Seems to me that the tax cuts are working and this recession is a thing of the past. 288,000 jobs in April, an upward revision of March figures.
Is there another way to look at these numbers?
Job creation continues
Not really. The economy is firing on all cylinders right now. Job creation, GDP growth, productivity, home sales, durable goods, you name it - just about every key measurement of economic performance is near 20-years highs. Even the deficit is coming down faster than expected - it may be reduced by 100 billion dollars after the new tax revenues are counted.
However, this is an election year. So expect these numbers to be spun by Democrats, because they need the economy to look bad to win. So here’s the ‘talking points’:
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Jobs are being created, but they aren’t the ‘right kind’ of jobs. This is always the political fallback position when job creation numbers are better than what you need. In the 1980’s economic boom, we were told that all the jobs were ‘McJobs’ that no one really wanted but had to take because the economy was so terrible. Expect the same. It’s pretty hard to make this claim this time, because the job recovery is so broad-based. Manufacturing, services, high tech, you name it.
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When the inevitable pressure on wages and goods starts driving prices up, the fed will react by increasing interest rates. This gives the Democrats an out - they can put to rising interest rates as a sign of Bush’s ‘failure’, because the average person doesn’t understand the underlying economic issues well enough to know that this is a bogus claim.
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There is still a ‘net job loss’ in Bush’s presidency. This is completely irrelevant as an indicator of how healthy the economy is or how effective Bush’s policies are (most of the lost jobs were lost before he had a chance to put his economic package into place, and they were the inevitable result of the crash of an economic bubble), but it’s a nice sound bite they can use to bash Bush.
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Yes, but disaster is just arond the corner! This is another great fallback in good economic times, because it’s unfalsifiable. Outsourcing, deficits, illegal immigration… there are plenty of bogeymen in any complex economy that you can point to as a leading indicator of future disaster.
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Yes, but <pick your indicator> is really the most important thing, and it’s not good! Politicians are really good good at this one. John Kerry now has the ‘middle class misery index’, which is made up of a bunch of cherry-picked data points to try to show that the economy is bad. Another good one here is the ratio of rich to poor - in good economic times, the rich often benefit disproportionately. So the gap between rich and poor increases a bit and the populists jump all over it and claim that only the ‘rich’ are benefitting from good economic times.
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What economy? Let’s talk about something else!
You lose a 12-15 dollar an hour manufacturing job and replace it with a 5-9 dollar an hour service job.
Yep, that’s progress.
:rolleyes:
How can one tell if it were tax cuts, or anything for that matter, that is the cause of the economy getting better or worse?
See what I mean?
Reeder conveniently forgets that A) there is good job growth in manufacturing right now, and B) ‘Services’ includes things like IT, programming, engineering, and health care. The claim that service jobs are all 5-9 per hour is completely specious, as is the claim that all the new jobs are ‘service’ jobs, even if that were a bad thing, which it’s not.
Thats the first time I heard of IT, programming, and engineering jobs described as “service”. I’m not saying you are wrong, I certainly could have simply never heard that before, but do you have a cite?
And if they are increasing, you can call them “zucchini farming” for all I care. As long as they increase! 
Revtim said:
Oh, I forgot to list that one as one of the Democratic talking points: Oh, sure the economy is doing okay, but it would be even better if it weren’t for the disastrous Bush policies!
This one is also unfalsifiable, because A) a President really doesn’t have all THAT much power when it comes to shaping an economy, at least in the short-term, and B) The workings of the economy are complex enough that it’s tough to assign cause and effect to things like tax policy. Which of course is why there is so much disagreement on what the ‘right’ policies are in the first place.
Most serious analysts give Bush’s tax cuts some credit, based purely on a macro analysis of the effects of an injection of a few hundred billions of dollars into the economy. Maybe .5%-1% of the current 4.5% GDP growth could be from tax cuts, and a similar amount from deficit spending. Both are economic incentives in the short term. But there’s enough dissent among economists to make this tough to pin down.
Nonetheless, when the economy was doing badly, the Democrats were more than happy to lay the entire problem at Bush’s feet and claim that it was all his fault. Now that it’s doing very well, Bush gets the credit, at least from Republicans. That’s how politics work.
