Change in Total Private Employment (in thousands), Source: U.S. Bureau of Labor Statistics
Update: Click here for the most recent jobs statistics.
On the first Friday of every month, I update the unemployment numbers so that I can compare the unemployment rate under President George W. Bush with the unemployment rate under President Obama at that time. The genesis of this ritual began when I felt compelled to respond to some left-leaning sites that were comparing Obama’s first two years and four months in office with Bush’s last and worst economic year (the above chart shows the most recent incarnation of this narrative).
In May, the private sector added a paltry 82,000 jobs in the twenty-seventh consecutive month of private sector job growth. This development is somewhat negative news. The country had a net employment gain of only 69,000 total jobs (private and public). Unfortunately, 69,000 is below the 125,000 jobs needed each month just to keep pace with the growth of the working-age population, which is discouraging news.
More importantly, May is the fifth month in which the overall number of jobs lost/gained during the Obama administration is better than the number lost during the Bush administration. It is also the second month since the number of net private sector jobs gained during the Obama administration turned positive. That said, the unemployment rate is still 0.9 percentage points worse today than it was during President Bush’s last full month in office, and it is 0.4 percentage points worse than when President Obama first entered office. In other words, the unemployment rate in all 41 months of Obama’s presidency has been higher than that of any single month in President Bush’s 8 years in office.
The seasonally adjusted unemployment rate rose from 8.1% to 8.2% — the third lowest month of unemployment during the Obama presidency. This number remains 0.9 percentage points higher than President Bush’s last full month in office in December 2008. It also marks 40 consecutive months in which the unemployment rate has been 8% or higher in the 41st month of the Obama presidency.
Unemployment Rate, Source: U.S. Bureau of Labor Statistics
That said, the unemployment rate only accounts for the percentage of the unemployed who are actively seeking employment. It does not include people who have given up on finding jobs. The month ended with more people employed at the end of May than were employed at the end of April, and the civilian labor force increased faster than the number of new employees entering the work force increased. Therefore, the main reason the unemployment rate increased is that the denominator (the civilian labor force) in the unemployment equation increased more than the numerator (the number of employed Americans).
The civilian labor force ended May at 155.0 million vs. April’s 154.4 million. 142.3 million people had jobs in May, which was an increase of about 422,000 people from April versus about 642,000 people who entered the labor force.
Both the Bush and Obama presidencies have been marked by a steady decline in the labor force participation rate. The labor force participation rate measures the number of people in the labor force as a percentage of the total working-age population. The labor force participation rate increased by 0.2 percentage points from 63.6% in April to 63.8% in May as people entered the labor force.
Labor Force Participation Rate, Source: U.S. Bureau of Labor Statistics
Putting the Numbers into Perspective
The employment statistics during President Bush’s period in office continue to look better than those under President Obama’s to date if one puts more emphasis on the overall unemployment rate. However, President Obama’s employment statistics seem better if one looks at total private sector employment. Over President Bush’s tenure, the private sector lost a net 646,000 jobs, assuming that he gets credit for all jobs lost in January 2009 and none for those lost in January 2001. I changed my methodology in response to a left-leaning blogger‘s fair point “that CES estimates represent information reported by survey respondents for their pay periods that include the 12th of the month.” Hence, any subsequent numbers for jobs created near the end of January would likely appear in the February numbers.
If one attributes the first 19 days of January 2009’s job losses to Bush, and the remaining 11 days of job losses to Obama, the private sector shed 339,000 jobs during the Bush administration (the private sector gained a net 147,000 jobs if one attributes all of January 2009’s job numbers to Obama, and all of January 2001’s numbers to Bush). Surprisingly, this number includes the 3.78 million private sector jobs lost in 2008, and an additional 839,000 in 2009 (514,000 if one attributes the first 19 days of January 2009’s job losses to Bush).
Change in Total Private Employment (in thousands), Source: U.S. Bureau of Labor Statistics
In contrast, under President Obama’s administration, the private sector has gained a net 55,000 private sector jobs (a loss of 270,000 if one attributes the remaining 11 days of job losses in January 2009 to Obama, and a loss of 784,000 if one attributes all of January 2009’s losses to him).
Again, the point of this argument is not to assess blame on either administrations’ policy. It simply puts the numbers into perspective.
For each job the private sector cut under George W. Bush, the private sector gained~0.09 jobs under Barack Obama (if one attributes January 2009’s job losses to Obama, the private sector eliminated ~5 jobs for every job it created under Bush). The economy would need to destroy 701,000 private sector jobs for Bush to break even with Obama (not accounting for the 125,000 jobs that the economy must create each month just to keep pace with population growth).
While President Obama has surpassed President Bush on private sector job creation, the unemployment rate has remained persistently high. It will likely continue to remain so as more people enter the labor force as the economy improves, even if the private sector continues to add jobs at similar rates. The country still has a long way to go to restoring full employment and the President is running out of time. According to The New York Times, no sitting President since Franklin Roosevelt has won re-election when unemployment was over 7.2% on election day.
