The Virginia Congressman, just having beamed in from some other planet, says “the economy has recovered“:
In fact, in the last six months more jobs were created than Bush was able to generate in eight years, Chris. People don’t understand that, the economy has recovered.
Guess he picked a bad week to keep huffing glue.
Meanwhile, back on Planet Earth, Rick Santelli goes off on another righteous rant, and says to “stop spending.”
Here’s to that. Hope it stirs the folks up again, though he should have waited until closer to November. Of course, I suspect there’s plenty more where that came from.
The Wall Street Journal says that Bush created 375,000 jobs per year in office.
Obama created 431,000 jobs in May, on top of several other months of positive growth.
Not sure who’s huffing glue here.
You could cherry-pick a single month for GWB’s job creation numbers, too, if you wanted to make numbers look impressive, Chris. It’s still a false comparison, considering GWB’s numbers are averaged over an 8 year span that started in the middle of the tech bubble burst and ended during a recession.
Thanks for the link, though, because it includes a nice tempering of your pointless statistic: “The net gain in government jobs was 390,000, while the private sector added only 41,000.”
Oh, and Obama also has the legacy of being the president to power through ceiling to have government employment out-number private employment for the first time in the history of this country.
It’s pretty easy to “create jobs” when you’re just putting them on your own payroll. Ask M.C. Hammer how that worked out for him and his “employees”…
I suppose we should be grateful for any job opportunities that are created during times like these, even if they are temporary.
However, I think claims comparing job counts between past presidents and Obama need to acknowledge that current additions are mostly temporary and that any reporting of prior administration job increases would by their very nature not include any temporary jobs. As a result you are comparing apples to oranges.
Or, we can revisit this in six months after the temporary jobs have run their course and note that at least W added 375,000 jobs per year while the job market has consistently shrunk under Obama’s guidance.
How did Obama “create” those jobs? Since his academic records have been sealed, maybe he went to Hogwarts? If he can create 431,000 jobs in one month, what’s stopping him from waving his magic wand–the one that creates a demand for goods and services that wasn’t there pprior– and create a million jobs?
Maybe Gerrib was the one huffing glue …
Gerrib better not be huffing glue. We need him as the bellwether for whatever the Hive’s current party line is. If he starts huffing glue, he may start accidentally start posting rational statements grounded in history and sound economics (“wow, dude–the law of supply and demand–what a concept!”), and then we’d have to go somewhere else to find out what the party line is.
Of course, there’s always Jim.
Temporary jobs funded by increasing debt are just that – temporary. Very temporary as they do not pay their way. At this stage in the game, every additional government job will cost more than one job in the private sector. With optimal government, government sector jobs should ultimately generate as much wealth as private sector jobs – few would argue that this is currently the case.
Like debt, one can not directly swap private sector jobs for public sector jobs – there is an entropy cost in doing so (public debt/jobs are currently excessive and less economically productive than private sector debt/jobs) and so one gets less jobs out that one puts in, so to speak.
So, when those census workers are laid off, will the Administration count those as “jobs lost”?
Under the Bush administration, we had 3 months in a row of over a half a million jobs lost per month. This was after the “jobless recovery” from the tech recession. Per the Wall Street Journal link, Bush had the worse track record on jobs in history.
If tax cuts are so good for the economy, how come, after eight years and multiple rounds of tax cuts we had such anemic job growth and the worst recession since WWII?
Reality matters, and any economic theory needs to explain what really happened. I’ve not heard any theory on this blog that correlates with reality.
Expecto Opere!
Well, Chris, since you’re now Master of Economic Reality (and that airplane glue is powerful stuff), YOU explain how Bush “lost” the jobs (did he order companies at gun-point to fire workers) and how the magical Il Dufe “created” them. I’m sure we’re really interested in your explanation of how and why jobs are created and eliminated.
The UK went through all this thirty years ago with Margaret Thatcher bringing in the hard policies – against many economists who believed in perpetual motion economies. I suspect they will find the will to do so again, and Europe seems to have also learned that hard lesson from them.