Don’t put words in my mouth. I stated my question as plainly as possible, and even said “or anything” and “better or worse” to try and avoid this partisan bullshit. Yet you still found a way to see it as a “Democratic talking point”. :rolleyes:
Oh piffle. Do we get to blame the tax cuts for the fact that the number of jobs out there as of now is still less than when Bush took office and less than when the recession started in March 2001? That the dollar is substantially lower, or that the level of government debt substantially higher and rising at a far more rapid rate than when he took office, and all that debt has not bought one single net new job? Indeed, that it has, by the evidence, destroyed jobs? That he would have to have one and a half million more net new jobs by Jan 2005 in order to break even on his first term? That this mere whiff of job creation has been enough to make the 10 year Treasury note rise to 4.766% as of right now already, thereby proving that if the economy does continue on this path, which would just be a normal path by the way, real interest rates will in fact be much higher than normal, just as predicted when government debt is forced up by stupid policies? Do we get to say that? Huh?
If that counts as a successful economic policy, I’d hate to see what a failure looks like.
Here is one liberal willing to concede that the tax cuts had some effect in improving things. How much effect and whether that was the most effective way to stimulate the economy is another question. But yes, they did help and things are looking better.
Any chance conservatives will show a willingness to repeal them now that they have done their job?
Well, it depends on the context. The ‘official list’ of service occupations at the Bureau of Labor Statistics lists programming and IT under ‘Professional and Related’, not ‘service’. The ‘service’ jobs are things like Police, flight attendants, nurses, firefighters, along with the more low-paying services like food prep workers and groundskeepers.
However, for the purposes of job creation statistics, multiple categories are often lumped together so that ‘services’ includes professional services. Often the data is broken down into “Farm/Nonfarm”, “manufacturing/non-manufacturing” or other aggregate comparisons.
If you want detailed data, you can go to this page, from which we learn that in the ‘Information management’ subcategory there were 8,000 jobs created in the first four months of the year. In “Professional and Business Services”, which includes programmers, there were 201,000 new jobs created in the first four months of the year. There were 37,000 manufacturing jobs created, and 494,000 ‘service’ jobs. But remember that the differences are much closer in percentage terms, because we’re starting from a pool of a little over 14 million manufacturing jobs, but over 108 million ‘service’ jobs. So as a percentage of total workforce, manufacturing job increases were only slightly below ‘service’ jobs.
BTW, if you use the list to pull up the average hourly wages of each sector, you’ll see that A) wages are increasing pretty much across the board, and B) ‘Service’ jobs don’t make substantially less than ‘manufacturing’ jobs, and if you include professional services the average hourly wage is significantly higher than the manufacturing sector.
I ask again: how can one tell what is the cause of an economic improvement (or worsening for that matter)?
I am asking this as an economic question, not a political question. Please, can somebody answer this without partisan bs, or assuming a partisan bias in the question?
Economics is a black art to me. Beyond simple supply-and-demand, it’s a mystery to me.
Excellent question, Revtim. Allow me to duck it by qualifying my remarks by stating that it seems to me that things are slowly improving and that if we are coming out of the recession I wonder if conservatives will abandon the tax cuts.
OK, NOW I’ll say something partisan. It seems that conservatives are always for tax cuts, regardless of the economic situation. That’s not to say they might not be a good idea sometimes, or maybe even most times (I repeat, it’s a mystery to me). But that always seems to be part of the platform, regardless. So I doubt they will ever abandon tax cuts, if they can help it at all.
Pantom said:
First, I’d like to thank you for repeating pretty much every bogus claim I said opponents of Bush would make. A+ for effort.
Now, on to the specific points:
First, the recession started in the third quarter of 2000, before Bush took office. Second, jobs bottomed out in January of 2002. If you look at the data, you’ll see over 3 million jobs lost between Sept 2001 and Jan 2002. Does anyone remember what happened in September of 2001? Let me refresh your memory: Over a trillion dollars lost in economic output due to 9/11. The airlines saw huge drops in travel, consumer confidence took a dive, business investment came to a halt as we tried to figure out the scope of the new threat, etc.
Since that time, about 1.5 million jobs have been created.
It’s not clear at all how much effect Bush had on this. I think those job losses after 9/11 would have happened under any president, and as the economic situation returned to normal most of those jobs would have come back under any president.
If you want to lay blame/credit at the president’s feet, then it makes more sense to credit him for the jobs created than for the jobs lost, simply because whatever economic plans he has have had more time to take effect, and the economy reacts to input very slowly.
How do you know? How do you know that job losses wouldn’t have been much greater without the deficit spending? That’s probably the case, you know. Deficit spending is an economic stimulus in the short term.
