A couple of interesting reports on the job situation below.
(P.S.) Pay attention Sam!
manhattan: . Among the most glaring (and I’ll be extremely charitable to jobwatch) errors in that report is that it referrs to a CEA paper on the President’s proposed economic plan, not the one which was enacted. The enacted plan was half the size of the proposal, and had a notable difference in the treatment of dividends paid from retained earnings – 15% instead of 0.
Good point, but are you suggesting that the predictions would have been significantly more accurate if the proposed plan had been accepted as it stood? We’re talking millions of missing predicted jobs here.
That said, the CEA report isn’t without its own faults. The main one is the one that pretty much everyone has made – that the economy could grow at the rate it did for as long as it did without new jobs. Essentially, everyone underestimated the amount of productivity which could be wrung out of the system by businesses scared to hire.
Really? There was a BusinessWeek article in February 2003 predicting precisely that productivity would grow while cost-cutting would continue:
So I’m not sure that the prospect of continued “jobless growth” over the last year+ was such a surprise to everyone besides the CEA as you seem to think.
SS: What is it with you people and your snide tempers? Just can’t have a discussion without working in the cheap shots, huh? Sucks to be you.
Um, who exactly are the “you people” you’re talking to here? Way I read it, it was only Reeder who made an uncalled-for snide comment (or two if you count his remark on Brutus’s sig), while Gorsnak, pantom, iamme, jshore, I, and the rest of “us people” have been spending the last several dozen posts arguing the issues in compliance with GD etiquette. If you’ve got issues with Reeder’s remark, please take it up specifically with Reeder; if you’re complaining about the behavior of other posters as well, please point out specifically what you’re objecting to. Thanks.
Not to beat a dead horse too much but your original post said:
While this statement does imply a certain amount of uncertainty and recalling from memory with the “I think”, the “I think” does not by my reading apply to the first sentence. In fact, by my reading, it doesn’t even seem to apply as written to the “that’s about it.” Rather, it seems to apply to the statement about Japan and Luxembourg.
Of course, I’d have been willing to let this whole thing drop if you had just admitted that your memory was wrong on all this, rather than falsely accusing me of “twist[ing] statistics” and cherry-picking data.
…which, ironically, is the one thing you were right about in those two sentences.
Won’t even read this thread beyond this post. May 12th and went from unemployed to a full-time job with awesome benefits. Well over even the “high-end” wage you quoted. I’m happy as shit in a liberals head.
Now off to read the rest the thread. I have a job and will pay less taxes than 3 years ago!!! Yes!!!
Congratulations on the new job! Good on you!
Regards,
Shodan
A quick re-scan through this thread revealed this extraordinary comment. Despite the personal abuse there (something you yourself piously decry later on in this very thread, very amusingly I might add), you failed to notice that we are, once again, referring to the OMB’s conclusion that the recession *ended * - yes, ended - in November 2001. To repeat slowly, it started well *before * 9/11, and *ended * two months later. If you’re going to assert any effect of 9/11 at all on the recession, it would have to be a *beneficial * one. Yet you’re not only claiming the opposite, but asserting that anyone who disagrees should be institutionalized?
I’ll offer you a possible out - the “official” data from any source on what does or does not constitute a recession does not give a complete enough picture to conclude diddlysquat, and neither do raw unemployment numbers. Might as well acknowledge that “for your own good”, if that’s what you mean. If it isn’t, then stand and deliver.
Kindly cut the shit and limit yourself to facts and reasoning in the future, for what would be a very welcome change.
“I love compliments, all of us do - humorists, burglars, Congressmen, all of us in the trade. Why, I could live for a week on a single compliment! But I was struck near speechless by this complimentary thunderbolt! Never have I heard a compliment so well phrased, or so richly deserved.”
- Mark Twain
While this is true, it doesn’t necessarily follow that the 9/11 attacks did not have a negative effect. What 9/11 did was shake consumer and business confidence, plus it did serious damage to a number of specific industries. So, while the recession did in fact end by then, the attacks may have halted the recovery. I don’t know if you remember or followed it at the time, but in 2002 there was much worry about the attacks causing a ‘double-dip’ recession. Business investment was very low. In fact, one of the things that may have contributed to the very high productivity increases (as high as 8.2% a couple of quarters ago) is that businesses were not hiring permanent employees. Many economists think the ‘jobless’ part of the recovery was due to the increased uncertainty of further terrorist attacks. When you’re not sure what the future holds, you try to make do with the employees you have, or hire temporary workers that can be eliminated easily from the payrolls if the economy takes another dive. I know my company did this - every financial overview meeting I attended emphasized uncertainty and risk avoidance.
