Tuesday, October 16, 2012
We're Getting There....
According to the U.S. Department of Labor,
which has tracked these numbers for decades, in the year between
November 1, 2007 and October 31, 2008 (just prior to the last
presidential election), the U.S. had a net jobs created number of
-1,938,000. However, between November 1, 2011 and September 30, 2012,
the U.S. has had a net jobs created number of +1,694,000. That latter
time span is eleven months--it obviously does not yet include this
October. We'll see what the October numbers are on November 2 or
thereabouts. We lost a lot of jobs between autumn 2007 and autumn 2009,
so we're not yet where we want to be...but we're getting there. At least for now.
Tuesday, October 9, 2012
What I Think President Obama Should Say About Deficits In His Forthcoming Debates With Governor Romney....
As a lifelong nerd, I have been interested in government deficits for decades. Let's look at the present deficit situation for a moment, and let's do so in the context of the final two debates between President Obama and Governor Romney. We know what Governor Romney will say--no taxes should be raised, and in fact taxes should be cut beyond their present levels for the wealthiest Americans in order to "stimulate" economic growth. (This would most likely be accompanied by rather large spending cuts.) So, what should President Obama say?
IF I WERE ONE OF HIS ADVISERS, I'D ASK HIM TO SAY SOMETHING LIKE THIS...
"The U.S. had budget surpluses in the final years of the Clinton presidency, and then ran up deficits again after the big tax cuts and accompanying tax loopholes that were first put in place between 2001 and 2003, and which are still in place. Those deficits were compounded somewhat by foreign war spending. They were compounded again by the recession--which began and worsened before my presidency--because fewer people had jobs and were able to pay into the system. So, deficits started swelling quite a while ago, due in large part to decisions made even before they started to swell.
"If we are serious about lowering deficits, there are two ways of going about it during this recovery period:
"Option #1: We can make big cuts in government programs, such as future Social Security, Medicare, and Medicaid benefits, as well as to Pell grants, infrastructure spending, and the like. This is likely to hit the middle class and those aspiring to get into the middle class far harder than it hits the wealthiest Americans.
"Option #2: We can make smaller but necessary cuts in government spending and raise revenue by raising the top-earner federal tax rate from where it is now (35%) to where it was during President Clinton's tenure (39.6%) and closing some tax loopholes. This means raising taxes on only the top 2% of earners in the United States to put that rate in line with where it was from 1993 to 2001, when the economy was growing at a healthy rate. It means allowing everyone else, including the entire middle class, to keep the tax cuts they have earned in my first term in office.
"Choosing either of the two methods I have outlined will lower the national deficit over time.
"Much of Europe has chosen something a lot like option #1 over the past two years. Not coincidentally, the Eurozone has been mired in a double-dip recession for the last year or so. We hope they are able to overcome it as quickly as possible.
"For our country, I choose option #2. I think the majority of Americans would choose that option, as well."
That's what I'd suggest President Obama says--either all of it or most of it. It takes-on the opposing viewpoint while still sounding presidential; it isn't overly aggressive, personal, or bumper-sticker in nature. It's spirited without being mean-spirited. I think people would appreciate hearing something like that.
IF I WERE ONE OF HIS ADVISERS, I'D ASK HIM TO SAY SOMETHING LIKE THIS...
"The U.S. had budget surpluses in the final years of the Clinton presidency, and then ran up deficits again after the big tax cuts and accompanying tax loopholes that were first put in place between 2001 and 2003, and which are still in place. Those deficits were compounded somewhat by foreign war spending. They were compounded again by the recession--which began and worsened before my presidency--because fewer people had jobs and were able to pay into the system. So, deficits started swelling quite a while ago, due in large part to decisions made even before they started to swell.
"If we are serious about lowering deficits, there are two ways of going about it during this recovery period:
"Option #1: We can make big cuts in government programs, such as future Social Security, Medicare, and Medicaid benefits, as well as to Pell grants, infrastructure spending, and the like. This is likely to hit the middle class and those aspiring to get into the middle class far harder than it hits the wealthiest Americans.
"Option #2: We can make smaller but necessary cuts in government spending and raise revenue by raising the top-earner federal tax rate from where it is now (35%) to where it was during President Clinton's tenure (39.6%) and closing some tax loopholes. This means raising taxes on only the top 2% of earners in the United States to put that rate in line with where it was from 1993 to 2001, when the economy was growing at a healthy rate. It means allowing everyone else, including the entire middle class, to keep the tax cuts they have earned in my first term in office.