And President Obama is no FDR.
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You’ve been running this feature for a while, and I still think it makes no sense on a number of points. But, since you’re going to keep publishing it, here’s a sincere question (and one I don’t know the answer to): how does Romney’s time as governor turn out under this analysis? His camp is clearly using the same reasoning that liberals would use to rebut your post: http://2012.talkingpointsmemo.com/2012/06/romney-massachusetts-record-job-creation-47th-fehrnstrom.php
I’m not saying the situations are the same, I really have no idea. I’m just hoping you’ll do the research for me.
Maybe I can take a look this weekend. I know exactly where to find the data.
nick, How does it not make sense on a number of points? Which points?
This is one of the only few conservative sites that I can read continuously, so thanks for providing a blog that’s readable, entertaining, and informative.
I’d like to say it doesn’t seem fair to compare Obama to FDR, as FDR touted socialism as his biggest achievement. Obama can’t do the same thing.
Thanks for the kind words, Roi!
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So is Obama Jimmy Carter??? Who’s his parallel?
He’s definitely not Jimmy Carter. Jimmy Carter had lower unemployment rates.
A similar misery index I suspect, the sum of the inflation in the CPI and the reported unemployment rate. I suspect that labor participation was rising at that time as a lot of women were entering the work force.
That’s a good point. If you added inflation to Carter’s unemployment rate for a misery index proxy, I’m pretty confident it would look a lot worse than Obama’s version as inflation now is relatively low.
Please note the government counts inflation much differently these days than in Carter’s, and they are much more forgiving today.
Sean, how do you feel about Barack’s comment saying that the Private Sector is doing fine?
I feel like there are a few things I don’t understand in the graphs, so I’m wondering, even if the private sector isn’t doing great, if it’s on the right track.
Judging by the graphs and your commentary, I felt like Obama’s comments were well-made, ignoring public jobs. But maybe you can shed some light as to why it wasn’t.
Things aren’t going all that well in the private sector. Pay is down, job growth is positive but less than the replacement rate of 125k per month required just to keep up with population growth, and demand for goods is also down. Moreover, large companies like HP have recently announced large scale layoffs.
Big corporations have done quite well under President Obama, ~$2 Trillion in cash reserves made during the down turn. http://www.nytimes.com/2011/11/26/business/for-companies-the-good-old-days-are-now.html?_r=3&ref=business
So demand is down but the right keeps beating the supply side economics horse? The definition of insanity?
If you really want pay to increase maybe you should start championing for the unions: http://thinkprogress.org/politics/2011/03/03/147994/unions-income-inequality/?mobile=nc
“Big corporations have done quite well under President Obama, ~$2 Trillion in cash reserves made during the down turn.”
That doesn’t mean the private sector is doing well. The reason cash is piling up at corporations is that they have fewer profitable opportunities to pursue because of lackluster demand. When that happens, they cut jobs and return cash to shareholders. Moreover, about $1.5 trillion is sitting offshore. President Obama could initiate a cost-free stimulus by simply allowing US corporations to repatriate it in the US tax free. With 8.2% unemployment, the private sector clearly isn’t doing well.
“If you really want pay to increase maybe you should start championing for the unions:”
That’s about the worst thing we could do. Unions are one of the primary reasons companies leverage labor in emerging markets in the first place – they make unskilled American labor far too expensive to be globally competitive.
My Meritocratus vs. Egalitarius series explains and quantifies why unions are a bane to American capitalism: https://reflectionsofarationalrepublican.com/meritocratus-vs-egalitarius/
Yep, Your conservative alright. Tax the fixed income pension but leave the corporations alone. 30 of America.s largest and most profitable companies are right now paying 0 taxes and some are still seeing a tax return. Is that not, OH MY GOD! socialism. All I can say is, Where is Jesus at.
The reason they pay zero dollars in taxes is that a high corporate tax rate in the United States spurred them to move their operations overseas to countries with lower taxes. If the president lowered the corporate tax rate, maybe that might provide sufficient incentive for corporations to create jobs here.
Lastly, what does “Jesus” have to do with any of it? Is that supposed to be an argument?
Is that what Jesus is to you, an argument. I mention Jesus as I wish he would come back and fulfill his promise. Then all this vile will be put to rest once and for all time.
In the context of your comment, yes. And employing a reference to any religion in the unemployment debate is a bad argument. It has no bearing whatsoever on the debate.
Mr Haslett…. If you get some spare time google “The US dirty war on manufacturing” by Carl Pope from Bloomberg. Read all three sections, they are not long.
@Sean: Not worth reading Pope. Full of large holes in the one I read.