But now we’ve pretty much wrung all the added productivity we can get from the current workforce, and confidence in the recovery is rising, so in the last few months our company has been hiring like crazy. So while the recovery was ‘jobless’ for quite a long time, rising productivity through the whole period may mean that when the dam breaks and companies start hiring the job creation numbers may be very good.
But seriously folks…
I have little to no faith in “economics”. To be fair, that may be because I don’t understand economics. But as a science, it leaves a lot to be desired.
You and I can argue about the boiling point of water. But we can take a flask and a Bunsen burner and a thermometer and the truth will be shown.
In economics, however, any opinion you could cobble up, in your wildest imagination, will have an adherent with a Ph.D. and a presumption of expertise. The classic example is the Laughable Curve, which purported to show how tax cuts generated more revenue. A thesis entirely understood by The Ron and enthusiasticly sketched out by him on any number of scrap pieces of paper.
I tend to agree with those who state that this approach was a disaster. Which stance is sneeringly rebutted by persons who disagree with me about everything else as well. Post hoc!, they cry, just because something happened after doesn’t mean it happened because. And the point is well taken.
But isn’t that just about invariably the case? “Clinton started the recession!” “No, the economy boomed because of Clinton!” “Liar! Clinton merely reaped the benefits of The Ron’s brilliant economic theory!” “You mean the one that got us a gazillion dollars in debt!” And so on, and so forth.
I have seen precisely these arguments herein, and every so often we repeat them to each other, to no noticeable effect. So, I propose to abandon the economic argument in favor of the moral and political arguments.
First: it is immoral and unAmerican to favor the rich unless the economic benefits to the nation of such action can be proven. As they cannot, it remains immoral. If you could prove, beyond question, that a bit of harmless belt-tightening amongst the unwashed in ungated communities would unfailingly benefit the Republic, you would have a case. Since you cannot, you do not.
A similar rationale applies to inherited wealth. It is my opinion that the American experiment in human liberty depends, at least in part, on a rejection of the notion of inherited status, the notion that choosing one’s parents is some indication of one’s native value. (Most of us, it appears, have done a rather poor job of it.)
In America, money isn’t the main thing, its the only thing. Money is status, value, virtue and power. Eminem and the heirs of Dr. King share that value and virtue, the natural nobility and elan that comes when your banker holds you in high esteem. As the political philosopher Will Rogers remarked: “Being poor isn’t a crime, but it may as well be.”
But the problem isn’t “capitalism”, because capitalism is a mechanism, not a philosophy. It is also necessary, at bottom because projects that would benefit the Commonwealth will not be launched without credit, and credit cannot exist without return, without profit. There isn’t anything wrong with how we get the money, the problem is what we do with the money. Mostly, it gets squandered on shiny, noisy crap while our children (and they are all ours) are shuffled off to shabby schools for mediocre educations.
Political change without moral change is empty, pointless. The American system will work perfectly well when the American people are tolerant, generous, and mutually supportive. Failing that, no system of laws can suffice, money finds a way around law, law is futile and impotent in the face of the raw majestic power of money.
Fearless Misleader says that Jesus Christ is his number one political philosopher. Such a pity that The Boss’s economic policies were overlooked.
While the attacks certainly had negative economic effects, they had positive ones too. Namely, they sparked a lot of spending on defense and security, on cleaning up the World Trade Center area, etc. That is the irony of economics…bad things like terrorist attacks, wars, disasters, or oil spills can lead to an increase in certain economic activity and thus translate into increases in GDP and jobs. After all, I believe it was WW II that finally pulled us fully out of the Great Depression. (One might claim that investing more on these things has to come out of investing somewhere else. However, there are two important facts here, one being that the government can use deficit spending and the second being that the very definition of a recession is that there is underutilized capacity. In fact, the higher unemployment represents underutilized human capacity.)
I haven’t seen a good analysis that tries to weigh all the positive and negative effects on the economy. However, I think it is important to not give just one side of the story.
Go to http://www.contraryinvestor.com/mo.htm, read the current report and then look through the archives at the bottom.
Did you read post #81. Were you not able to understand what was being said? The job numbers that are being reported are mostly statistical aberrations. And many of the “real” jobs that are being created are in the defense industry. Which will likely suffer if Bush stays on his commitment to turn Iraq over on June 30th. Unless of course, you are anticipating further forays by the USA into say, Syria, Iran, Pakistan or North Korea.
I don’t think it’s fair to take on Sam for this. Statistical aberrations, if such, happens, but it evens out over time. And US is not pulling out June 30th, the administration has already acknowledged that they will still be in “complete control” after this date.
