This Is Your Obama Recovery
By Mitch Berg
Unemployment down to 7.3% – almost entirely due to people leaving the workforce; the Labor Force participation rate is down to 63.2%, the lowest since the depths of the Carter Malaise.
That means the percentage of the workforce actually working is down to 58.5864%.
- When President Obama was inaugurated in January of 2009, it was 60.58%
- In October of 2009, when the top-line unemployment rate was 10%, the rate was…58.5%. Statistically the same as today, even though the “unemployment rate” has theoretically dropped by a quarter.
- At the bottom of the recession – December of 2010 – it was 58.2%.
- A year ago, it was 58.36%. It’s been in the 58% range ever since – a time when, NPR assures us, we’ve been “recovering”.
- And ten years ago last month – as the economy was getting out of the DotBomb and 9/11 slowdowns, but before the mortgage bubble really inflated – it was 62.07%.
America’s work force is still in full recession mode.
Democrats were pleased to call the recoveries of 2003 and 1983 “jobless recoveries”. Especially if you’re one of the Afrian American voters who turned out for Obama twice now.
This one seems to be a “recoveryless recovery”.
September 6th, 2013 at 1:07 pm
Obama voters – 51.1% of the people who voted in 2012 — are deluded on the topic of the economy. They think these three things:
A) The economy is doing great! An article on HuffPo said the economy is doing great!
B) If the economy is not doing great, it’s Bush’s fault.
C) The bastard Republicans, who only care about money, are purposely sabotaging the economy to make Obama look bad! Because racist!
*To prove item C, point to something Limbaugh said about wanting Obama’s agenda to fail, or McConnel saying the GOP’s highest priority is to defeat Obama. Because then it’s science!
September 6th, 2013 at 9:02 pm
Too many people are focused on comparing the current expansion with previous ones instead of simply accepting that this expansion is what it is, slow, made weak by a housing bust, debt overhang and a “worker overhang” (of unneeded workers).
Not to mention that Summer is a pretty weak time for employment, anyway, so it’s not that “disappointing”, regardless. This August we had net +169K jobs, August 2012 we had +165k, August 2011 we had +132k, August 2010 we had -37k. http://data.bls.gov/cgi-bin/surveymost?bls
The U.S. and it’s difficult for many Americans to believe, has managed the economic crisis better than the other advanced economies. The U.S. got the banking system back into shape quicker than anyone else. The Europeans still haven’t done that. In that process, the U.S. ran huge budget deficits, and through the sequester the budget is now in pretty good shape.
September 6th, 2013 at 9:10 pm
The Great Recession wasn’t as great as the pundits/economists have stated.
/Business cycles. For the contraction that lasted from the fourth quarter of 2007 to the second quarter of 2009, real GDP decreased at a 2.9 percent annual rate; in the previously published estimates, it decreased 3.2 percent. The cumulative decrease in real GDP (not at an annual rate) was 4.3 percent; in the previously published estimates, the cumulative decrease was 4.7 percent. In the revised estimates, real GDP decreased in the first, third, and fourth quarters of 2008 and in the first and second quarters of 2009./
Revisions of recent years:
“For the 3 most recent years, the annual growth rate:
• was revised up from 2.4 percent to 2.5 percent for 2010,
• was unrevised at 1.8 percent for 2011, and
• was revised up from 2.2 percent to 2.8 percent for 2012.”
http://bea.gov/newsreleases/national/gdp/2013/pdf/gdp2q13_adv.pdf
September 6th, 2013 at 9:57 pm
Emery wrote:
Too many people are focused on comparing the current expansion with previous ones instead of simply accepting that this expansion is what it is, slow, made weak by a housing bust, debt overhang and a “worker overhang” (of unneeded workers).
This is tautology. High unemployment caused by ‘unneeded workers’? Gosh! Hey, aren’t you pro-amnesty, Emery? Because we need more workers?
September 6th, 2013 at 10:18 pm
Most jobs are created by small businesses. The reasons for this are well understood; they have the potential for greater growth than large businesses.
Many small businesses use home equity as their start-up capital. In 2008 home equity vanished. The proper response to maintain job growth would have been to reduce the regulatory burden on small businesses while increasing the return to small businessmen (aka a tax cut).
Instead, Obama raised taxes and increased the cost of business. He basically kicked the job-producing class in the balls, again and again, when they were already crippled by the disappearance of easy capital.