Between the years 2001 and 2008 or other wise under our conservative republican president George W Bush the United states lost 52 thousand manufacturing plants which resulted in the lost of 2.9 million factory jobs while running 4.3 trillion dollars in trade deficits. Why? Because a conservative controlled congress and a conservative president gave corporations tax cuts to off shore American jobs. While all this crap was going on the wealthiest 2% were seeing the lowest tax rates since before the last great depression. And to add more fuel to the flames George W Bush decided that he would make home ownership possible for many low income Americans with his home ownership challenge and we seen millions of new low wage or no wage people put into homes with mortgages that were sub-prime rate alt-rate mortgages with no money down and exploding interest rates a few years down the road. Throw in two unpaid for wars and this was the economy that Obama walked into. No one was going to fix that in 4 years or 4 hundred years. The damage caused was forever and no one was going to bring the dead back to life.
“No one was going to fix that in 4 years or 4 hundred years. The damage caused was forever and no one was going to bring the dead back to life.”
Really. I think review of your Economics 101 text from your college years is in order. Economy and Jobs and so forth are not like a human life which dies and never comes back to life. A better metaphor is that the economy is like a complex machine that run inefficiently and not produce outputs (goods/services, jobs, economic growth, etc.) when not taken care of or mantained with the right tools and providing the right inputs. Obama has used and is using the wrong tools and inputs (policies).
A strong and viberant middle class is always the main ingredient to any economy. It is a shame and a sham that so many of you conservatives cannot see that or some how forgotten it.
How does your last comment respond directly or even relate to my response (or even your original comment).
Anyway, the middle class is important for us conservatives too, and Obama’s policies are making the divide greater by moving people from middle class to the poor requiring government assistance.
Also regarding our initial comment about Bush allowing lending to non-credit worthy individuals, you need to get history and the facts correct.
It was Jimmy Carter’s administration in 1977 that passed the the Community Reinvestment Act (CRA) that allowed banks to lower standards and were pressured to do so by local liberal community groups pressure. This is when subprime lending began and when it was allowed. You think it was Bush.
But not everybody is fault free including Bush….
Later under the Clinton administration, the CRA was modified and then allowed the securitization of CRA-regulated loans containing subprime mortgages. These two acts of: 1) first allowing subprime loans and then 2) allowing them to be bundled and securtized along with good loans and traded on the open market that were the precursors to allow the housing bubble to form.
Then in 2000 under the Bush administration, the Commodity Futures Modernization Act of 2000 exempted derivatives (such as CDS) from close scrutiny, but was left up to the House Financial Services Committee to oversee FNMA and GNMA and all lending and financial services to ensure a stable and secure housing market. It was Barney Frank who was in control of the committee from 2006 through 2008 when action could have been taken to avert or largely lessen theimpact o the bubble bursting, and slowly unwind the impending housing financial calamity. He kept insisting everything was fine…and loudly insisting and shouting down people who raised the concern right up to the 2008 burst….even a few short months before the 2008 implosion, he was on record as stating all was fine. He is essentially incompetent.
It is important to note that this conservative believes that both the Bush and Obama administrations were progressive in nature. Both presidencies are among the worst of all presidencies among the 44 presidents. It is just a matter of degree with the Obama administration taking this nation and directing it onto even a worse course threatening this nation. Yes, his policies actually threaten this nation’s leadership and exceptionalism.
I think you could make a case for the current misery index being higher based on people’s perceptions about inflation.
While the % delta in the CPI has been small the last several years, specific items such as gasoline have at times been increasing pretty rapidly. Surveys I’ve seen regading what folks think inflation is doing shows they tend to focus on those items, sometimes known as ‘headline inflation’.
The perceived misery index would likely be higher than the value based on the actual government statistics, or so I suspect.
This isn’t directly related, but when it was mentioned the major increases in gasoline should be included in factoring the “Missery Index,” it spurred some feelings.
How can anyone justify the flucuations with gasoline. Up and down. Is it world affairs causing this. No, it Wall Street. Gasoline increasing and decreasing very rapidly isn’t necessarily caused by world situation changes. Its due to the flexibility wall street is given to speculate on oil futures.
Artificial markets are volatile; they’re difficult to predict and can turn on a dime. With millions and millions to speculate with, the barrel price is heavily affected. As a result of the artificial oil market, the average price per barrel of crude oil increased from $31.61 in July 2004 to $137.11 in July 2008 . The average cost for a gallon of regular unleaded gas in the United States grew from $1.93 to $4.09 over the same period . Combined with the increase of the margin an investor can in essence borrow to “gamble” on the crude oil futures market. Thes factors shouldn’t affect what I pay to fill up my car.
Certain commodities shouldn’t be traded. This alone could help tremendously in helping the economy recover. How much lower would goods produced prices be if gasoline was around the 2.25 area.
One thing you all are forgetting is that each prior President had a Congress that was willing to work with him. This President does NOT have a Congress that is willing to work with him and has made it their goal from day one NOT TO even at the expense of the American economy and its citizens. This is a fact, not hearsay. Even today the Republican controlled House has refused to pass the Transportation Bill that the Senate passed by 75%!!!!! THAT is where the problem lies. Not with the President. It is with Congress. Congress is where the decisions to pass or not pass bills lay, where they are written. The President can only ask or veto.