The dollar is substantially lower in part because it should be. The U.S. was maintaining a ‘strong dollar’ policy which was of debatable value, and a decision was made to let the dollar float lower. This has the advantage of lowering the cost of American goods on the world market, and stimulates exports. Not clear at all if the current level of the dollar is a good or bad thing.
You have a cite for that? A reputable study that shows deficit spending cost jobs?
Geez, over 600,000 new jobs in two months is a ‘mere whiff’? Tough crowd.
As for treasury rates rising, this is no surprise. The fed was worried about deflation for the longest time, and held interest rates at historical lows. Now there are signs of wage inflation due to rapid job creation, increases in material costs, energy costs are skyrocketing, etc. As a result, the threat is now inflation instead of deflation, so the fed is going to choke the money supply with higher interest rates.
I know this is tongue in cheek (at least I hope it is), but I can point you at lots of failed economic policies if you need help. The Smoot-Hawley tariff, “Whip Inflation Now”, wage and price controls, various protectionist measures, rent controls, 70% tax rates… The world is full of examples of failed economic policies.
Fine, so 288,000 jobs were created in April. Shall one assume that to mean there is a net gain of jobs in April? Or just the new jobs that were created without addressing the jobs lost in the month?
Also, what is the minimum number of net jobs gained in any month just to keep the economy at an even keel? I’m not sure if I read it on the SDMB or somewhere else, but a figure of 100,000 to 125,000 jobs created every month is required just to keep the economy neither growing nor shrinking. Now if this factoid is accurate, and assuming the April figure is a net gain, then jobs/economic growth amounts to only 188,000 jobs created.
So if the Labor Dept says 867,000 new jobs were created in the past eight months, how many old jobs were lost? What is the actual net gain/loss? Again, if we assume 100,000 jobs need to be created every month just to maintain the economy, actual jobs growth was only a crappy 67,000 jobs the entire eight months out of almost 300 million people.
Well, the DOL reports the employment-population ratio is unchanged. So to report 288,000 jobs created with the ratio remaining constant, does that not mean there are job losses not stated in the press releases?
Lies, damned lies and statistics. In laypersons terms, what are the real job figures and not what we are directed to read only in the headlines?
Well, if you’d read the cites I linked, it shows that the 288,000 is a NET GAIN. And last month’s 308,000 figure has been revised upwards to 347,000. These are net gains. In other words, the work force increased by those numbers.
You’re confusing gains/losses with the unemployment rate. You can have a net gain in jobs and an increasing unemployment rate, if the level of immigration and new entrants to the work force is greater than the gain in jobs.
Last month the unemployment rate decreased from 5.7% to 5.6%.
Only Sam Stone would add the average professional salary to a burger flipper at BK’s salary and say see! Service jobs pay almost as much as manufacturing.
Give us a break Sam.
And Sam? You have to subtract the required jobs from total jobs to get job growth.
Unless you have a cite which breaks down service jobs by sub-sector, then your claim that the new jobs are ‘burger flipping’ jobs is irrelevant. The data we have is for the whole category, and that category includes jobs like nursing, professional secretaries, etc. And the average wage in that sector is pretty much the same as the manufacturing sector.
So YOU are the one playing games with the data if you are makign the claim that service jobs == burger flipping.
But if you have a good cite showing which services jobs grew, I’d be glad to read it and be a bit more precise.
Huh? Job growth means (drum roll) more jobs. Why is this so hard to understand?
Oh, and what are ‘required jobs’? Required for what? For every human to have a job? To meet the needs of the economy? What?
And why do I have to subtract them from anything? If I employed two people yesterday, and three today, that’s a net job growth of one. Why should I have to subtract or add anything to that number to make the claim that I created a job?
Or are you saying that if I create a new job, but two people move into town and are looking for work, that somehow we’ve had ‘negative job growth’? This makes no sense. What we have is a higher unemployment rate in my town, which changes the fact that I created a job not one iota.
I type this slowly so you will understand Sam.
There are approximately 150k people entering the job market every month. These are not people who had jobs and lost them. These are first time job seekers.
You with me so far?
So just to keep even there needs to be 150k jobs for these people.
Still there?
So the 150k jobs are needed just to keep the jobs even.
Am I right or wrong?
Now any thing above that can be counted towards replacing jobs lost.
Once we get all the jobs lost replaced then you can start counting new jobs created.
Understand?