There is no mystery about why this recovery is historically slow. Obama is an idiot. He represents dependents on government largess, who see no problem with poor economy as long as government spending keeps going up.
On Jan 1. the withholding tax (FICA) went up 2%, to its old level. Obama signed off on this because he got a tax increase on wealthier workers (not ‘the rich’) in return. Double-whammy to the economy. That’s a 125 BILLION DOLLAR/YEAR hit on the consumer spending that drives the economy. And we are supposed to believe the sequester is to blame for the continued poor recovery? Jesus.
September 6th, 2013 at 10:25 pm
The fundamental problem of which low-skill unemployment is a symptom is that as the world opened up post-cold war, there has been a flood of manpower with useful education and useful infrastructure. In 1980, there were perhaps a billion people who lived in countries that fully participated in the capitalist system. There are now 4-5 billion, and that change happened in one generation. The indirect effect of those 3-4 billion extra people has been to skew the demand for high vs. low skill workers worldwide. That will work itself out in a generation, as China and India are learning to produce lots of high skill workers themselves, but this effect, which over-accentuates the economic reward of skills, will be with us for decades.
So what should America (and other rich countries) do? You can encourage more people to go learn finance, engineering, and other high skill professions, but the gains to be had there are marginal — most people who can do that work already do it. What do you do with the low skill white collar and blue-collar workers who are facing low demand for their labor? We need to reduce the cost of hiring lower wage employees. Health care and old age pension funding needs to be taken away from employers and made strictly a matter between individuals and government, which means we will have to be honest about what each costs and how much redistribution each involves. Earned income tax credits and similar subsidies that artificially boost low wage per hour jobs should be expanded and we must NOT increase the minimum wage. This combination could easily halve the cost of hiring a low wage worker. Finally, training for skilled labor jobs need to receive the kind of subsidies that 4-year colleges do. There are still lots of jobs for various kinds of technicians in the US, and that will continue. Many students need to be directed down those paths rather than towards universities, where after 4 years and tens of thousands of dollars of expenses, the bottom third of graduates emerges with essentially no skills and no prospects.
We’re not going back to the post-WW2 period where low skill Americans were in high demand to staff the only functioning capitalist market in the world. That was an economic and historical aberration, and because of those decades of easy prosperity for the working class, America finds itself with tax and benefit systems that in today’s more normal worldwide economy lead to unacceptable levels of inequality. An American with the skill set of a Chinese laborer is worth little more than his Chinese counterpart. That will lead to terrible inequality unless the government changes taxation and benefit systems to better meet the needs of lower skill workers.
September 6th, 2013 at 11:08 pm
Pardon the long post. It’s on-topic, I think. I wish King Banaian could comment. It’s understandable that he will not.
I am not sure that what you propose is politically possible, Emery.
I believe that Obama hates the high unemployment rate, especially for low-skilled workers, but he can’t do anything about it politically. His party needs the votes of Hispanics, so he must be in favor of giving permission to work in the US to a large population of low skilled laborers who are not citizens. His party is ideologically committed to high income taxes, so he must tax successful entrepreneurs at a high level. He is dedicated to the implementation of Obamacare, so we’ll get Obamacare even if it kills jobs.
I shouldn’t need to say this, but Obama has no verifiable education or experience in economics or business (he did once say that he worked his way through college by clerking at an ice cream stand, but he retracted that statement when challenged). The economy of his state senate district in Illinois was driven by state and city spending.
The only remark I ever heard Obama make that indicated he had even been briefed on economic matters was back in 2009, when he was asked if it wasn’t better to cut taxes than it was to engage in a government spending ‘stimulus’. He responded to the effect that if people got tax cuts, they would save the money instead of spending it and there wouldn’t be any stimulus.
This is where the alarm bells should have gone off. Keynes anticipated that there were limits to stimulus by spending borrowed money. Keynes said that the marginal efficiency of capital is relationship between the cost to spend capital versus its anticipated return, i.e., if you anticipate making 5% on money you borrowed at 3%, the marginal efficiency of capital is 2% (high, for these times). If the marginal efficiency of capital is perceived to be decreasing, investment decreases.
Saving at 0% is more attractive than investing with -1% return. In the case of stimulus spending, if the government spends a trillion dollars to bump consumer spending, but consumers are ‘forward looking’ (Keynes’ term for a spender’s expectations based on perceived marginal efficiency of capital, e.g., is it better to spend or to save based on my belief on ROI), then stimulus doesn’t work because consumers are anticipating future increased taxes or reduced government benefits to pay for current deficit spending. People stuff money in the mattress before they will spend it.
