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July 4th, 2014
Wow. The job market improved so much that even Fox News couldn't find anything bad to say about it. That's a rarity. But seriously. 288,000 jobs, 5th straight month of 200,000 or more added jobs, unemployment back down to 6.1%. We still took dramatic damage since 2001 and 2008 that has not been repaired. We are still crippled by debt. Taxes for wealthy people are still too low. Spending on infrastructure is still too anemic. Jobs still pay less. Who knows, maybe if Republicans in Congress hadn't obstructed Obama for the past six years solid, maybe things would have improved a lot more—though Obama did not exactly try nearly as hard as he should have. Bottom line, economies recover sometimes just because they do. But the political bottom line is, for better or worse, whoever is in office when something happens, they get the credit or blame. Of course, just because Fox can't find anything bad to say, doesn't mean they give Obama any credit at all—a search of their main article on the story or other articles shows they do not mention Obama once, even indirectly, alongside good economic news. The opposite holds for bad news, naturally.
On a related topic, Obama shows promise to finally dig himself out of the hole that Bush dug for him. In the past, it has been a reliable fact that job creation under Democrats has been better than under Republicans—so consistently so that the poorest-performing Democrat (Kennedy) did better than the best-performing Republican (Nixon). Obama's problem: In his first year, his performance was crippled by Bush's disastrous recession. Although Obama immediately turned job prospects around for the better, he still had to pull up out of a record-breaking dive. In that first year, 4.3 million jobs were lost. No fault to Obama, as I said, but he gets those losses put onto his portion of the ledger. As it turns out, with the latest reports factored in, Obama has added a total of 4.8 million jobs net—and more than 9 million jobs if you don't count the first year. Which is more fair—Obama only improved things, he did not create the abyss he dragged us out of. Obama's record looks even better when considering that Republicans in Congress not only obstructed but did everything they could to sabotage things, up to and including the debt default threat, which did serious damage. Compare this with Bush, who only added a net of 1.1 million jobs over 8 years. More fairly, if you count from February 2002 to January 2010, assuming it takes a year for one's policies to get started and wind down, Bush lost 1.3 million jobs. But the official record, however undeserved, is +1.1 million. Obama has overseen job gains of 1.4 million in the past 6 months alone, and 2.5 million in the past one year. Alas, even at that rate, by the time he leaves office, he will only have added only an additional 7 million jobs or so—maybe a total of 12 million jobs added, net, over his eight years. That would probably end up being only a 1.1% average increase over his term, placing him of Ford or Coolidge territory. Sadly, even if you don't count that first year of climbing out of the hole, his yearly average job creation would only reach about 1.8%, still below Reagan (2.1%) and Nixon (2.2%). Unless job creation really takes off and we regularly see numbers over 300,000 until January 2017, Obama will break the trend of Democrats always performing better than Republicans.

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  1. Troy
    July 4th, 2014 at 03:47 | #1

    http://research.stlouisfed.org/fred2/series/PAYEMS/

    is the raw numbers.

    zooming into 1990-now:

    http://research.stlouisfed.org/fred2/graph/?g=EOe

    shows the pace is nothing like the 1990s, which came on top of massive job growth of the 1970s and 80s (each decade — 70s, 80s, 90s — saw 20M jobs added, each).

    The 1990s economy topped out at 132M jobs, and the Bush crew juiced it with the big housing bubble flim-flam, which injected trillions into the paycheck economy via the free money of housing appreciation and refinancing that money out of houses.

    http://research.stlouisfed.org/fred2/graph/?g=EOh

    is the above chart with annual consumer debt take-on in red (right axis), showing the timing of the housing bubble influx.

    adding annual federal spending in green:

    http://research.stlouisfed.org/fred2/graph/?g=EOi

    shows the scale of gov’t spending that is keeping the economy out of recession after the bubble popped.

    (and how the GOP has capped spending at 2010 levels)

    http://research.stlouisfed.org/fred2/graph/?g=EOj

    is real per-capita federal spending.

    The general fiscal austerity of the 1990s got this down to $18,000 per worker, but now it’s up to $26,000, with the Bush years responsible for half or more of the rise.

    $26,000 per worker. I don’t even understand how this is possible, but there it be.

    http://research.stlouisfed.org/fred2/graph/?g=EOl

    is total government spending, state and local too, real per-worker.

    $40,000 per worker. That is an immense money pump in the economy.

    Still, employment isn’t too hot when looking at working-age population not working:

    http://research.stlouisfed.org/fred2/graph/?g=EOn

    shows that if we had the employment of the 1990s we’d have 150M jobs now, not 140M.

  2. Tim
    July 4th, 2014 at 04:18 | #2

    I think it things are crystal clear and maybe they are starting to penetrate through the average voter’s mind set.

