantitative easing.”
You understand wrong. Quantitative easing is not spending, and Obama is not the Fed.
Obama did not spend a trillion on stimulus.
Quantitative easing is not spending
LMAO Yeah, keep saying that as if the technicality means anything in the real world. Just printing more money doesn’t do anything to the economy. It has to enter circulation.
Obama is not the Fed.
He just appoints the Chairmen of the Fed, who came up with TARP, ARRA, and QE 1 and 2; and Obama (as Karl wrote) signed off on all of them. Yeah, we can hang TARP around his neck. He proudly voted for it, which is abnormal for the “present” Senator from Illinois.
Obama did not spend a trillion on stimulus.
Like Karl said, he’s spent more.
the net spending was under $25B.
Yeah, and look what else the CBO said: Our 2001 Ten-Year Budget Projection Was Off by $11.8 Trillion
Good times, good times. If you click the link and then read the CBO chart; you’ll see something interesting happens to the numbers in 2009. In fact, if you go back to 2008 and see the first budget passed by the Democratic Congress; the problem sort of jumps out at you at the line: Actual Surplus or Deficit.
Yeah, keep saying that as if the technicality means anything in the real world.
Words have meaning, and quantitative easing is not spending. Fiscal policy and monetary policy both affect the economy, but they aren’t the same thing.
He just appoints the Chairmen of the Fed, who came up with TARP, ARRA, and QE 1 and 2
The Fed is an independent entity; Obama can nominate members, but he can’t control what they do. We don’t say that Kennedy was against Roe v. Wade because Kennedy nominated Byron White, who voted against Roe v. Wade. White was a free agent, and Bernanke is a free agent.
And Bernanke did not “come up with” TARP or ARRA; they came from the White House and Capitol Hill.
Yeah, and look what else the CBO said
The CBO’s inability to project 2011 deficits in 2001 (without knowing about 9/11, wars in Afghanistan and Iraq, Medicare Part D, the Bush tax cuts, and the Great Recession) has nothing to do with whether Obama spent a trillion on stimulus. He didn’t.
As for 2008 and 2009 in that chart, they show a ballooning deficit caused primarily by a drop in revenue (down $750B between 2007 and 2009) and growth in mandatory spending. In other words, they show a recession.
Jim, I’m not sure exactly what your objection is to saying “Obama spent a trillion dollars on stimulus”. Is it that ARRA alone did not amount to $1T, that ARRA included tax incentives as well as outlays, that not all the money has been spent yet? Just pointing to a lengthy Wikipedia article detailing all the spending categories in ARRA doesn’t clarify your meaning. I’m contented to point out that the difference between $787B and $1T amounts to 1 decibel of spending. If you subtract the “tax expenditures” [sic] and funds not yet expended, but add in the other goodies passed in separate bills, like the unemployment benefit extension, cash for clunkers, bailouts of GM et al., etc. the total is significantly more than $1T.
Jim, I’m not sure exactly what your objection is to saying “Obama spent a trillion dollars on stimulus”.
His objection is that it makes the Messiah look bad.
Jim, I’m not sure exactly what your objection is to saying “Obama spent a trillion dollars on stimulus”.
If you Google “trillion dollar stimulus” you will get lots of hits. Most of them are talking about the ARRA exclusively. They round $787B to $1T, and ignore the over $200B in ARRA tax breaks, resulting in the misleading meme that Obama spent $1T on ARRA stimulus — when in fact he spent just over half that.
If you … add in the other goodies passed in separate bills, like the unemployment benefit extension, cash for clunkers, bailouts of GM et al., etc. the total is significantly more than $1T.
No, it isn’t. The ARRA included about $550B in stimulus spending. The other bills you mention do not come close to totaling $450B. Cash for clunkers was all of $3B. Unemployment extensions are more social safety net than stimulus, and I believe well under $100B. The Detroit bailouts were not a stimulus measure any more than the 1979 Chrysler bailout and the 80s S&L bailout were, and they had costs in the tens, not hundreds, of billions.
Obama’s trillion dollars in stimulus spending is a fantasy; it never happened.
His objection is that it makes the Messiah look bad.
No, if Obama had in fact spent a trillion in stimulus, he would look better in my eyes.
We don’t say that Kennedy was against Roe v. Wade because Kennedy nominated Byron White
Nope, Kennedy was a Catholic. He was against Roe for that reason, and therefore nominated Byron White.
BTW, I guess the new election cycle has begun and their paying Jim again.
Words have meaning, and quantitative easing is not spending. Fiscal policy and monetary policy both affect the economy, but they aren’t the same thing.
Uh huh. Quantitative easing is just the term for the Fed spending somewhere around $3 trillion to buy bonds.
Words have meaning, and quantitative easing is not spending. Fiscal policy and monetary policy both affect the economy, but they aren’t the same thing.
Uh huh. Quantitative easing is just the term for the Fed creating and spending somewhere around $3 trillion to buy bonds.
Now we know where the stimulus money went and why he wants more of it.
You guys have let Jim define the terms of the debate. The bottom line is that Obama is running massive deficits which are increasing faster than at any time of peace in the history of the Republic. It is unsustainable, and it is getting near the point of no return.