This leaves the Obama administration somewhat high and dry, if they do not follow suit the US will effectively start partially subsidizing Europe (stimulus money trickles out and acts globally). Hence Obama’s attempts to encourage yet more debt funded stimulus (de-stimulus for short) from Europe, which is against their best interests but in the best interests of the US (acts to transfers debt from the US to Europe).
Europe’s moves back towards fiscal responsibility may force the Obama administration to reduce the deficit sooner than they had planned – this could cause some political distress.
Related to what Pete says, it’s good to keep in mind what Henry Hazlitt wrote about economics: that good economics is largely distinguishing between what is seen and unseen. So if the State extorts X number of dollars from the people who produced that wealth, and gives those dollars to those the State favors (whether subsidies to companies with effective lobbyists, handouts to welfare recipents in return for future votes, etc.), ther result may be an increase in jobs as the subsidized businesses rev up activities and the hand-out receivers run out and start buiying more. But what’s unseen is the how the people who had to pay for the subsidies and hand-outs now have less money to invest and spend, so jobs that would have been created aren’t.
Under the Bush administration, we had 3 months in a row of over a half a million jobs lost per month.
Wow. I mean… Wow. We are SO lucky to have someone better in charge. I’m glad the country is aware of it.
Correlation with reality!
Bush’s economic policies failed to create jobs, specifically:
1) Tax cuts for the wealthy don’t create jobs.
2) Encouraging outsourcing of work overseas doesn’t create jobs.
3) Not dealing with illegal immigration pushes wages down.
4) Allowing health care costs to spiral out of control makes it more costly to hire people.
5) Not making any effort at energy independence means jobs in that area are not created.
6) Deregulating finance allows an asset bubble to become a financial crisis, resulting in massive additional job losses.
If tax cuts are so good for the economy, how come, after eight years and multiple rounds of tax cuts we had such anemic job growth and the worst recession since WWII?
Remember that there was a big economic boom before that bust, the tax cuts did have a significant effect. Unfortunately, implied government guarantees (government interference through too big to fail) created a bubble on top of that boom. Also, those tax cuts were not balanced by expenditure cuts, the resultant debt burden eventually effectively becoming a tax upon the economy roughly equivalent in size to the original tax cuts (note public and private debt is somewhat fungible).
Well that is one over simplified possible explanation, I am sure others will come up with better ones.
Jim Moron: “In fact, in the last six months more jobs were created than Bush was able to generate in eight years”
Chris Moron: “The Wall Street Journal says that Bush created 375,000 jobs per year in office.
Obama created 431,000 jobs in May, on top of several other months of positive growth.”
Let’s see. So 375K jobs per year times 8 years is 3 million jobs…which is a lot more than 431 thousand jobs, and we don’t even need to point out that 90% or so of those 431 thousand jobs were temporary, government (and probably already gone) to demolish whatever point Chris thought he was making.
Come on, people, don’t let him get away with this BS.
Bush’s economic policies failed to create jobs, specifically:
Chris, maybe you mean Bush’s economic policies failed to create enough jobs. Earlier in this very thread you made a point out of Bush creating 325,000 jobs per year.
1) Tax cuts for the wealthy don’t create jobs.
Only the wealthy have the means to create jobs (or at least jobs that generate wealth as opposed to federal jobs that do nothing but consume wealth), and about half of all Americans pay no federal income tax. Which half of Americans do you think create any jobs at all? Are those the ones that need to be taxed even more?
The real issue is that tax cuts won’t work without associated cuts in spending. Bush’s administration failed to cut spending, and Obama falls in the same category of failing to cut spending.
2) Encouraging outsourcing of work overseas doesn’t create jobs.
Who or what is encouraging outsourcing of work overseas? Would federal tax law with regards to corporations have anything to do with that? The point of business is to make money, and if foreign tax law presents a more business-friendly environment then you have to accept the consequences. I have neither seen nor heard the current administration debate any changes in current policy, so they must be just fine with the status quo.
3) Not dealing with illegal immigration pushes wages down.
I guess it depends on what you believe “dealing with” means. How about finishing the fence? How about the federal government enforcing existing laws as they swore to do when they took their oath of office.
4) Allowing health care costs to spiral out of control makes it more costly to hire people.
Interesting choice of the word “allowing” here. That seems to imply once again that the feds in all their regulatory splendor are part of the problem. As a businessman, if I can get a guaranteed payment from the federal government for a service, what incentive do I have to compete with pricing?