    First and foremost the Republican party is consistently for one thing: the ever greater concentration of wealth and power. They will embrace any epistemology that helps facilitate this.

    In economics that means embracing supply side economics and only supply side economics. I’ve read some things to indicate that some right wing economist don’t even recognize demand side economics or demand as ever an issue.

    But… the efficacy of supply side bias economics only achieves traction if you have a supply short fall (or demand surplus) i.e. inflationary economics. Everyone knows that we don’t have a supply problem we have a demand shortfall problem.

    So… republican, GOP, tea-party, whatever they want to call themselves these days, policies can not succeed in the current environment, nor for the far-into-the-future foreseeable future. Basically not in the rest of most of our life times.

    Infact… we hit supply side saturation way back in Clinton’s 2nd term. The markers are: investment bubbles and calls for deregulation.

    Calls for deregulation become more insistent because investors can no longer make decent ROI on orthodox investments. The legal system, in theory, tries to channel the greed instinct into activities that are socially constructive. But when there’s not enough demand, then investment can’t generate much in the way of returns on that investment. You can build a new factory, but if demand is low, no one will buy the factory’s products and so then no ROI. So investors more and more demand access to the parts of the economy that they’ve been roped off from investing in. They are more than happy to go into pay day loans, 30% credit card lending, sub prime mortgages if the return is over 6%. Because investors are rich and insistent the government eventually gives in.

    Investment bubbles occur in the same environment. Investors can’t get decent returns from normal investing. So when one sector of the economy offers decent returns – say new technology which brings with it its own latent demand – investors flood into that sector creating the bubble.

    All of that existed BEFORE 2000. In the face of such clear evidence, Bush did not opt for demand side policies, but instead opted pored the coals on supply side economics. The combined effect of Bush policies moved over $10 trillion, and probably around $13 trillion from the demand side to the supply side of the economy (i.e. the 1%). They then covered their tracts with cheap money for housing sector but when the credit markets ran out the slack demand collapsed, taking with it the financial sector.

    Given that this analysis is so simple and basic, one has to believe that the Republicans knew all of this. They figured they could forestall the inevitable collapse until 2009 when a democrat would be in office (hopefully Clinton, thus discrediting the Clinton management of the economy in the 1990s). That plan would discredit Democrats for a generation. Like the Germans before Moscow in December 1941, the plan fell apart only a month and a half before the election, with the collapse of Lehman, thus the Democrats dodged a bullet.

    Now Republicans are tainted with poor management of the economy, not just in the 2000s, but the same policies were in place in the 1920s, causing the same result. They can’t escape that.

    The problem then shifts to trying to avoid a recovery under the Democrats. By the gift of gerrymandering, despite receiving a million less votes in the polls, the Republicans were able to achieve a majority in Congress, which gives them the ability to veto lots of easy solutions to the economic problem.

    Republicans caused the economic crater, they can’t tolerate the Democrats getting credit for fixing it, as they did in the Great Depression. So they have obstructed every single measure of public spending. They’ve even obstructed defense spending, preferring the draconian cuts of the sequester to enhanced defense spending even while calling for more activist military operations.

    So they block EVERYTHING. We need $3+ trillion spent on infrastructure. The money to pay for that kind of investment is at an all time low. Those kinds of projects pay for themselves, yet they block that. A decent highway bill would put another million people back to work and effectively end the recession. They won’t even do that.

    The so-called tea partiers are the chumps. These are mostly working and middle class people who don’t know that the Republican party is slitting their throats. They are nationalist. Rich republicans like immigration because it undermines wages. Poor republicans hate immigration.

    The Republican party is an enemy to the public. They are political terrorist. They are public enemy number 1.

  3. Tim
    July 4th, 2014 at 05:59 | #3

    Bush only created 1.1 million jobs if you include public sector jobs.

    As all republicans know, government jobs are not real jobs.

    If you use their standard, Bush created 0, zero (ZEER-OH!) private sector jobs during his administration. So turn the thing on its head, include only private sector jobs and Bush gets the credit he deserves.

    Also, Bush came in to office during a mild recession. So, in his own words, he wanted to say that his jobs numbers should be delayed (or shifted) by 9 months.

    After he left office he nor any GOP mentioned this again, because the crapola he left Obama was far worse than the stuff he received from Clinton.

    But either way, use their standards and it looks pretty crappy.

    My thinking is that Obama could leave office with as many as 8 to 12 million jobs created.

    When election time comes in 2016 this is the evidence confronting the average voter:

    Private sector jobs created after 8 years:

    Obama – 8 million (with no help from Republican congress!)
    Bush – 0 (Zeer-oh)
    Clinton – 20 million
    Reagan – Ancient History.

    Republicans just can’t govern.

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