Time and time again the Democratic held Congress during the Bush admin. passed bills in order to fund an unnecessary war. A war that was NEVER paid for, NEVER put on a budget to be paid for. Taxes, in the first time in history, were LOWERED, not raised to pay for this debt.
“… each prior President had a Congress that was willing to work with him (the president).” You mean like the Democrats worked with George W. Bush when they controlled both houses of Congress? I don’t know what planet’s history you refer to but it’s not planet Earth. Our history is replete with uncooperative Congresses and the Democratic Congress when G. W. Bush was president is just one example. Moreover, the present House of Representatives, which is controlled by Republicans has actually made more attempts at working with the President than the Dems did under Bush. What you claim to be fact is in fact false. Should I mention that the House has sent a large number of bills (including jobs bills) to the Democrat controlled Senate, which the Senate has shelved. The House has also passed annual budgets while the Senate has not passed a budget in over 3 years! While I’m at it, I’ll throw in the President Obama’s budget, which the Senate voted down by 99 to 0. Not a single Democrat voted for it! Honest historians will describe President Obama as one of the most divisive presidents in history. His governing style is simple: My way or the highway.
Hey Mac, Repubilcans controlled both houses of Congress between 1994 through 2006. Now how is that the democrates slowed W in any way. There was not even as many filabusters as now.
A little pompise, are we??? Your being as vague as the individual your criticising. I do not doubt that the republican controlled House has quantitatively sent bills, but what has been attached to those bills. In a quality analysis, what have the been.
Here is a list:
See also: 2008 Congressional Record, Vol. 154, Page D845 , Resume of Congressional Activity
[edit] EnactedMain article: List of United States federal legislation#110th United States Congress
February 2, 2007 — House Page Board Revision Act of 2007, Pub.L. 110-2, 121 Stat. 4
May 25, 2007 — U.S. Troop Readiness, Veterans’ Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007, Pub.L. 110-28, 121 Stat. 112, including Title VIII: Fair Minimum Wage Act of 2007, 121 Stat. 188
June 14, 2007 — Preserving United States Attorney Independence Act of 2007, Pub.L. 110-34, 121 Stat. 224
July 26, 2007 — Foreign Investment and National Security Act of 2007, Pub.L. 110-49, 121 Stat. 246
August 3, 2007 — Implementing Recommendations of the 9/11 Commission Act of 2007, Pub.L. 110-53, 121 Stat. 266
August 5, 2007 — Protect America Act of 2007, Pub.L. 110-55, 121 Stat. 552
September 14, 2007 — Honest Leadership and Open Government Act, Pub.L. 110-81, 121 Stat. 735
November 8, 2007 — Water Resources Development Act of 2007, Pub.L. 110-114, 121 Stat. 1041 – Veto Overridden
December 19, 2007 — Energy Independence and Security Act of 2007, Pub.L. 110-140, 121 Stat. 1492
February 13, 2008 — Economic Stimulus Act of 2008, Pub.L. 110-185, 122 Stat. 613
May 21, 2008 — Genetic Information Nondiscrimination Act, Pub.L. 110-233, 122 Stat. 881
May 22, 2008 — Food and Energy Security Act of 2007 (2007 Farm Bill), Pub.L. 110-234, 122 Stat. 923 – Veto Overridden
June 30, 2008 — Supplemental Appropriations Act of 2008, Pub.L. 110-252, 122 Stat. 2323, including Title V: Post-9/11 Veterans Educational Assistance Act of 2008 (“G.I. Bill 2008”)
July 10, 2008 — FISA Amendments Act of 2008, Pub.L. 110-261, 122 Stat. 2436
July 29, 2008 — Tom Lantos Block Burmese JADE (Junta’s Anti-Democratic Efforts) Act of 2008, Pub.L. 110-286, 122 Stat. 2632
July 30, 2008 — Housing and Economic Recovery Act of 2008, Pub.L. 110-289, 122 Stat. 2654
House in Salinas, California under foreclosure, following the bursting of the U.S. real estate bubble.October 3, 2008 — Public Law 110-343 (Pub.L. 110-343), 122 Stat. 3765, including:
Div. A: Emergency Economic Stabilization Act of 2008, H.R. 1424;
Div. B: Energy Improvement and Extension Act of 2008; and
Div. C: Tax Extenders and Alternative Minimum Tax Relief Act of 2008
October 15, 2008 — Pub.L. 110-430: Setting the beginning of the first session of the 111th Congress and the date for counting Electoral College votes, 122 Stat. 4846
December 19, 2008 — Pub.L. 110-455: A Saxbe fix, reducing the compensation and other emoluments attached to the office of Secretary of State to that which was in effect on January 1, 2007: allowing Hillary Clinton to serve as Secretary of State despite the Emoluments Clause of the United States Constitution.
