“Down On America”: As Economy Improves, Republicans Remain In Denial
When Joe Biden said “I’ve never met two guys more down on America across the board,” he meant Mitt Romney and Paul Ryan — who provoked the vice president’s snipe during their debate by insisting, utterly falsely, that unemployment is still worsening across the nation. But the vice president’s complaint also applies to the Republican leadership at large, in Congress and across the right-wing media, where the talking points on U.S. economic prospects and progress are always negative.
Certainly the Republicans have tried to do their part to sink the economy, as last year’s manufactured debt crisis demonstrated beyond doubt. But whenever the news is good, they insist that the encouraging data must be inaccurate or even manipulated – as former General Electric boss Jack Welch proclaimed in his infamous tweet about the newly improved unemployment data last week.
This week the right-wing propaganda machine disparaged a big reduction in new jobless claims as a statistical anomaly, supposedly based on California’s failure to report its data to the Bureau of Labor Statistics in Washington. The only problem with this theory is that California officials did report those numbers.Meanwhile both the mainstream and right-wing media largely ignored the latest report by the Financial Times and the Brookings Institution, which found that the United States is “the sole bright spot” in a sluggish world economy.
Just how much uplifting data must appear before the persistent naysayers admit that the economy is improving? It is true that the numbers cut against their political interest, so they’re likely to deny any signs of economic health unless and until they can claim credit. Yet the signs are present and increasing.
On Friday, the Treasury Department reported that the federal budget deficit will again exceed $1 trillion, mostly as a consequence of the Bush tax cuts—but the good news is that tax revenue went up anyway by 6.4 percent, solely because of growth in jobs and income. (And in fact, the deficit was lower than last year, thanks to a reduction in government spending as American troops left Iraq.) So the president is reducing the deficit, as promised, in the only sensible and equitable way that can be done—by eliminating the cost of a pointless war abroad and stimulating growth at home.
Consumer confidence—another key indicator—has risen to the highest level since September 2007, according to a survey released today by Thomson Reuters and the University of Michigan. The measure climbed to 83.1, jumping almost five points from the August rating of 78.3. Reuters reported that the new number significantly exceeded the expectations of most analysts, “who expected the rating to drop.”
There is more almost every day. Ask the bankers, who also seem to have noticed positive indicators (when they take a break from raising money for Romney). The chief financial economist for the Bank of Tokyo, for instance, told the Los Angeles Times that even if the new jobs numbers require correction—as such statistics almost always do, “the [improved] direction of the labor market is real.”
Reporting record profits for JPMorgan Chase on Friday, Jamie Dimon released a statement saying that the housing market has “turned a corner.” His company’s investment banking unit earned more in underwriting fees for equity and debt instruments—another indicator that firms are finally putting money into plants and equipment, rather than continuing to sit on trillions of dollars.
Polls suggest that the setbacks of the past few years have left voters with little patience for White House boasts of economic progress. But recent improvements open space for President Obama to say that things are finally getting better—and that changing course toward the radical right would be dangerous and foolish.
By: Joe Conason, The National Memo, October 12, 2012
“Make Up Another Lie”: What To Do When A Talking Point Gets Taken Away
Every day for months, the attack on President Obama was the same: the unemployment rate is above 8 percent, so voters have no choice but to consider him a failure — no matter how severe an economic catastrophe he inherited.
This changed on Friday when recent gains pushed the jobless rate to 7.8 percent, the lowest rate in four years. Obama is now overseeing the best election-year improvement in unemployment figures since Reagan’s “Morning in America” re-election bid in 1984.
If you’re a Republican, what do you do? As it turns out, there are two schools of thought.
The first is, keep repeating the attack anyway, even though it’s no longer true. Restore Our Future, the Republican super PAC, expanded an ad buy this week in three swing states describing the jobless rate as “over 8 percent.” Karl Rove’s American Crossroads attack ad shows viewers an 8.1 percent unemployment rate, rather than the actual one.
Why let facts and good economic news get in the way of a perfectly good attack?
The second is the one adopted by Mitt Romney and Paul Ryan: move the goalposts. The Republican presidential hopeful is now arguing, “[I]t looks like unemployment is getting better, but the truth is, if the same share of people were participating in the workforce today as on the day the president got elected, our unemployment rate would be around 11 percent.” Ryan said the same thing this week.
Like far too much of Romney’s rhetoric, this is wildly misleading:
[The charge] assumes all things are equal in the labor force, when in fact it is constantly churning and evolving. In particular, besides the aftermath of the Great Recession, the composition of the labor force has been affected by the retirement of the leading edge of the Baby Boom generation.
Our colleagues at WonkBlog explored this issue earlier this year, showing that the peak of the labor force participation rate, or LFPR, was reached during the end of President Bill Clinton’s term and that since then it has been on a downward track…. The Federal Reserve Bank of Chicago in March estimated that just over half of the post-1999 decline in the labor force participation rate was explained by long-running demographic patterns, such as the retirement of the baby boomers.
