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The public policy blog of the American Enterprise Institute

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Discussion: (36 comments)

  1. Seattle Sam

    4% less of the population is working today than ten years ago. Irrespective of why this is, it’s pretty hard to have a vibrant economy when the ratio of producers to consumers is falling.

    1. SmallBizGuy

      These are profoundly disturbing conclusions, which make sense. However, this is not the new norm. This is the result of a completely incompetent and arrogant president following the complete destruction of our credit markets by Wallstreet. America will recover, it will just take few more years.

    2. Commonsense

      All part of the Cloward/Piven plan embraced by the smartest president we ever had.

  2. The question is this: If this ‘new normal’ stays normal, will the grandchildren of todays children be richer or poorer?

    They will be impoverished.

    1. Seattle Sam

      Nonsense. This “new normal” has been the norm in Western Europe for a long time. They are not impoverished or poorer than their grandparents. They are simply worse off than if their governments had pursued pro-growth policies.

      1. They are probably poorer than they were in the 1980s if you consider unfunded liabilities — unless you think they can be repudiated.

      2. Ian Campbell

        you cannot generalize about Europe. The differences between N and S are massive, with the under 30′s with infinitely inferior prospects than their parents had at the same stage. Do you really want to accept the equivalent in the US? I doubt it.

        1. David Powell

          It does not matter if you or I want to accept it, it only matters if the schools and media can keep cranking out enough “Low Information Voters” who gladly will. Much like Southern Europe, whenever anyone tries to reform it, riots, then riots to complain about other countries not bailing their debts out again. The thing about the US is, there is no one big enough to bail us out, and when our currency, the global reserve currency, finally goes into Weimar Republic meltdown mode, the bad stuff will happen very quickly.

  3. marmico

    1. In January 2009, Team Obama economists predicted that the unemployment rate by 2013 would be 5.1% (and the economy would be booming at 4% annual growth). Heck, even without the stimulus, they thought the jobless rate would be down to 5.5%. That’s a big miss.

    In January 2009, the CBO economists predicted that the unemployment rate by 2013 would be 6% and the economy would be booming at 4.2% annual growth. That’s a big miss.

    In January 2009, the Fed economists predicted that the unemployment rate in the long run (as it only projected two years forward) would be 4.5%- 5.5% and the economy would be booming at 2.4%-3.0%% annual growth. That’s a big miss.

    So Jimmy P., is your point that the OMB, CBO and Fed blew it? Congrats, all three did. How did you do? ROTFLMFAO

    1. marmico

      ROTFLMFAO. Bang on 9 quarters later.

      1. marmico

        Oh, an afterthought. Please remind me of that goofball economist on labor flows that you quoted contemporaneously with senile Jack Welch frothing at the mouth about the Employment Situation Summary just prior to the presidential election.

        Are you gonna hang on and continue to quote him? Or did he bite the dust in your paper rolodex? I’d link to it, just to embarass your skill at hiding behind the prognostications of others, except there is no useful search function on the AEI blogs.

        1. juandos

          Califa bables: “Let’s start with money. The M2 measure of money is arguably the best (and it’s my long-time favorite): it is published weekly with only a minor lag, it’s subject to only minor revisions, its definition hasn’t changed materially over the years, and it’s displayed the most stable relationship to nominal GDP over long periods of any measure of money”…

          Ahhh, Califa has ‘quantitative easing‘ unicorns living on his planet too…

          Good one marmico

  4. Thomas Sullivan

    This BLS jobs report is simply BS. The true number of jobs created was a still-failing 100k. That’s according to TrimTabs, using actual data from the Treasury dept. which daily reports jobs, payrolls, and withholding taxes. The BLS uses surveys and guesswork and frequently makes massive revisions.

    http://trimtabs.com/blog/2013/03/06/trimtabs-reports-u-s-economy-adds-100000-jobs-in-february/

    To see how BLS and TrimTabs compare Jan 2010 to Dec 2012, and the wild variations in BLS revisions:

    http://trimtabs.com/blog/wp-content/uploads/2013/TrimTabs_VS_BLS.pdf

  5. marmico

    The BLS uses surveys and guesswork and frequently makes massive revisions.