More information: Public Laws for the 110th Congress and Complete index of Public and Private Laws for 110th Congress at GPO
[edit] Proposed, but not enactedin (alphabetical order)
America’s Climate Security Act of 2007
Auto Industry Financing and Restructuring Act
Comprehensive Immigration Reform Act of 2007
Deceptive Practices and Voter Intimidation Prevention Act
District of Columbia House Voting Rights Act of 2007
Employee Free Choice Act
Employment Non-Discrimination Act
Executive Branch Reform Act of 2007
Family and Consumer Choice Act of 2007
Global Warming Pollution Reduction Act of 2007
Habeas Corpus Restoration Act of 2007
Iraq War De-Escalation Act of 2007
Local Law Enforcement Hate Crimes Prevention Act of 2007
Medicare Prescription Drug Price Negotiation Act of 2007
Personal Use of Marijuana by Responsible Adults Act of 2008
Public Safety Employer-Employee Cooperation Act of 2007
State Children’s Health Insurance Program
[edit] VetoedChildren’s Health Insurance Program Reauthorization Act of 2007 (SCHIP, H.R. 976)
Children’s Health Insurance Program Reauthorization Act of 2007 (SCHIP, H.R. 3963)
Departments of Labor, Health and Human Services, and Education, and Related Agencies Appropriations Act (H.R. 3043)
Stem Cell Research Enhancement Act of 2007 (S. 5)
Intelligence Authorization Act for Fiscal Year 2008 (S. 1943)
H.R. 1585: an earlier version of National Defense Authorization Act for Fiscal Year 2008
H.R. 1591: an earlier version of U.S. Troop Readiness, Veterans’ Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007
[edit] Treaties ratified110-1: Land-Based Sources Protocol to Cartagena Convention (September 25, 2008)
110-2: Singapore Treaty on the Law of Trademarks (December 7, 2007)
110-3: Tax Convention with Belgium (December 14, 2007)
110-4: International Convention for the Suppression of Acts of Nuclear Terrorism (September 25, 2008)
110-6: Amendment to Convention on Physical Protection of Nuclear Material (September 25, 2008)
110-8: Protocols of 2005 to the Convention concerning Safety of Maritime Navigation and to the Protocol concerning Safety of Fixed Platforms on the Continental Shelf (September 25, 2008)
110-9: Protocol of Amendments to Convention on International Hydrographic Organization (July 21, 2008)
110-11: Extradition Treaty with Romania and Protocol to the Treaty on Mutual Legal Assistance in Criminal Matters with Romania (September 23, 2008)
110-12: Extradition Treaty with Bulgaria and an Agreement on Certain Aspects of Mutual Legal Assistance in Criminal Matters with Bulgaria (September 23, 2008)
110-13: International Convention on Control of Harmful Anti-Fouling Systems on Ships, 2001 (September 26, 2008)
110-14: International Convention Against Doping in Sport (July 21, 2008)
110-15: Protocol Amending 1980 Tax Convention with Canada (September 23, 2008)
110-16: Amendments to the Constitution and Convention of the International Telecommunication Union (Geneva, 1992) (September 25, 2008)
110-17: Tax Convention with Iceland (September 23, 2008)
110-18: Tax Convention with Bulgaria with Proposed Protocol of Amendment (September 23, 2008)
110-20: Protocols to the North Atlantic Treaty of 1949 on Accession of Albania and Croatia (September 25, 2008)
[edit] Select committeesJoint Committee on Inaugural Ceremonies
House Select Committee on Energy Independence and Global Warming
House Select Committee on the Voting Irregularities of August 2, 2007
[edit] HearingsDismissal of U.S. attorneys controversy hearings – (House and Senate Judiciary Committees)
See also: Congressional hearing
Were was the criticising in any word of what I wrote. Point it out to me.
Thanks Mac, you are spot on. These idiot Dems constantly refer to the “Do Nothing” congress, which of course they mean Republicans in the House. But if fact, over 350 bills have passed the House, 98% with bi-partisan support, over 200 with unanimous support, another 100 with 75% Democrat support, and these bills have benn shelved by Harry Reid. THERE is the “Do Nothing” congress.The biggest obstructionist is Obama’s best friend Harry Reid.
Wonder why Sean didn’t respond to this comment?
Which comment? I’d have to agree that the Republicans have been fairly uncooperative under Obama and the Democrats were equally uncooperative under Bush. I distinctly remember Senator Reid declaring that the Iraq War “was lost” right before Bush turned it around.
Sean, please explain what you mean by “right before Bush turned it around.”
The surge was so successful in turning the Iraq War around that President Obama appointed its chief architect (General David Petraeus) to led a second surge in Afghanistan.
Bush turned what around in Iraq? The so called oil that we were told would pay for the war. I hear now Iraq is getting very friendly with Iran. Say, where were those weapons of mass destruction?
Sorry to be so harsh, but don’t apply for a research job as you have made a number of mistakes with your comparisons.