5) Not making any effort at energy independence means jobs in that area are not created.
You can’t be serious. ANWR drilling would be a big step towards energy independence. Not giving a couple of million acres of prime clean coal mining to a national park would be a big step towards energy independence. Nuclear power plants would be a big step towards energy independence. How many billions have been blown subsidizing ethanol and how many jobs has the ethanol industry created? How many foreign countries can no longer afford to by corn because of the price inflation that federal subsidies have imposed on corn? After all this effort, ethanol still requires more energy to make than it produces when used as a fuel. A businessman would cut his losses and move on to other ideas, but the federal government continues to throw billions at something that has morphed into nothing but a political football.
6) Deregulating finance allows an asset bubble to become a financial crisis, resulting in massive additional job losses.
The roots of the current financial crisis go far deeper than the GWB administration. Here’s an idea…instead of throwing another 2000 pages of regulations on the industry, why don’t they simply repeal the existing laws or deregulation efforts that didn’t produce the promised or expected results.
FWIW, he only fools himself, and there’s no real way to stop that.
At the moment, capital is sidelined waiting for the Unicorn Prince to finish changing the rules of the game. One would not expect to see genuine reinvestment until after 2010 or 2012. Even so, if we’re really recapitulating 1857/1929 (can’t rule that out yet based on today’s valuations), genuine growth won’t occur until after the next Post-War era. I’ve pointed to Generational Dynamics here enough for my tastes.
Rick C. – creating 431K in one month is more than 375K in one year. Is that BS?
“creating 431K in one month is more than 375K in one year.”
Still waiting to hear how “the Unicorn Prince” (good one, Titus) did that.
Obama did that with the economic stimulus package. If half of the damned thing hadn’t been tax cuts, it might have created more jobs.
Geez, Gerrib really is being dumb today. 431,000 jobs in one month? 390,000 of which were government civil servants, which includes the hiring of 411,000 temporary census worker. So, if you exclude the 411,000 census workers, who probably won’t last more than a few months, maybe half a year; the government lost 21,000 jobs in May (not a bad start in my book).
And meanwhile, the private sector went from a job growth in April of 218,000 new jobs to 41,000 new jobs in May. Perhaps Gerrib can save some credibility and explain to us exactly what President G.W. Bush did in May 2010 to cause the reduction in growth?
Chris, it is very simple. Compare apples to apples: (from http://www.bls.gov/data/)
Bush created, on average, 135K non-farm jobs per year. In 1/2001, non-farm jobs was 132,469,000. On 1/2009, non-farm jobs was 133,549,000. Divide by 8 years, get the 135K.
Obama lost, on average, 2,128,000 non-farm jobs per year. In 1/2009, non-farm jobs was 133,549,000. On 5/2010, non-farm jobs was 130,570,000. Divide by 1.4 years, get the 2,128,000.
You are comparing only the peak rate, and that peak was caused only by temporary census jobs that had nothing to do with Obama anyway. Bush’s peak rates were in 3/2004 (338K jobs), 5/2004 (310K jobs), 10/2004 (351k jobs), 4/2005 (360k jobs), 7/2005 (369k jobs), and 11/2005 (334k jobs). All that done with no stimulus and no census workers!
Obama completely sucks by this metric. Stop using it.
Obama also has the legacy of being the president to power through ceiling to have government employment out-number private employment for the first time in the history of this country.
According to the latest BLS report, as of May 2010:
Total Private employment: 107,602,000
Total Government employment: 22,968,000
the job market has consistently shrunk under Obama’s guidance
According to the same BLS report, the economy added jobs in November of 2009 and every month (so far) of 2010.
All that done with no stimulus and no census workers!
Bush sold his 2001 and 2003 tax cuts as stimulus measures.
I have a few friends who were Census workers in April and May (but as Census Workers). The sloughing off of those jobs is already well underway, and they’re back to being unemployed, and have been most of the month of June. Their respective private-sector industries are still in a holding pattern with regards to hiring, and show little sign of movement.
My mistake, it was government out-numbering private employment in *unionized* employ.