More interesting to add together the number of jobs necessary just to keep up with population growth, then add the number of jobs lost since January 2001, then put that multi-million number next to Bush’s total jobs created - and add a note about all the money that has been injected into the economy through the deficit.
I once saw a graph about jobs created under every president since 1952. The few Democrats outperformed every Republican. Add that one too.
Don’t try to turn around your error on me – I said specifically that the CEA report wasn’t without it’s own faults. In fact, you even address the big glaring fault I talked about. So WTF? What I’m suggesting is my “good point” established beyond doubt that the entire factual basis for that part of your post was entirely useless – the result of, at best, negligence so extreme that the cite’s site’s owners should be grateful that government agencies don’t have standing to file libel suits. I’m suggesting that as a result of you choosing to believe those guys and your failure to follow the backup documents, you made a false assertion. I’m suggesting that a person who wished to maintain a reputation for intellectual honesty might want to apologize before further hijacking the thread and trying to turn it around on the person who pointed out the error.
Yes, really. First, I said “pretty much everyone,” not “everyone besides the CEA” and I’m getting fuckin’ tired of people misquoting me by leaving off important modifiers.
That said, let’s examine the article – it was a good one. Unfortunately, your ability and/or willingness to interpret it declined in direct proportion to the quality of the cite.
I’ll be darned. Plenty of people? Heck, I’d venture to say more than plenty. In fact, I’d say, well, pretty much everybody. Compared to the gains seen, pretty much everybody includes a lot of the people quoted in the very article!
(emphasis added)
During 2003, non-farm productivity increased 4.2%. Not “2% or more,” but 2% and a lot more – another whole 2% and then some. Not “between “2% and 2.5%” of the (possibly still accurate, as the long-term hasn’t happened yet) long-term estimate. 4.2% Please note that I have nothing whatsoever bad to say about Mr. Varvare – in fact, if he’d make his 2000 report on productivity in the “new economy” available for free, I’d consider coughing up the $300 for a 2004 update. But his early-2003 bullish outlook was wildly insufficiently bullish.
(emphasis added)
Pretty smart guy, that Dr. DeLong. But during the second year of this recovery, productivity grew at 4.2%. Which means that either the 2003 number beat his expectations or he will want to raise his longer-term estimates. Again, I have nothing bad to say about Dr. DeLong. His estimates are entirely reasonable, but turned out low for 2003.
Now here’s a really smart guy (if you ignore all those landfilled routers). As it happens, he was not among “pretty much everybody” – he was more optimistic and so far he’s looking right. But wow! If he continues to be right, and if the big gains occur at the start of his seven to nine year window, 2003 saw the biggest productivity gains from investments made in 1996 (at least as involves investments in the kind of stuff he’s talking about). Heck, many companies hadn’t even overhauled for Y2K yet – SAP and those guys sold an awful lot of systems in 1997, 1998, and 1999. And yet he’s looking at long term rates of 3% to 5% productivity growth. I don’t know if he adjusted that long-term number up after 2003’s productivity growth or if he shortened the window or what (personally, my survey of CEO’s and CIO’s is showing the window shortened – an awful lot of companies used the time they had not making products and acquiring each other willy-nilly to learn to use those overpriced toys they were complaining about in 2000 and 2001). Either way, smart guy, but not the consensus – I imagine that’s why BW spoke to him whilst writing a good article bucking the consensus.
It did decline, and I guess one might argue that it was “sharply” – from 4.9% to 4.2%. Heck, it was undoubtedly a sharp decline compared to the peak “lofty levels” of 2002, even if one were to argue that the decline was fairly slight compared to the whole-year number.
Over the two years, the annual rate was 4.5%, a two-year rate not seen since the Truman administration. (And to make certain that my rhetorical device is not used improperly, neither Truman nor Bush was “responsible” for the productivity growth and neither can take credit for it, nor can their predecessors, nor can their successors be blamed for any subsequent decrease).
I read post #81 and I was able to understand what was being said. The birth/death rate is not a “statistical abberation,” it’s an estimate. Over time, it’s a pretty good one.
To be fair, I worry a lot about the birth/death rate – it’s one of the things they pay me to worry about. In fact, in an earlier thread on BLS I expressed concern about it – that some people think the model tended to underestimate job losses during recessions and underestimate gains during expansions because the model is off.
During 2003, I was wrong – my concern was misplaced. The 2003 benchmark revision of the model, which BLS released during February, was tiny – 122,000 jobs (downward, as it happens). That was a damn nice job – a third of the historical average revision, and even the tiny revision was directionally different from my concern.
