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.