More than anything else, consumers need to believe that the economy is growing robustly, that jobs at high wages will be available, and the value of their assets are increasing. If people are forward looking, the government can’t do this by deficit spending because will spend less as the government spends more.
We need strong, sustained, private sector. The best, sure-fire way to do this is by increasing the marginal efficiency of capital (deregulation). Or invading another country and taking their stuff. I prefer the former.
September 7th, 2013 at 6:31 am
I am an immigrant, and I have spoken to Mexican immigrants. If we changed the rules to make it possible for them to seek opportunity without breaking the law, they would play by the rules, as much as any American. You call the assumption of universal human dignity and universal human rights emotional pap. What exactly are the facts that I am ignoring? That Mexican are shiftless criminals, out to steal our money and our jobs? That Mexico is a land of boundless opportunity, where enterprising Mexicans could thrive and prosper if they weren’t so covetous of the opportunity to cut our grass, work in our meat processing plants, and print our t-shirts?
Yes, I think Mexicans who cross our border are enterprising and brave. They come here to work, and I respect that, and their willingness to work makes the US a better place. I honestly believe that if borders had never been closed, the world would be a more equal place today, and the demand to immigrate would be much lower. Given today’s pent up demand, it is appropriate to limit immigration to those who most want it, but those limits should be reasonable and never absolute. You claim to want facts, but all I ever hear from opponents to immigration is fear, racism and misguided lump-of-labor fallacy economics.
September 7th, 2013 at 10:01 am
Emery, end the welfare state and most conservatives would be completely in favor of open borders.
September 7th, 2013 at 11:20 am
I have this idea, Emery, that US law and policy should be determined by American citizens in pursuit of their interests, not by foreigners.
Your claims about opponents of open-immigration and amnesty are strawmen.
You still haven’t explained how we fix the problem of too many workers low skilled, poorly educated workers by importing millions more low skilled, poorly educated workers. Even you must see the problem there.
If you look at the lies and the rape of the public trust, it’s all coming from your side in the immigration debate — from false promises of greater border security to unilateral, undemocratic declarations of amnesty for certain groups of people in the country illegally. Who do you think this country belongs to, Emery?
September 7th, 2013 at 5:55 pm
@jpmn
The American system of universal benefits and progressive taxation is badly broken. Benefits must be means-tested, i.e. directed at the poorest, or the sight of young lower middle class workers subsidizing upper middle class retirees will result in the loss of all popular support for what should be poverty-relief programs. The income tax code, in an effort to be progressive, has grown to be monstrously complex, replete with incentives to cheat and to not work. America needs to do away with the current income tax code and eliminating deductions, health care and mortgages are the big targets and both should go. And replace it with a consumption tax, a carbon tax, and an income tax, which is a simple, deduction-free tax on the wealthy only, which treats all sources of income equally.
@PM
I can think of several different areas where the US could change tax laws and labor laws to encourage employment. But a jobs policy implies a jobs bureaucracy and an increase in regulation. I might be convinced to support such a move if I were aware of any place with a jobs policy that didn’t have continued high unemployment after adopting it. Low unemployment seems to be correlated to a lack of a jobs policy.
September 8th, 2013 at 1:58 am
At the absolute, bare minimum a job policy should require that people who receive wages for work should be legally entitled to receive wages for work.
The pro-amnesty crowd thinks that this idea is based on fear, racism, and something called ‘misguided lump of labor economics’. No-one outside the pro-amnesty crowd understands what they are talking about, since the issue is, in plain language that everyone who is not a mental deficient should understand, people who receive wages for work should be legally entitled to receive wages for work.
September 8th, 2013 at 9:05 am
The moral imperative is clear and always has been. A citizen has the right to travel, live, and work where he wishes, and offer or refuse his services to any employer in free exchange for remuneration subject to labor laws. A non-citizen does not. That double standard is indefensible as anything but nativism. It is a mockery of the notion of universal human rights. Strong borders strengthen tyrants on both sides of them while reducing freedom and encouraging conflict.
In economic terms, the globalized economy makes every country a competitor for talent. Refusing to let talented people into the country is foolishly short sighted. The pressure that individual might have put on wages will still be applied, but from overseas. Better to have him live and pay taxes here.