In other words, Romney/Ryan would have you believe the sharp improvement in the job market doesn’t count because of demographic trends. That’s marginally better than simply repeating false and out-of-date attacks, but there’s no reason to take the GOP rhetoric seriously.
By: Steve Benen, The Maddow Blog, October 10, 2012
“Truth About Jobs”: The Good News That The Deranged Right Just Can’t Handle
If anyone had doubts about the madness that has spread through a large part of the American political spectrum, the reaction to Friday’s better-than expected report from the Bureau of Labor Statistics should have settled the issue. For the immediate response of many on the right — and we’re not just talking fringe figures — was to cry conspiracy.
Leading the charge of what were quickly dubbed the “B.L.S. truthers” was none other than Jack Welch, the former chairman of General Electric, who posted an assertion on Twitter that the books had been cooked to help President Obama’s re-election campaign. His claim was quickly picked up by right-wing pundits and media personalities.
It was nonsense, of course. Job numbers are prepared by professional civil servants, at an agency that currently has no political appointees. But then maybe Mr. Welch — under whose leadership G.E. reported remarkably smooth earnings growth, with none of the short-term fluctuations you might have expected (fluctuations that reappeared under his successor) — doesn’t know how hard it would be to cook the jobs data.
Furthermore, the methods the bureau uses are public — and anyone familiar with the data understands that they are “noisy,” that especially good (or bad) months will be reported now and then as a simple consequence of statistical randomness. And that in turn means that you shouldn’t put much weight on any one month’s report.
In that case, however, what is the somewhat longer-term trend? Is the U.S. employment picture getting better? Yes, it is.
Some background: the monthly employment report is based on two surveys. One asks a random sample of employers how many people are on their payroll. The other asks a random sample of households whether their members are working or looking for work. And if you look at the trend over the past year or so, both surveys suggest a labor market that is gradually on the mend, with job creation consistently exceeding growth in the working-age population.
On the employer side, the current numbers say that over the past year the economy added 150,000 jobs a month, and revisions will probably push that number up significantly. That’s well above the 90,000 or so added jobs per month that we need to keep up with population. (This number used to be higher, but underlying work force growth has dropped off sharply now that many baby boomers are reaching retirement age.)
Meanwhile, the household survey produces estimates of both the number of Americans employed and the number unemployed, defined as people who are seeking work but don’t currently have a job. The eye-popping number from Friday’s report was a sudden drop in the unemployment rate to 7.8 percent from 8.1 percent, but as I said, you shouldn’t put too much emphasis on one month’s number. The more important point is that unemployment has been on a sustained downward trend.
But isn’t that just because people have given up looking for work, and hence no longer count as unemployed? Actually, no. It’s true that the employment-population ratio — the percentage of adults with jobs — has been more or less flat for the past year. But remember those aging baby boomers: the fraction of American adults who are in their prime working years is falling fast. Once you take the effects of an aging population into account, the numbers show a substantial improvement in the employment picture since the summer of 2011.
None of this should be taken to imply that the situation is good, or to deny that we should be doing better — a shortfall largely due to the scorched-earth tactics of Republicans, who have blocked any and all efforts to accelerate the pace of recovery. (If the American Jobs Act, proposed by the Obama administration last year, had been passed, the unemployment rate would probably be below 7 percent.) The U.S. economy is still far short of where it should be, and the job market has a long way to go before it makes up the ground lost in the Great Recession. But the employment data do suggest an economy that is slowly healing, an economy in which declining consumer debt burdens and a housing revival have finally put us on the road back to full employment.
And that’s the truth that the right can’t handle. The furor over Friday’s report revealed a political movement that is rooting for American failure, so obsessed with taking down Mr. Obama that good news for the nation’s long-suffering workers drives its members into a blind rage. It also revealed a movement that lives in an intellectual bubble, dealing with uncomfortable reality — whether that reality involves polls or economic data — not just by denying the facts, but by spinning wild conspiracy theories.
It is, quite simply, frightening to think that a movement this deranged wields so much political power.
By: Paul Krugman, Op-Ed Columnist, The New York Times, October 8, 2012
“Distracting Crazy Talk”: Will Bureau Of Labor Statistics Trutherism Backfire?
Well, I had hoped for better news fare, but the BLS Truthers are kind of blotting out the sun at the moment, infecting a lot of people who should know better right along with the crazy people and the stone hacks. I’ll just quote Greg Sargent here on the possibility that this frantic effort–born, I suspect, of over-reaction to the first presidential debate, which had conservatives cackling with insane glee before the first poll came in–could actually backfire. After citing other examples of the “closed conservative information feedback loop,” Greg says this:
This latest — unemployment trutherism — strikes me as having the potential to be a bit more damaging to Romney. It’s very likely that these claims are now going to break through to the nightly news, drawing still more attention to the dropping unemployment rate.