With all of these “new jobs”, it’s nice to see that at least we still have double-digit unemployment. That must be why they’re no longer reporting “created or saved”, since they’ve figured out a way to create jobs (Census workers), but have no way to actually save jobs any more…
The peak employed of 146,483K occurred in Nov 2007. The low of 137,792K occurred in Dec 2009, and employment has increased to 139,455K in Apr 2010 before declining by 35K in May 2010.
The largest drop occurred in Mar 2009 with a decline of 833K. Only two months (48K in Apr and 139K in Nov) in 2009 recorded gains in the employed. Overall the year 2009 recorded a decrease of 5,396K employed.
Chris: How do tax cuts prevent job creation?
Chris: How do tax cuts prevent job creation?
Yes, I’ve never heard an economically literate answer to that question from these people.
According to the same BLS report, the economy added jobs in November of 2009 and every month (so far) of 2010.
Well, give Jim credit for honesty.
“Obama did that with the economic stimulus package. If half of the damned thing hadn’t been tax cuts, it might have created more jobs.”
Want to take us through the cause-and-effect of that scenario, Captain Syllogism?
Suppose you have a magic test that can tell what organizations do the best at creating jobs and adding wealth to the system?
Would you apply that test and give the winners stimulus $$ to apply to the economy…
The profitability of a small company is a pretty good stand in for the magic test. A company is not profitable unless they can provide a service or product that customers want at a cost that they will voulentarily pay. The process of doing this over and over creates jobs and adds wealth to the society.
Yet a profitable small business pays the highest possible tax rates in the current U.s. system. Its almost if they are deliberatly trying to destroy things.
It seems pretty clear at this point that CG hasn’t Clue One about how jobs are created, in the private sector or why. He reminds me of something a friend of mine said about “liberals.” He described them as “idiots who are always talking about giving poor people ‘a bigger slice of the pie” without having the slightest idea how the pie is created in the first place.”
Watch it, Paul. “Profit” is a dirty word to Gerrib and Jim. A profit means a company is enriching itself, and in that case, there is a zero sum game, so someone must be losing money. Therefore, we must redistribute wealth.
However, if the government spends money, that’s not zero sum to them. Somehow, the government spending money brings back a greater return of growth in the economy and everyone is richer. I suppose this is based on some belief that so long as the government prints money, then it’s not zero sum.
“Obama created 431,000 jobs in May, on top of several other months of positive growth.”
Check out the original report.
http://www.bls.gov/ces/highlights052010.pdf
In particular, note page 2. The bar chart shows that 390,000 of those jobs were in government. As for the “on top of other months of positive growth,” non-negative is positive. But it certainly isn’t big.
Going back through the historical BLS statistics is eye-opening, btw. In 2001, for example, we lost 1.7 million jobs, then more than got them all back in 2002. But the growth in the 1990s was most impressive.
I have collected twenty years of monthly unemployment data and put them in a google docs spreadsheet.
Click on my name to see it.
I will give credit where that credit is due.
The last 6 years of Reagan, part of Bush 41, and most notably, the better part of the 8 years of Bill Clinton had vigorous job growth. I used to drive to work first past a sign giving the Dow Jones Industrial Average followed by a sign of the current gas price at a filling station and joke about how Mr. Clinton’s popularity numbers were reported (favorably) on those two signs.
Tax rates went down, they went up, they went down. But the real engine driving all of this had been low oil prices. Oil and other energy prices may only be a small slice of GDP, and yes, owing to conservation, energy efficiency, and general improvements in technology, the amount of oil needed per unit constant-dollar GDP has gone down.
But as they say, all economic decisions are made “on the margin”, and the marginal cost of oil is a biggy in terms of economic growth.
The one nut that Bush 43 was unable to crack was energy prices. They were already trending upwards under the last year or two of Mr. Clinton, and they continued their upward climb over the next 8 years.
The upward climb in oil and energy prices were probably the combined effects of 1) an inflationary effect of the Greenspan monetary policy, 2) the constant state of war in the Middle East (Iraq, Afghanistan, the Israeli Lebanon and Gaza wars, and 3) the ascendency of India and China as economic powers and energy consumers.