September 8th, 2013 at 12:10 pm
The notion of ‘universal human rights’ mocks itself, Emery. I suppose you mean it to counter the rather well-established idea that the United States is a Republic ruled by its citizens. As an American, I can say “F*ck universal human rights. Another plan to restore the oldest form of government in the world, rule by a political elite who run the country according to their desires, not the desires of its citizens.”
What are these rights? How are they chosen, adopted, and, when needed, modified?
I prefer the US constitution to abstract notions about what ‘universal human rights’ should be.
September 8th, 2013 at 2:20 pm
Illegal workers leave soon after the jobs disappear, despite the difficulty and expense of getting back in. If they were here on legal work visas, they’d react to the job market even quicker. Let them in, keep track of where they work, make them pay a tax for the burden they put on social services, and stop making the USA into a police state. Boost the earned income credit if you’re afraid extra workers will keep wages down.
The fact that they are not Americans does not allow us to treat Mexican workers like dogs in a pen. They are people, entitled to the same human rights as any of us, including the right to contract to work with whoever wants to hire them. I’m not prepared to see us create a 21st century apartheid system just because somebody doesn’t want a Mexican competing for ‘their’ job.
September 8th, 2013 at 10:11 pm
Illegal workers leave soon after the jobs disappear, despite the difficulty and expense of getting back in.
Not if they have a kid while they are here.
make them pay a tax for the burden they put on social services, and stop making the USA into a police state.
If they could pay the burden they’d be highly payed workers. Taxes are a wealth transfer device, it doesn’t make sense to tax someone $10,000 and give them $10,000 in benefits. And you don’t seem to know much about what life is like in a police state.
Emery, unless you can point to someone — anyone — who is suggesting that illegal aliens be treated likes dogs in a pen, this is a strawman.
The fact that they are not Americans does not allow us to treat Mexican workers like dogs in a pen.
This is not what the law says:They are people, entitled to the same human rights as any of us, including the right to contract to work with whoever wants to hire them.
Almost every country in the world controls who can contract for labor. The US is not acting inhumanely by not allowing this unless every country in the world is acting inhumanely.
I’m not prepared to see us create a 21st century apartheid system just because somebody doesn’t want a Mexican competing for ‘their’ job.
You are proposing a 21st century apartheid system if you are promoting a permanent class of ‘guest workers’. I wonder how the USSC will see how that fits in with the 14th amendment?
And why do you think that this is about Mexicans? The senate bill, at the request of tech companies, lifts the limits on h1b’s and reduces the requirement that companies have to show that they tried to hire an American to do the job. And no this isn’t about CS and material science PhD’s — read slashdot. It’s about penny-ante web developers and coders, not project engineers and project scientists.
September 9th, 2013 at 12:39 am
I don’t mean to sound so hostile, Emery. It’s obvious that you sympathize with the camposino who crosses deserts to work for ten bucks an hour at a cannery. I sympathize more with the non-union construction guy who finds himself still making the same wage he made twenty years ago – not adjusted for inflation, the same $15 or $20 bucks an hour.
I don’t have a dog in this fight any more than you do. ITAR says my job has to be done by a US citizen or permanent US resident.
September 9th, 2013 at 6:01 am
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September 9th, 2013 at 6:02 am
It’s useful to stop thinking in terms of our people and their people, and our jobs and their jobs, which is simply racist xenophobic tribalism. We are all people; we each deserve the opportunity to offer our services in exchange for a wage, wherever we want. That is the basis of freedom and the only hope for mutual prosperity. We can’t hope to solve the world’s problems of population, disease, scarce resources, and environmental concerns if we don’t treat all people equally.
The established rich world is not in competition with the emerging economies. We will arrive at our joint future together, as winners or losers. Like it or not, in the 21st century, we’re all in this together. So open up the borders, trade and migrate freely, and try to look at the upside. The world economy is growing faster than it ever has; opportunities abound. If we grow rich enough together, the world might just make it to the 22nd century with a stable or declining population, a rational approach to the environment, and with most people having the freedom and means to live as they choose, where they choose.
So work to get some skills, get a job, and stop complaining. Most of the other 6 billion would be happy to trade places with you.
September 9th, 2013 at 8:00 am
I’ve reluctantly come to the conclusion that physical borders don’t matter if financial borders remain open. US manufacturers didn’t move our people to China, we moved our money to China and hired their people while ours sit idle. The flight of capital to more welcoming venues continues.