    Could you kindly link me to the TrimTabs revisions? After all, TrimTabs is employing guesswork (algorithm). Thank you.

    1. juandos
      1. marmico

        Trim Tabs is out to lunch.

        To wit:
        In making our employment estimate, we had to adjust the raw income tax withholdings data to account for a substantial degree of bonus shifting,” said Santschi. “Bonus shifting pushed up growth in January and depressed it in February.

        The bonus/dividend shifting happened in November/December last year.

        1. juandos

          Trim Tabs is out to lunch“…

          ROFLMAO! Nice try marmico

  6. If Romney had these jobs numbers this article would instead say,a fantastic jobs number proof that pro growth supply side reforms work much better than that failed socialist Obamanomics tragedy.The supply side thirty year failed experiment has reached the end of the line here in the US,it didn’t work hence the Americans are ready for a new deal.Obituary:Supply side economic experiment born (1981) died (nov 2012).Cause of death:(slow motion thirty year destruction of US middle class prosperity,wealth,health,and pride).Condolences can be sent to the next CPAC convention,in lieu of Ronald W Reagen.

    1. I had done a few minutes of analysis to begin to refute Kevin’s ludicrous assertions, but I quickly realized that my effort would be all for naught. Anyone who has followed the slow erosion of American prosperity and believes it has anything to do with supply side economics rather than the creeping socialism of the last 30 years, and particularly the last 4-5years, either has no economics background or lacks the ability to reach rational conclusions from clear and unambiguous data. So I won’t waste my time.

      1. @Kjerry I concur.

        1. Todd Mason

          A supply-side joke: Bubba was buying watermelons for $2 each in East Texas and selling them in Houston for $1.75 but not all was well at his bank. “What am I doing wrong?” he asked his loan officer. “Think about it for a minute and then you tell me,” the banker responded. “I know,” said Bubba. “I need as bigger truck.”

  7. bluehill

    One of Jimmy P’s “I’m just saying” posts from back in the day.

    http://money.usnews.com/money/blogs/capital-commerce/2009/03/16/barack-obamas-irrational-exuberance

    “Label it the “Irrational Pessimism” speech. In a peppery presentation to the Brookings Institution, White House economic adviser Lawrence Summers did his best to prove that Mr. Market has it all wrong, that the 25 percent drop in stocks since Election Day represents a) an irrational mispricing of risk, rather than b) an accurate assessment of an economy slipping into mini-depression, or even c) a reasoned vote of “no confidence” in Obamanomics. …

    None of this makes a compelling case for equities. Too bad. It’s often misunderstood, though surely not by Summers, just how important the stock market has become for the real economy today, not just retirement portfolios tomorrow. The long bull market enabled Americans to save less and spend more. A permanent shift away from stocks means Americans would need to shovel greater gobs of money into lower-yielding-but-safer assets and consume less. There’s also a political risk: The White House has highlighted another clear marker for how Americans (and GOP campaign ad meisters) should judge its policies. If portfolios stay sickly, impatient voters might wonder if was not Mr. Market but Mr. Obama who, in the end, had it all wrong.”

  8. Robert Baylor

    Another bogus jobs report. I should know; I’ve been out of work for now two years and over the last two months I have noticed the dearth of communications jobs in D.C. (my specialty). Usually I can apply for about five or six a week, but I have only seen one or two that are at my level (11+ years). The D.C. economy is getting worse and there is no improvement for the rest of the nation.

    More political numbers manipulation courtesy of the BLS–and BHO.

  9. Tom Johnston

    The future lies in practical trades.Auto mechanics,carpenters,electronic techs,(thats what I am),Air conditioner techs,welders,–That Liberal arts degree and finance degree is a ticket to poverty.Vocational skills will get you working.Things people need.

  10. Democrats have low expectations. They’ve accepted high unemployment for the past 4 years, and now they’re telling us its “normal”.
    Mitt Romney would NEVER accept that if he was President.