I have no problem with your being harsh so long as you have evidence to support your assertion. What mistakes have I made? Please be specific.
Bob,
I guess you didn’t have any evidence to support your assertion after all.
Nice try.
Good blog. I appreciate your attempt to be fair, that’s rare these days. Why start in February of the year the president’s term starts? It takes several months to get new policies passed and then we all know that they work with a lag. To be fair, I would say you have to give a new president at least 1 year before trying to assess the results of their policies.
“Why start in February of the year the president’s term starts? It takes several months to get new policies passed and then we all know that they work with a lag. To be fair, I would say you have to give a new president at least 1 year before trying to assess the results of their policies.”
This specific comment comes up so often in response to this post that I can nearly always identify whether the requestor is a conservative or liberal. Th reason I use February as a starting point is that it is the clearest and least subjective one. If I arbitrarily chose to start with some other date, I would inject subjectivity into the process. I’d rather be clear about my methodology and let folks debate the rest.
Good point.
Agreed. Good point. Not injecting subjectivity is correct.
Also with regard to “… and let folks debate the rest.”:…
@Adenovir: Even if we use your subjective time lag of several months to put a policy into law and perhaps an added one year lag after the policy is passed through the legislative process to see its effects, we should see much, much more positive results by now certainly….after 3 years, 7 months. The Obamam administration got everything they wanted when both Senate and House were under Dem. control during his first two years in office and passed through whatever he wanted (or had the ability to do so). These polices were now in effect for over 1.5 years minimally.
Recall President Obama’s behemoth $787B stimulus package, the American Recovery and Investment Act of 2009, was passed by Congress essentially within weeks of his inauguration. It was passed on February 13, 2009 and signed into law by the President four days later. Let’s see and calculate the time lag….Feb. 17th 2009 plus the subjective one year time lag brings us to Feb. 17th 2010. We are now 2.5 years PAST this subjective lag time. A recovery by Keynesian spending increases has yet again proved an abject failure….and its meager effects on the economy are wearing off.
The bottom line is that the federal, state, county and local governments are too large a share of the GDP produced by the private sector. Government spending represents essentially a cost to a nation’s income and balance sheets. The US Federal government alone is north of 25% of total US GDP in 2011, which is the last year for which we have numbers. This percentage has steadily increased at an alarming rate under the Obama Administration through 2011. We will be able to see on September 30th what that percentage is for fiscal year 2012.
I purport that we function best as a nation when the Federal gov’t is at least below 20% or so of the GDP…or at least within a percent or two percentage points at most of 20%. Many fiscally responsible states and local city governments have cut spending as they are either required to balance their budgets or are forced to be fiscally responsible by their creditors. Those states and local city government officials will or are starting to file for bankruptcy, who have borrowed beyond their means to repay their creditors/bond holders and/or unable to maintain their generous pension funds or generous current city worker pay packages. Yes, some cities cannot even continue to pay for Current services provided by their employees (mostly police and fire and other city workers) to their residents because of their mismanagement of budgetary growth on all fronts.
Let’s not end repeating history and ending up in the same situation that Greece is facing now.
I haven’t looked at these charts in a while, but I was surprised how clearly the graph on Obama’s private sector job creation shows a dramatic and steady turnaround from the last year of Bush, which looks like the US is falling off a cliff. A pure numbers person would probably conclude that Obama’s policies are working, albeit slowly. The unemployment rate numbers are a foggier, because about .5% of the unemployment rate is directly attributable to cuts in pubic sector jobs, which seems to be conservatives’ favorite economic strategy. It’s clear that the unemployment rate would be well below 8% if government weren’t shrinking and everyone recognized that private AND public sector jobs contribute to employment numbers. So, here’s your policy question: should we stop shrinking the size of government in order to preserve jobs and achieve a lower unemployment rate; or, should we keep cutting public sector jobs and just accept higher unemployment rates as a good thing?
sean says: The reason they pay zero dollars in taxes is that a high corporate tax rate in the United States spurred them to move their operations overseas to countries with lower taxes. If the president lowered the corporate tax rate, maybe that might provide sufficient incentive for corporations to create jobs here.”
Dream on if you think any corporation that has divested and gone overseas ……..or partially moved operations there to take advantage of lower taxes…………..will suddenly get patriotic and bring jobs back here, or throw away their loopholes so they can start paying higher rates again……..The corporate tax rate isn’t even at a fixed level. It fluctuates anywhere between 15-35% depending on that company’s situation”……and they all try to make their “situation” as peachy as possible. You are blinded by your naivety which I can only assume is due to your youth. I almost choked on my drink when I read your repsonse.
Greed is what rules ……..so why would any coporation who games the system to pay zero taxes ….jump at the chance to suddenly pay 15% or 20% ? Because they love America?……. I say zero loopholes and the closing of OPIC…( not OPEC)…………..which was created during the Nixon adminstration to “assist” and “insure” any company (with tax payer dollars) to gain “footholds in emerging markets”……….aka……we will insure your risk if you want to build a factory in bumfuck Zambia……..and the wacko dictator there is too crazy or corrupt.