Of course, there’s always the danger that news outlets will cover this stuff in a he-said-she-said manner, reporting on the assertions of the unemployment truthers without calling them out, thus injecting them into the discourse. But that seems unlikely. This is really out there stuff, and hopefully the networks will say so outright. If so, it’s hard to see how it’s helpful to Romney for undecided voters to be treated to the sight of fury and panic about improving economic news among those who want him to be elected president.
On top of that, of course, if the freak-out is about the BLS report distracting attention from Mitt’s Triumphant Vanquishing of the Evil Obama, then the crazy-talk is a much bigger distraction: like turning on the local news and watching the weatherman have a nervous breakdown because his forecast turned out to be wrong.
By: Ed Kilgore, Contributing Writer, Washington Monthly Political Animal, October 5, 2012
“A Virtuous Cycle”: At Least The Federal Reserve Is Not Obsessing About The Budget Deficit
With deficit hawks circling overhead, the responsibility for creating jobs has fallen by default to Ben Bernanke and the Federal Reserve. Last week the Fed said it expected to keep interest rates near zero through mid 2015 in order to stimulate employment.
Two cheers.
The problem is, low interest rates alone won’t do it. The Fed has held interest rates near zero for several years without that much to show for it. A smaller portion of American adults is now working than at any time in the last thirty years.
So far, the biggest beneficiaries of near-zero interest rates haven’t been average Americans. They’ve been too weighed down with debt to borrow more, and their wages keep dropping. And because they won’t and can’t borrow more, businesses haven’t had more customers. So there’s been no reason for businesses to borrow to expand and hire more people, even at low interest rates.
The biggest winners from the Fed’s near-zero rates have been the big banks, which are now assured of two or more years of almost free money. The big banks haven’t used the money to refinance mortgages – why should they when they can squeeze more money out of homeowners by keeping them at higher rates? Instead, they’ve used the almost free money to make big bets on derivatives. If the bets continue to go well, the bankers will continue to make a bundle. If the bets sour, well, you know what happens then. Watch your wallets.
The truth is, low interest rates won’t boost the economy without an expansive fiscal policy that makes up for the timid spending of consumers and businesses. Until more Americans have more money in their pockets, government spending has to fill the gap.
On this score, the big news isn’t the Fed’s renewed determination to keep interest rates low. The big news is global lender’s desperation to park their savings in Treasury bills. The euro is way too risky, the yen is still a basket case, China is slowing down and no one knows what will happen to its currency, and you’d have to be crazy to park your savings in Russia.
It’s a match made in heaven – or should be. Because foreigners are so willing to buy T-bills, America can borrow money more cheaply than ever. We could use it to put Americans back to work rebuilding our crumbling highways and bridges and schools, cleaning up our national parks and city parks and playgrounds, and doing everything else that needs doing that we’ve neglected for too long.
This would put money in people’s pockets and encourage them to take advantage of the Fed’s low interest rates to borrow even more. And their spending, in turn, would induce businesses to expand and create more jobs. A virtuous cycle.
Yet for purely ideological reasons we’re heading in the opposite direction. The federal government is cutting back spending. It’s not even helping state and local governments — which continue to lay off teachers, fire fighters, social workers, and police officers.
Worst of all, we’re facing a so-called “fiscal cliff” next year when $109 billion in federal spending cuts automatically go into effect. The Congressional Budget Office warns this may push us into recession – which will cause more joblessness and make the federal budget deficit even larger relative to the size of the economy. That’s the austerity trap Europe has fallen into.
Mitt Romney has been criticizing the Obama administration for not doing more to avoid the cliff, but he seems to forget that congressional Republicans brought it on when they refused to raise the debt ceiling. They then created the cliff as a fall-back mechanism. Romney’s vice-presidential pick Paul Ryan, chair of the House budget committee, voted for it.
It’s a mindless gimmick that presumes our biggest problem is the deficit, when even the Fed understands our biggest problem right now is unemployment. Yet even the nation’s credit-rating agencies have bought into the mindlessness. Last week Moody’s said it would likely downgrade U.S. government bonds if Congress and the White House don’t come up with a credible plan to reduce the federal budget deficit. (Standard & Poor’s has already downgraded U.S. debt.)
Hello? Can we please stop obsessing about the federal budget deficit? Repeat after me: America’s #1 economic problem is unemployment. Our #1 goal should be to restore job growth. Period.
The Federal Reserve Board understands this. And at least it’s trying. But it can’t succeed on its own. Global lenders are giving us a way out. Let’s take advantage of the opportunity.
By: Robert Reich, Robert Reich Blog, September 15, 2012
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