Now I don’t know, there is a bunch of conspiracy minded thinking over at The Oil Drum why oil was so cheap for so long if Peak Oil is so imminent. One theory is that the Saudis were manipulating oil prices to a political purpose, and now they have peaked (Twilight in the Desert and all of that) and can no longer do that. Another theory is that horizontal drilling was a paradigm shift that made oil abundant for a while, but the known oil reservoirs got drawn down to depletion even faster. Yet another theory is that the oil companies are cautious about another round of investment and another oil glut — fool me once, shame on you, fool me twice, shame on me.
For the world economy to get kick started, there has to be another crash in oil prices, and that hasn’t happened yet or maybe will never happen, and then we are hosed.
But the Real McCoy New Deal built hydroelectric plants and the TVA. The Bargain Basement New Deal is dabling in “Cap and Trade” and heavy federal subsidies to “alternative” energy sources that plain don’t work on the scale needed.
Maybe we are at Peak Oil and we are so hosed because the bad economic times are going to get worse until we radically rethink the direction of our industrial economy in the world, and maybe we can don sackcloth and cover ourselves with ashes on how Bush 43 (and Clinton, and Bush 41, and Reagan) did nothing about the energy crisis.
But the fact of the matter is that Mr. Obama’s team and the “Green Jobs” initiative, let’s just say that if Peak Oil is really here, we are just so hosed . . .
government jobs: 390,000 Source of income? Taxes.
private sector: 41,000 Source of income? Consumers.
Where do taxes come from? Consumers collected by private sector.
This explains why government jobs reduce private sector jobs.
Eliminate enough of the private sector and the government job shell game comes to a grinding halt and America is bankrupt.
Printing money just makes it happen faster.
The 390,000 government jobs created in May were mostly temporary workers for the Census. They all go away in August.
I let that liberal rag The Wall Street Journal calculate job growth by President. Please argue with them about methodology.
Profits are good, but tax cuts do not automatically result in new jobs. In a lot of cases, the marginal tax savings does not cover the cost of a new employee. In general, businesses do not hire employees until they have enough new business to support the cost of the employee.
Tax cuts result in at best a one-to-one multiplier – $1 of tax cut = $1 of economic growth. Government spending results in a multiplier of more like $2 or $3 to $1 – $1 of government spending results in $2 or $3 of economic growth.
BTW, nobody is saying that this is sustainable long-term. It’s not. But part of getting out of hole is keeping the hole as shallow as possible, and that’s what the stimulus is supposed to do.
This explains why government jobs reduce private sector jobs.
By that simplistic logic, reducing government jobs should create private sector jobs. But in 2009, as public employment fell (due to large state and local job cuts, only partly offset by federal stimulus spending), private employment fell even faster.
It isn’t that simple.
President Obama is THE WORST President at job creation evar! Since he was elected we have lost 4.4 million jobs which even surpasses Herbert Hoover. Since the recovery act was passed private sector jobs have fallen by 2.65 million while the public workforce has grown by 400,000 jobs. If you include the discouraged workers our unemployment is up in the 15% territory. Even Joe “Bite My Smartass” himself has admitted that the stimulus has failed and that the millions of dollars and jobs that were lost since the “Great Recession” started are gone for good and will never come back. Anybody can cherry pick a month and then project a line on a chart that will climb off into the stratosphere. Look at the bottom line, the big picture, and you will see that none of this good and none of this sustainable.
We already have one of the highest progressive tax structures of any developed country. We have one of the highest capital gains tax rates of any developed country. The rich are already paying more than their fair share in taxes and pushing them even higher is not going to solve anything. The German Chancellor Merkel is looking at Obama at the G8 like he is an idiot that knows absolutely nothing. It’s a sad day when the Europeans are the ones looking like the fiscal conservatives. Everyone else in the world is figuring out that the Kenyesian economics is a dead end. It just doesn’t work! Yet, Obama is too ignorant, narcissistic, and manipulated to even comprehend and figure it out. Holy Cow I can’t wait to vote these idiots out of office!
Tax cuts result in at best a one-to-one multiplier – $1 of tax cut = $1 of economic growth. Government spending results in a multiplier of more like $2 or $3 to $1 – $1 of government spending results in $2 or $3 of economic growth.