So far during 2004, revisions to prior months’ employment reports have been up, not down. That would indicate that perhaps the birth/death rate model isn’t picking enough new business births so far.
To be fair, it could change during April, or it could even have been high during prior months, with some other factor accounting for the upward revisions – it is an estimate after all. But I’d suggest that the available evidence is that it’s either good or low, not high.
As regards the war, a lot of the jobs are indeed occurring in defense-related industries. But I don’t see any evidence that the gains are in excess of the overall defense budget’s total contribution to growth – remember, defense expenditures have been high and economic growth has been high for quite some time now without the jobs coming.
Anecdotally, some of the manufacturing increase may be disproportionately defense-related (DoD is looking for a second source for bullet manufacturing, for example, because the current contractor can’t keep up). But as someone in this forum said, the plural of anecdote is not data.
It was my choice of words to use “statistical aberration”. A better term might have been “statistical adjustment”. We’ve had a number of threads here that delved into BLS methodology. You’re right that much is estimated and might I add extrapolated. The problem as I see it is that much of the media and certain people try to use these job figures as stand-alone numbers. So we get headlines like 600k odd jobs created in the last 2 months. All is good. The administration (whomever happens to be in power) knows better, but if the numbers work to their advantage, they jump on board to spin them further and rubber-stamp past policy decisions. Furthermore, a bone I always pick with the BLS numbers is that they don’t report on the QUALITY of jobs that are created. A part-time job serving hamburgers counts the same as a full-time job bringing say, biotechnology products to the market. From the long-term view, the latter job is worth a lot more to the future of the economy than the former.
I’m not sure what you are saying regarding defense jobs. From the 2nd article, near the end, I quoted the following (below). I’m not sure why you feel that “Anecdotally, some of the manufacturing increase may be disproportionately defense-related”. It says that in the 1st quarter of the year, defense work accounted for nearly 16% of the economic growth despite being just 3-4% of the economy.
Also I didn’t post the whole article. You have to follow the link to read everything. From further into the article:
Defense spending is subject to quick cuts when/if this war winds down. Any jobs gained because of the war could be quickly lost. If defense jobs are contributing disproportionately to the monthly job statistics, then the mantra that I hear from so many talking heads, the media and a variety of uninformed individuals that the economy is on the mend is incorrect.
i don’t know if this has been said.
what is often used by republicans is called supply-side economics, so the tax cuts are for the rich. this, however, is in hopes that the affluent will invest the money into new markets, thus creating new jobs. this is called the trickle down effect by critics. i certainly think that giving money right to those who need it will help, but both have down sides, as middle class tax cuts will often cause people to save the money, thus not producing economic growth.
manhattan: I’m suggesting that a person who wished to maintain a reputation for intellectual honesty might want to apologize before further hijacking the thread and trying to turn it around on the person who pointed out the error.
Yikes. manny, I apologize for the misleading info in the link, and I apologize for giving the impression that I was trying to “turn around” the error on you. We cool? What I was trying to get at, and what I think MMI’s post confirmed, is that the Administration has been consistently way off in their own predictions about what tax cuts would do for job growth. I think that’s still a quite justified observation, despite the admittedly serious error of comparing the CEA’s predictions about the proposed cuts to the performance of the enacted cuts.
First, I said “pretty much everyone,” not “everyone besides the CEA” and I’m getting fuckin’ tired of people misquoting me by leaving off important modifiers.
Well, if you’re nitpicking, you first said “pretty much everyone” and then “essentially everyone”:
It seemed to me that that Feb. 2003 BW article (and I always thought BW was a fairly mainstream source of business/economic opinion, not one of the outliers from “pretty much everyone”) was indeed looking to see more productivity growth over the past year without relaxation of the corporate cost-cutting that kept payrolls lean. If I’m understanding the rest of your comments correctly, you’re right that even the folks cited in that article still underestimated productivity growth. But they don’t seem to have been overestimating job growth.
SS: *But now we’ve pretty much wrung all the added productivity we can get from the current workforce, and confidence in the recovery is rising, so in the last few months our company has been hiring like crazy. *
? I thought you were Canadian—is yours an American company, or are you just saying that the Canadian and US economies are so tightly linked that your company’s hiring policies in Canada are a reliable guide to US economic developments? (If the latter, I don’t know where that leaves your frequent claims that comparison of US and Canadian economic performance demonstrates the superiority of the US system, because you now seem to be saying that it’s essentially all the same system.) Clarification welcome.
Kimtsu: I work for an American conglomerate. In fact, it’s the largest company in the world.