  11. Steven g

    Its all a result of30 years of union busting and corporate greed.

  12. Ray Lopez

    Excellent commentary by my fellow Greek J. Pethokoukis. I am wondering how he came up with the two curves, with and without the Recovery Plan… I will read more and find out if nobody answers.

  13. Robert Lukitsch

    There is one statistic that puts this all into crystal clear perspective, and that’s the payroll to population ratio – which is declining:

    http://www.pionline.com/storyimage/CO/20110805/CHARTOFDAY/110809911/AR/0/AR-110809911.jpg&maxw=640&q=100

    This is, basically, a clear measure of our ability to afford the increasing cost of government. With this stat declining and the cost of government skyrocketing, we are in big trouble.

    1. juandos

      This is, basically, a clear measure of our ability to afford the increasing cost of government. With this stat declining and the cost of government skyrocketing, we are in big trouble“…

      Good point and nice find regarding the graphic…

      CNSNews: Record 89,304,000 Americans ‘Not in Labor Force’ — 296,000 Fewer Employed Since January

    2. Todd Mason

      I guess you haven’t heard that the boomer generation is turning 65 at the rate of 10,000 a day, which fact will make a serious dent participation rates regardless of who is president and what constitutes tax policy. Jared Bernstein argues here that the decline in participation is — drumroll please — geezers bowing out! http://jaredbernsteinblog.com/

      Two points here: The jobs gap is self correcting. With the economy limiting new entrants and the clock running on boomer tradesmen and technicians, we’ll see shortages under the next president. Two: Anti-Obama lip flappers will continue apace. Surely this guy could invested a few bucks in trade schools, eh?

      Here is my favorite prognostication. http://money.usnews.com/money/blogs/capital-commerce/2008/11/11/why-obama-could-be-a-one-term-president

      No, it’s the part where he opines that the recession underway “could be painful” as the 1990-91 recession.

      Second best is the page view presenting this post, in which the blogger accepts absolute affluence (nothing grows to the sky) and excoriates O in the next virtual breath (Our economy is not growing to the sky!)

      1. Two points here: The jobs gap is self correcting. With the economy limiting new entrants and the clock running on boomer tradesmen and technicians, we’ll see shortages under the next president. Two: Anti-Obama lip flappers will continue apace. Surely this guy could invested a few bucks in trade schools, eh?“…

        Geez! Reality must just tough for you when it finally works its way inside of your world…

        Record 89,304,000 Americans ‘Not in Labor Force’ — 296,000 Fewer Employed Since January

        It was an interesting read regarding Jared Bernstein entertaining observations of labor force participation and weekly earnings…

        1. Todd Mason

          Nothing wrong with my reality, Juandos. It says here that a third of dropouts since the recession began are structural (retirees) while two-thirds are cyclical (redundant workers who gave up.) http://www.epi.org/publication/ib333-labor-force-participation-since-great-recession/ Structural dropouts won’t be back as the economy improves. So the raw numbers you cite are overstated by 50 percent, and the pace of retirees checking out will pick up as the economy improves.

          1. Nothing wrong with my reality, Juandos. It says here that a third of dropouts since the recession began are structural (retirees) while two-thirds are cyclical“…

            Yeah todd, when I need a dose of fairy tales I always like going to a liberal, socialist think tank

            Meanwhile back in the ‘no land for fairy tales‘ there is a whole other cyclical at work

          2. Todd Mason

            Funny, when I need to laugh at wingnut screeds, I come here. http://dictionary.reference.com/browse/screed?s=t
            Just saving you some time.

          3. todd whines: “Funny, when I need to laugh at wingnut screeds blah, blah, blah“…

            When I want to know where you come up with some of the bizzare and questionable nonsense you spout I just have to remember what your normal position is…

            Laugh away old son, laugh away…

  14. I never get why people pull out that “unemployment with recovery plan/without recovery plan/actual” graph. Is the implication that the recovery plan made it worse?

    Of course the recovery plan didn’t make it worse. It was just a bad projection. Honestly!

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