Well that explains where you are going wrong, you took the inverse here by mistake
To further complicate matters, the market actually sets stimulus in the economy, not the government (in spite of their pretending otherwise) – it is fungible. Private companies dip into their reserves to overcome short term down turns to the extent such stimulus makes economic sense. This is normal business practice, but beyond this they have to adapt, cut costs and reduce debt to meet the new market conditions.
Unfortunately the government was deaf to this market signal and is still trying to do the opposite and “stimulate” the economy through borrowing – this is making matters much worse. Not only is the private sector having to reduce costs and debt but they are having to do it while government is pulling in the opposite direction. It is total expenditure and debt that the market demands has to be reduced here – private and public. The more the government borrows and spends the more the private sector has to save and cost cut. This is getting difficult to do and is completely killing the private sector and economic growth.
Just look at the economy as a black box including both private and public economies. The more wealth it creates the more it grows, the more wealth it absorbs the more it shrinks. The government is currently absorbing wealth faster than the private sector can create it, and living standards are dropping.
I should further add that reregulation is not deregulation, the financial crisis was largely caused by government interference – for example, implied government guarantees (too big to fail). Replacing public monopolies with private monopolies is not deregulation. The more they interfere the more unbalanced the market becomes and the more they have to interfere to maintain market balance – a vicious circle that eventually destroys the economy.
“Tax cuts result in at best a one-to-one multiplier – $1 of tax cut = $1 of economic growth. Government spending results in a multiplier of more like $2 or $3 to $1 – $1 of government spending results in $2 or $3 of economic growth.”
If there was the slightest measure of truth to this statement, the USSR would have been an economic juggernaut. They have far more resources, far less concern over how exactly those resources might be extracted, and the foresight to make all the money go through government.
To bad it’s dumber than the usual. Where the hell are kids educated these days anyway?
“But in 2009, as public employment fell (due to large state and local job cuts, only partly offset by federal stimulus spending), private employment fell even faster.”
That’s odd. The Bureau of Labor Statistics figures for state and local government (http://data.bls.gov/PDQ/servlet/SurveyOutputServlet) don’t show any appreciable drop in employment in 2009.
But who are you going to believe, the BLS or Jim?
Did I call it or what:
Tax cuts result in at best a one-to-one multiplier – $1 of tax cut = $1 of economic growth. Government spending results in a multiplier of more like $2 or $3 to $1 – $1 of government spending results in $2 or $3 of economic growth.
So, tax cuts is zero sum gain in which $1 in tax cuts equals $1 of economic growth, but government taxing a $1 supposedly ends up as much as $3. Of course, nothing to actually back up the 3:1 claim in rate of return for taxpayer dollars. Just an assertion that the government is better than free markets. This from the same guy crowing that 411,000 temporary summer jobs means the economy has turned around (and we will have to wait until October to hear the surprise that it is the GOP’s fault). Certainly, the larger markets disagree with his assessment. So does all the nations in the G8, except for Gerrib’s hero Obama.
Representative-For-Life Moran’s district has one of the highest concentrations of government- and government contractor-employed people, so naturally he sees the economy as improving.
You know I was just thinking how it boggles my mind that the same people who worry so much about what happens to us in 100 years as a result of global warming are so quick to shrug off the fact that our current economic path is a road to ruin. The disconnect between solving one without the other is just perplexing to say the least.
Tax cuts result in at best a one-to-one multiplier – $1 of tax cut = $1 of economic growth. Government spending results in a multiplier of more like $2 or $3 to $1 – $1 of government spending results in $2 or $3 of economic growth.
I see that many have commented on this, but I think we need to be more explicit. The multiplier, whatever it is, is a red herring. Plus you are wrong. The multiplier effect comes from the fact that a dollar spent, is spent again by the one receiving it. A saved tax dollar has exactly the same multiplier potential as a dollar spent by the government. That’s not the issue.
The issue is the efficiency of the dollar spent. In this regard, government can NEVER, EVER have the knowledge needed to spend dollars as efficiently as the distributed knowledge of millions of taxpayers. Government spending always results in surpluses and deficiencies that are the definition of inefficiency. Food rotting on docks during a famine being a classic example, but the list of examples is unlimited.