If you look at the data……after OPIC’s creation in 1969-1971 (during a Republican adminstration). . American corporations started to test the waters for moving overseas ……..the idea that their losses or risk would now be covered by the United States government made it a safe bet……………….so much for capitalism. …………….crazy isn’t it ? Here these capitalists…………used a government created agency ( socialism?)( funded by the US tax payer) to insure them ……so they could take advantage of cheap labor overseas……………..the hell with the united states. OPIC in later years has also joined with the IMF and world bank and others to help finance foreign businesses that DIRECTLY compete with American companies…….and or…. if those companies were …..lets say… building headlights for Ford…….at one third the cost they were being made in America……even better according to OPIC…..
Sean, did you ever learn about OPIC in any ecnomics classes? …I would lay odds you didn’t………. And don’t bother reading their dreamy mission statement at their website as its a carefully created smokescreen. Ron Paul has been the ONLY politician I have ever heard that has directly exposed OPIC for what it is…And I am in no way a a Ron Paul fan…..
This country did quite well even when the corporate rates were higher…I don’t think we should return to those rates……..but we should remove all loopholes and credits for moving businesses overseas……and most of all………..close down OPIC.
“Dream on if you think any corporation that has divested and gone overseas ……..or partially moved operations there to take advantage of lower taxes…………..will suddenly get patriotic and bring jobs back here, or throw away their loopholes so they can start paying higher rates again……..The corporate tax rate isn’t even at a fixed level. It fluctuates anywhere between 15-35% depending on that company’s situation”……and they all try to make their “situation” as peachy as possible. You are blinded by your naivety which I can only assume is due to your youth. I almost choked on my drink when I read your repsonse.”
Is there an argument hiding somewhere in here or am I supposed to accept your assertion as declarative fact?
If a corporation calculates it would be more profitable to create jobs in the US rather than overseas, they will do it if it is profitable. Period. End of discussion. It’s that simple. IF government creates a system in which such an allocation is more profitable than elsewhere, everyone wins.
“Greed is what rules ……..so why would any coporation who games the system to pay zero taxes ….jump at the chance to suddenly pay 15% or 20% ?”
So we agree. Companies will do what is most profitable. I never set a limit at 15 or 20% taxes, you did. Nor do all corporations or even most of them pay zero taxes. The outcomes are not this binary or simplistic. “I almost choked on my drink when I read your repsonse.”
“This country did quite well even when the corporate rates were higher…I don’t think we should return to those rates……..but we should remove all loopholes and credits for moving businesses overseas……and most of all………..close down OPIC.”
While I cannot speak for OPIC, I do agree with you regarding closing loopholes and simplifying the tax code. I’m sure most corporations would agree with us as well.
Please remove the rose colored spectacles, and just take a look at U6. We are in trouble and going nowhere fast.
My comment dated Wed., August 15th, 2012 01:23 was directed @Chuck McCormack’s post dated Tuesday, July 17, 2012 at 13:04
@Chuck McCormack:
Regarding:
“So, here’s your policy question: should we stop shrinking the size of government in order to preserve jobs and achieve a lower unemployment rate; or, should we keep cutting public sector jobs and just accept higher unemployment rates as a good thing?”
You offer what is called a false choice in your either/or question. We should keep cutting public sector jobs, period. Just because we cut public sector jobs does not mean there will be a commensurate increase in the unemployment rate as your question clearly connotes because of the way you pose the question.
We should cut public sector jobs, renegotiate and lower any public sector (generous) pay and pension packages (ad there are many of these), and other cost cutting measures, and at the same time take other action steps to grow the economy to increase private sector employment so the unemployment rate decreases IN SPITE of the public sector loss of jobs in the work force. We then would be putting the economy on a stronger footing with jobs that actually add to the nation’s real GDP (private sector jobs) rather than jobs that essentially end up being a cost component or drag on the economy (public sector jobs).
I want to add a little something here. First of all I do not support bigger government. I think the government interferes way to much in our personal lives. But I think we are forgetting the human factor when we emphasis cutting public sector jobs to save money rather than emphasizing cutting the waste, and mismanagement that permeates government bureaucracies. Many of those individuals employed by the public sector are providing a necessary service and are not all that well paid considering the job that they do. The next time you have to wait in line at the DMV because there are only two people working, or you have to wait three hours for a cop to respond to a traffic accident you are involved in, or no one is there to round up the stray dogs roaming your neighborhood, or your neighborhood pool closes because there is no life guard, remember this is the result of cutting public sector jobs. Every public sector job that is lost represents a person who may no longer be able to pay his mortgage, or feed his family. These people then turn to public assistance where they are still taking taxpayer dollars, but are now just soaking up funds rather than providing a service in return.