"Choosing either of the two methods I have outlined will lower the national deficit over time.
"Much of Europe has chosen something a lot like option #1 over the past two years. Not coincidentally, the Eurozone has been mired in a double-dip recession for the last year or so. We hope they are able to overcome it as quickly as possible.
"For our country, I choose option #2. I think the majority of Americans would choose that option, as well."
That's what I'd suggest President Obama says--either all of it or most of it. It takes-on the opposing viewpoint while still sounding presidential; it isn't overly aggressive, personal, or bumper-sticker in nature. It's spirited without being mean-spirited. I think people would appreciate hearing something like that.
Wednesday, May 16, 2012
The U.S. Private Sector Has Been In Recovery For A While Now. The U.S. Public Sector, However....
Finally, somebody got the analysis of the U.S. recovery right. The Economist, which is actually a conservative publication, states that "...the public sector is still hobbling the recovery.... Government payrolls typically swell in economic recoveries, by 5.9% on average during the first 34 months after a recession has ended [but] not this time.... The 2.5 million overall rise in employment since the downturn's end corresponds to 3.1 million new private jobs, less 600,000 government jobs. Local governments have cut over 500,000 jobs, most of them in education...." Yes, this is a complicated scenario and people have differing views of it, but we can all at least agree that the private sector is in recovery, but things like education are in the toilet. I know it. I'm living it. The Economist is hit or miss, but this is a good article:
http://www.economist.com/node/21554560
http://www.economist.com/node/21554560
Wednesday, May 9, 2012
The Sizzle And The Steak
Anyone who tells you that economics is a "simple" topic is selling you snake oil. It's increasingly complicated in a rapidly industrializing, globalized world, which means it's both maddening and fascinating. For instance, oil prices have slid on the world markets by nearly 10% since last week (yay!), due primarily to worries about the economic future of some of our European trading partners and the potential effect of their slowdowns on the world economy (no!). For their part, some European countries are cutting their debts to save their credit ratings (good)...through some measures which are hurting their economic growth (bad), at least for now. Hence, some American exports are beginning to struggle again (boo!), even as internal American consumer spending is beginning to grow again (hooray!). Many corporations are posting huge profits (yes!), but the global uncertainty means that many of them are hiring slowly for now (blah!).
By the way, unlike more than a few other already-industrialized nations that feature mature economies, the U.S. is not presently either in a recession or at nearly zero growth (positive sigh), and is so far growing at a quicker pace (2.2%) than last year (1.7%) (another positive sigh). However, the U.S. economy grew at a slower pace during the first quarter of this year (2.2%) than it did during the fourth quarter of last year (3.0%) (negative sigh), due in large part to the fact that government spending, which accounts for a sizable portion of GDP, is down over 5% in 2012 from the same period of the previous year. This is a good thing because the government debt (due to unsustainable Bush-era tax policies, as well as wars and other programs that have been unpaid for for quite some time) does need to be lowered, but it is also somewhat of a bad thing because it comes at the price of growth in the national GDP, which means that hiring takes a hit, at least for a while.
And that's just the tip of the iceberg, folks. Yep, anyone who says they have an "easy" solution to this is trying to fool everyone, including themselves. Still, Mitt Romney now suggests that we should be creating a net +500,000 jobs per month in order to dramatically lower the American national unemployment rate. That sounds great, but it's a ridiculous suggestion given both historical data and the global economy of the moment. Historically, the U.S. has seen a grand total of FIVE MONTHS of net +500,000-or-more job growth since the end of the Eisenhower presidency, which occurred over fifty years ago. Five months. None of them occurred during the Kennedy administration, none of them occurred during the Johnson administration, none of them occurred during the Nixon administration, none of them occurred during the Ford administration, two of them occurred during the Carter administration (!), one of them occurred during the Reagan administration, none of them occurred during the Bush Sr. administration, one of them occurred during the Clinton administration, none of them occurred during the Bush Jr. administration, and one of them occurred during the Obama administration. That's it, just five months total, despite the fact that several recessions have come and gone in the last fifty-plus years, some of them (such as the protracted recession during the early 1980s) quite severe in nature.