Import all the unskilled Mexicans you want, that won’t solve the problem of capital flight. It’ll just hasten the day when the world is “more equal” which sadly means “more equally poor.” I don’t care how “fair” it’s going to be, I don’t want to live like a Third Worlder.
.
September 9th, 2013 at 9:47 am
I’ve spent a lot of time working in Mexico. I’ve spoken with white collar engineers and managers, skilled blue collar workers, and unskilled, illiterate laborers. (BTW, unless you’ve had to go through, or are at least familiar with the process of obtaining a work visa from the Mexican government you should lose your right to speak to immigration between us and them.)
The white collar class is happy as clams right now. They’re enjoying a stable influx of foreign capital from the Netherlands (Shell Oil) and Germany (Siemens, Volkswagen & others)…the only time they cross the border is to buy luxury goods in San Deigo & Dallas.
It’s the latter two groups that are sneaking across the border & they are *not* the people we want. These are the folks that bring Mexico to within a hairs breadth of becoming another Venezuela and Cuba every election cycle. The Mayor of La Ciudad de Mexico is an avowed Socialist, as are the mayors of several other medium to large cities.
The people sneaking across the border see free access to our medical, educational and welfare system as a God right; just as Emery does. And the stinking leftists are perfectly willing to encourage and abet this belief in theory and practise to get votes.
The problem that air-heads like Emery refuse to acknowledge our economy simply cannot bear the burden of the Third World’s prolificacy. They see an equality that brings everyone down to squatting around dung fires as perfectly acceptable, so long as it doesn’t include them.
I say eff ’em…eff ’em all.
September 9th, 2013 at 2:12 pm
It’s useful to stop thinking in terms of our people and their people, and our jobs and their jobs, which is simply racist xenophobic tribalism.
These are the words of a crazy person. Calling people names is not an argument.
If what you say is true, every single nation in the world is being run by racist, xenophobe tribalists, and has been for all of human history. Creating nations is what people do when they are free. By declaring nations an enemy, you have declared mankind an enemy.
September 9th, 2013 at 7:45 pm
What Swiftee alleges is boilerplate right wing hysteria, fueled largely by racism, and perhaps somewhat by other cultural prejudices. Most of his comment is essentially a children’s rant against people he doesn’t like, and to whom he ascribes quite a few negative characteristics without, of course, any supporting evidence at all.
September 9th, 2013 at 8:38 pm
” . . . without, of course, any supporting evidence at all.”
There is zero evidence of racism in Swiftee’s comment, Emery.
Or perhaps you could point it out?
I didn’t think you could.
September 10th, 2013 at 6:49 am
I’d argue that the main reason Hispanic Americans don’t vote for Republicans is that they feel Republicans come off as a) anti-immigrant, and b) willfully ignorant. That is enough to explain their voting patterns.
September 10th, 2013 at 7:17 am
Why should a hispanic American (whatever that means) feel differently about anything than Irish Americans or German Americans.
But then I don’t like to categorize people based on their ethnicity. It’s bigoted.
September 10th, 2013 at 8:34 am
Emery doesn’t see why importing 11 million unskilled workers is a problem. I say why stop there? Right now, the number of illegals is limited by those who can sneak across the desert. Why not throw open the borders to the entire world? Let’s take 1 billion unskilled workers, to do the jobs Americans won’t do, and let the stinking lazy Americans collect welfare. If 11 million is good, why isn’t 1 billion better? Shouldn’t that make us rich?
September 10th, 2013 at 8:37 am
Before you move on to the next topic you know nothing about, how about answering Mingo’s question, Emery?
Or were you just letting phonetic drool run out of your yap again?
September 10th, 2013 at 4:37 pm
“But then I don’t like to categorize people based on their ethnicity. It’s bigoted.”
I hope you don’t consider the GOP a bigoted group for being too concerned with their “Hispanic” [‘based on their ethnicity’] voter deficit.
http://www.newsmax.com/Newsfront/rove-gop-latino-voters/2013/07/11/id/514697
September 10th, 2013 at 6:27 pm
Even Rove, a man who is paid to categorize people, wouldn’t group all ‘hispanic Americans’ into one lump, as you did, Emery. Ted Cruz? Marco Rubio? Hello!
September 10th, 2013 at 7:09 pm
Face meet palm.