@middleagedhousewife:
I find it interesting that every public secotr job that you mention is provided by our LOCAL governments. LOCAL governements are not the issue for the most part although there are a bunch of local city governments controlled liberal spendthrifts who have ruined those cities and caused to fle for bankruptcy with all the commensurate side effects that you talk about.
This thread is Bush vs. Obama. That is, FEDERAL government. The FEDERAL government is the BIG problem here (along with some states who have been in the control of spendthrift DEms and Repubs. for a decade or two like California and Illinois).
We can and should eliminate the FEDERAL government jobs as part of the solution, that is, shrink the FEDERAL government.
The other part of solution is to address all the third rails of politics and bring entitlements either under control by either reducing them or phase them out completely (such as Social Security, Medicare, Medicaid, Welfare, Food Stamps, Subsidies for Farmers/Oil/UNameTheIndustry, etc., etc. , etc.). Yet another third part of the solution is to significantly ease the federal regulations and rules to unleash the private sector. I am not saying reduce all regulations, but if you ever owned a private business especially in a highly regulated industry, you really understand the ridiculous regulations that can easily be curtailed. However, this whole paragraph is really off topic so please no further comment on this last paragraph.
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According to the OFFICIAL government numbers we now have about 10,000,000 more people unemployed today than exactly 4 years ago today. In addition to this, we also now have about an additional 17,000,000 who have “retired” (either by design or out of necessity and desperation to tap their 401k) and 15,000,000 more people getting food stamps, We also have 2,000,000 LESS people in the work force than 4 years ago — and this is in spite of the fact that our population has increased by 10,000,000 people since 2008. IF the REAL unemployment rate was quoted by the media, our current rate would be FAR closer to the rate of the Great Depression than to the 5% rate of the Bush presidency.
For this government data all in one spot, check out www dot usdebtclock dot org
It is refreshing to read a republican perspective that is not filled with emotional rationalization of why Obama has been the “worst president.” Sites like yours make honest dialogue possible. (Disclaimer: I’m not a huge fan of blogs, and can’t name rational liberal blogger. Just looking for reasonable responses to Obama campaign/DNC stance as I watch the RNC convention.)
Sistadavis,
Thanks for stopping by. I try to do my best, but sometimes fall short of the mark. Here’s to hoping that I don’t disappoint!
Jobs are only created when companies have enough revenue and demand to make hiring possible. Tax breaks, as we have learned, do not “trickle down” and higher taxes only force jobs out of the country. What may not be taken into account in these figures, however, are external forces on the local level. When the cost of living requires more than half of a worker’s income to keep a roof over his head before otherwise providing for his family, and when businesses that lease space suffer increases in their rents, people will spend less on products and services that are non-essential to survival, and businesses will not have enough margin to hire new employees. Thus there is no hope for recovery. The greed in the real estate market needs to be abated somehow in order to allow for greater spending in the public sector and greater growth in the business sector.
The highest unemployment coincides with the years of a Democrat-controlled Congress under either administration.
Wow! Glad to find this website but surprised it has been inactive over the past 30 days with so much rhetoric in the news regarding unemployment. I was searching for some facts on unemployment figures during the Bush years because it has been hard for me to believe that this recent 7.8% number has been touted as such a pivotal number in this presidential race. My perspective is probably different than many other readers since I am nearly 60 years old and retired from the military (1973-1993). I have earned my college degree and also have been a member of the UAW. I have retired from the military, an auto company, and am working on my third retirement income source to supplement social security. By the grace of God, I have never been on unemployment. My father was a member of the United Steel Workers union when I was a child in the 1950’s and he was also a small business owner for a majority of his life. I am against big government and believe that the original design of our government is the best in the world. I have seen many countries and while many of them are both incredible to see and have wonderful people, nothing compares to the opportunity that exists in our democracy. That being said I also have to agree with the comment that “greed” is the greatest immoral enemy of our economy. I have to also say that Jesus does have a lot to do with unemployment and prosperity of a country. Most people will never understand nor believe that because they haven’t ever sincerely studied the Bible. If our country would truly repent and focus on morality along with working together to reconstruct our country then God would give us success. Morality is what truly determines the success or decline of a civilization.
Having spent a life time in high tech mfg I read a lot of charts…It’s seems to me that you, or others that prompted you, attribute unemployment to Obama the day he took office. That’s a little absurd. No president’s policy changes take place the day he steps into the oval office. Policy changes to counteract any recession, let alone this, the most severe since the depression, take years to have an effect. The graph is fairly self explanatory and shows a change from 829K losses at the end of the Bush administration to gains of 141K in April ’10 and increasing. That’a a turnaround of 970K jobs to the positive. I would say that is a fairly good case of the first step which is “stopping the bleeding”. Don’t get me wrong, I am over 50 and was one of the “long term unemployed”. I have a part time to full time position that only pays a little over 1/2 of what I made in the past. So I of all people understand the effects of this economy very well. Personally, I believe private industry should be leading us out of this recession. I see very few major corporations making the move to return jobs to the US. Thanks for the info though, Mark
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