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Jewish World Review Jan 20, 2012/ 25 Teves, 5772 A smiley face on ugly reality By Jack Kelly
http://www.JewishWorldReview.com |
Since 1960, four presidents have run for re-election in years in which the unemployment rate was more than 7 percent. They were Gerald Ford in 1976 (7.8 percent); Jimmy Carter in 1980 (7.5 percent); Ronald Reagan in 1984 (7.2 percent), and George H.W. Bush in 1992 (7.4 percent). Only Reagan won.
So the old conventional wisdom was that if the jobless rate is more than 8 percent on election day, the president is likely to join the ranks of the unemployed.
Measured by that yardstick, Barack Obama would be in big trouble, so his friends in journalism searched for ways to depict his electoral prospects more favorably.
When the Bureau of Labor Statistics reported Jan. 6 the unemployment rate fell from 8.7 percent in November to 8.5 percent in December, they found what they were seeking.
"Jobless numbers good for Obama," said USA Today. "Falling jobless rate is good news for Obama," agreed the Washington Post.
The decline "looks like a job security bonus for President Barack Obama," said Jim Kuhnhenn of the Associated Press. It undercuts "Republicans' assertions that his economic policies have failed," he said.
According to the new conventional wisdom, the number of people without jobs matters less in politics than whether the unemployment rate is going up or down. On what basis is that assertion made?
"Going back to 1956 no incumbent president has lost when the unemployment rate fell in the two years leading up to the election," noted Paul Wiseman, the economics writer for the AP.
That's true, but the two year time frame is arbitrary. The trend in the year before voters go to the polls would seem more relevant. And many judge a president by whether things have improved or deteriorated since he took office.
But these measures don't show what Mr. Wiseman wants you to see. Unemployment fell in the year before President Ford sought re-election, but he lost anyway.
The jobless rate rose significantly during the terms of Presidents Carter and Bush. They got creamed, which fits nicely with the new conventional wisdom. But the unemployment rate when Barack Obama took office (7.7 percent) was much lower than it is now, a fact to which liberal journalists do not wish to call attention.
The decline in the jobless rate is good news, but not nearly as good as it is being spun. It happened mostly because people who can't find jobs quit looking for work. In the unemployment measure journalists report (U3), BLS doesn't count discouraged workers.
Since 2008, the number of Americans of working age increased by 7.2 million. But since Mr. Obama has been president, the labor force has shrunk by 349,000. If it were the same size as when he was inaugurated, the unemployment rate would be 10.9 percent.
Or higher. The BLS has a broader measure of unemployment (U6) which includes some discouraged workers, and also includes those who are working part time, but who want to work full time. In December, the U6 unemployment rate was 15.2 percent.
Or much higher. The BLS counts in U6 only those it considers "temporary" discouraged workers. If all discouraged workers were counted, and if the BLS still calculated unemployment the way it was done before 1994, the jobless rate would be 22.7 percent, according to Walter J. Williams, an economist who runs "Shadow Government Statistics."
The decline may not last. Of the 200,000 jobs added last month, 40,000 were temporary hires. Most of the jobs lost during the Obama years paid better than the jobs added.
The recession ended officially in June of 2009. But the economy's been growing at only half the rate it averaged during recoveries from the 9 previous recessions since World War II.
Two years after the Obama "recovery" began, 300,000 fewer people had jobs than when it started. Mr. Obama's regulatory binge is the chief reason why this recovery is "jobless," say business leaders, including former Obama contributors. New EPA regulations alone may destroy 1.65 million jobs.
In the first 24 months of the Reagan recovery from a more severe recession, employment increased by 7.2 million.
By manipulating statistics, Democrats and journalists put a smiley face on ugly reality. But the unemployed know how few jobs there are.
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JWR contributor Jack Kelly, a former Marine and Green Beret, was a deputy assistant secretary of the Air Force in the Reagan administration.
© 2011, Jack Kelly |
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