Either Mitt Romney is stupid or he is being intellectually disingenuous and hopes that the American people don't care to know the facts. I do not think he's stupid. Hence, he's trying to sell snake oil in order to become president. Whether a flip-flopper or "severely" conservative or whatever, when it comes to policy substance he's following his increasingly hyperbolic party into cloud cuckoo-land by making outrageous claims (whether they be about President Obama's policies or about his own) with little or no substance to back them up. I may be in the minority on this, but I prefer to hear that there are no easy answers to this scenario but that some legislative measures can help both the private sector hire more people and the public sector stop shedding jobs, as President Obama suggests, instead of Mr. Romney's bluster, which is often all sizzle and no steak.
By the way, so far in 2012, the U.S. is averaging monthly job growth of about net +200,000 or so. In pre-recession economic times, that would be good news. Right now, it doesn't seem so good. Yet let's remember that when President Obama first stepped foot in office, we had for months under his predecessor in office averaged net job losses of -750,000 or so. 2%+ GDP growth isn't as robust as many people would at present prefer, but it's growth in the face of a downturn in much of the industrialized world, and it's not fake growth based in part on an overpriced housing bubble. That's cold comfort for job seekers, but it's also more than what many other industrialized nations with mature economies can claim at the moment.
By the way, unlike more than a few other already-industrialized nations that feature mature economies, the U.S. is not presently either in a recession or at nearly zero growth (positive sigh), and is so far growing at a quicker pace (2.2%) than last year (1.7%) (another positive sigh). However, the U.S. economy grew at a slower pace during the first quarter of this year (2.2%) than it did during the fourth quarter of last year (3.0%) (negative sigh), due in large part to the fact that government spending, which accounts for a sizable portion of GDP, is down over 5% in 2012 from the same period of the previous year. This is a good thing because the government debt (due to unsustainable Bush-era tax policies, as well as wars and other programs that have been unpaid for for quite some time) does need to be lowered, but it is also somewhat of a bad thing because it comes at the price of growth in the national GDP, which means that hiring takes a hit, at least for a while.
And that's just the tip of the iceberg, folks. Yep, anyone who says they have an "easy" solution to this is trying to fool everyone, including themselves. Still, Mitt Romney now suggests that we should be creating a net +500,000 jobs per month in order to dramatically lower the American national unemployment rate. That sounds great, but it's a ridiculous suggestion given both historical data and the global economy of the moment. Historically, the U.S. has seen a grand total of FIVE MONTHS of net +500,000-or-more job growth since the end of the Eisenhower presidency, which occurred over fifty years ago. Five months. None of them occurred during the Kennedy administration, none of them occurred during the Johnson administration, none of them occurred during the Nixon administration, none of them occurred during the Ford administration, two of them occurred during the Carter administration (!), one of them occurred during the Reagan administration, none of them occurred during the Bush Sr. administration, one of them occurred during the Clinton administration, none of them occurred during the Bush Jr. administration, and one of them occurred during the Obama administration. That's it, just five months total, despite the fact that several recessions have come and gone in the last fifty-plus years, some of them (such as the protracted recession during the early 1980s) quite severe in nature.
Either Mitt Romney is stupid or he is being intellectually disingenuous and hopes that the American people don't care to know the facts. I do not think he's stupid. Hence, he's trying to sell snake oil in order to become president. Whether a flip-flopper or "severely" conservative or whatever, when it comes to policy substance he's following his increasingly hyperbolic party into cloud cuckoo-land by making outrageous claims (whether they be about President Obama's policies or about his own) with little or no substance to back them up. I may be in the minority on this, but I prefer to hear that there are no easy answers to this scenario but that some legislative measures can help both the private sector hire more people and the public sector stop shedding jobs, as President Obama suggests, instead of Mr. Romney's bluster, which is often all sizzle and no steak.
By the way, so far in 2012, the U.S. is averaging monthly job growth of about net +200,000 or so. In pre-recession economic times, that would be good news. Right now, it doesn't seem so good. Yet let's remember that when President Obama first stepped foot in office, we had for months under his predecessor in office averaged net job losses of -750,000 or so. 2%+ GDP growth isn't as robust as many people would at present prefer, but it's growth in the face of a downturn in much of the industrialized world, and it's not fake growth based in part on an overpriced housing bubble. That's cold comfort for job seekers, but it's also more than what many other industrialized nations with mature economies can claim at the moment.
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