And, we have nothing to show for it.
Quantitative easing is a term meaning monetization of our debt. Inflation is already high and accelerating due to it, and it’s really going to hurt when the recent deficits, which were financed short term, have to be refinanced, as bond investors will demand a higher return to offset the devaluation of the currency. We are in a positive feedback cycle which is going to require harsh medicine to counteract.
Inflation is already high and accelerating
No, core inflation is at a 50 year low, and inflation expectations are dropping.
bond investors will demand a higher return
If bond investors expected a credit crunch they would be demanding a higher return now. They aren’t: interest rates remain near all-time lows.
If you can predict future interest rates better than the bond market you have an excellent opportunity to make yourself very, very rich.
The bottom line is that Obama is running massive deficits
Most of which is due to the recession, the 2001 and 2003 tax cuts, and the wars in Afghanistan and Iraq.
Most of which is due to the recession.
That started under the Democratic held Congress. The other stuff is noise in comparison, and the article is written by the Deputy Democratic Staff Director for Senate Dems from 2001-2004. I suspect he would complain about policies he was against, but that doesn’t explain why we have a deficit $1.8T higher in the last three years than the previous 7 years. The growth in spending is damn near exponential once the Democrats took office, and the tax revenue base has only gotten smaller because of the destruction to the base economy from new regulation.
The other stuff is noise in comparison
How do you figure? According to that link the recession is the biggest contributor to the 2011 deficit, but not by much:
Recession: $404B
Tax cuts: $375B
Wars: $191B
The growth in spending is damn near exponential
When you’re in a recession you spend more on unemployment compensation, food stamps, and Medicaid. It’s part of the business cycle.
the tax revenue base has only gotten smaller because of the destruction to the base economy from new regulation
Federal revenue fell $400B between 2008 and 2009, but grew between 2009 and 2010 and is forecast to grow again in 2011. Revenue fell because the recession dramatically shrank the size of the economy, not because of any regulations issued by Obama.
“No, core inflation is at a 50 year low, and inflation expectations are dropping.”
What a pantload. When you can define inflation any way you please, it can look any way you please. But, people who do the shopping know their money is rapidly losing value, and the decline is accelerating. Under the rules for calculating inflation prior to 1980, the rate is over 10% per year. Even the “core” rate, excluding food and gas (!) this year has been running 1.63%,2.11%,2.68%,3.16% for the first four months.
“If bond investors expected a credit crunch they would be demanding a higher return now. They aren’t: interest rates remain near all-time lows.”
But, everything above a two year note has jumped substantially in the last 8 months. It’s a lagging indicator. When it takes off for real, it’s gonna’s hurt real bad.
“All of which is due to the recession. Period.”
Fixed that for you. And, the Great Recession is Obama’s fault for his monster deficit spending, and business unfriendly policies.
Try again:
The inflation rate according to the old rules is over 10% per year.
It’s still not coming out in the preview. Here’s the link directly:
http://www.cnbc.com/id/42551209
And, yes, I say over 10% because it was 9.6% when the link came out, and inflation has accelerated since then.
excluding food and gas (!)
Commodities like food and gas have very volatile prices. Economists are more concerned with core inflation, where wages go up, increased production costs are passed to consumers, who respond to reduced buying power by demanding even higher wages, in a self-reinforcing exponential spiral. That isn’t happening now, because with 9% unemployment workers are in no position to demand higher wages.
But, everything above a two year note has jumped substantially in the last 8 months.
And dropped in the last month. The 10 year T-Bill is no higher than it was a year ago, and much lower than it was in 2006. Unemployment is a real crisis here and now; future high interest rates are a hypothetical bogeyman.
When it takes off for real, it’s gonna’s hurt real bad.
The bond market’s expectations are reflected in low current interest rates; the professionals don’t think rates are about to “take off for real.” If you know better, you can make a lot of money.
“Economists are more concerned with core inflation.”
How very detached and academic of you. But, food and gas have long term pressure to keep rising, and other prices must soon follow.
“That isn’t happening now, because with 9% unemployment workers are in no position to demand higher wages.”
So, basically, your solution to our woes is to keep unemployment high so that the Government can borrow lots of money at low-ish rates? If not, what do you plan to do if and when unemployment rises?
“And dropped in the last month.”
What is the 6 month trend? I thought you were all for ignoring short term volatility.
“Unemployment is a real crisis here and now; future high interest rates are a hypothetical bogeyman.”
It does no good to leap from the frying pan into the fire. The average maturity on all outstanding US government debt is less than a decade from now. Any uptick in interest rates by that time will be ruinous.
According to sources such as this, this, and this, average maturity is currently less than 5 years. I do not know the distribution, but if the mean is anywhere close to the median, then 1/2 is going to have to be refinanced over the next 5 years, and interest rates will have a HUGE impact on that.
One more thing on this:
“Unemployment is a real crisis here and now…”
But, current economic policies are not helping with that either, so we have the worst of both worlds: high unemployment, and rapidly increasing debt.
Face it. Keynes has failed. Again.