January Jobs Caps Off President Obama's First Term
The reference week for the January jobs report falls before the end of President Obama’s first term so this BLS report caps things off for him. There were 157,000 new jobs added in January while November and December were revised to 247,000 and 196,000.
This release also contained revisions to further months which is part of an annual process. The tentative total for jobs during President Obama's first term in office is now 1.2 million new payroll jobs. December is still subject to one more revision and January subject to two more so that number could go up or down.
It can't be said enough that when President Obama took office we were losing an average of over 700,000 jobs a month. In the first 12 months of his term 4.3 million jobs were lost. In the final 36 months 5.5 million jobs were added. That turnaround is one of the reasons President Obama is still President Obama today as he continues kicking off his second term. A million more Americans are back to work under his leadership and millions more will return in the next four years.
Unemployment ticked up slightly this month and it looks like it will be a long journey from 7.9% to anywhere under 6.0% where it needs to be. The kind of sustained improvement that will finally drive down unemployment will take a continued recovery of housing and steady job growth that will build confidence in the recovery over the next two years. Avoiding any more setbacks along the way would be nice too.
GDP growth was in the red for the first report of the fourth quarter of last year which has folks talking recession again. Overall though the consumer components of that GDP measurement look strong and we're seeing encouraging signs from residential investment and other consumer spending. As of right now there is no indicator that a recession is happening now or in the near future. We probably won't be in a recession this year unless we come upon some unforeseen factor.
We can't legislate fixes for the core weaknesses in the economy or this recovery and there's no one left to blame anymore. We can only wait it out and not make things worse along the way. Battling over taxes and debt limits hurt us last year and could hurt us again this year if we're not careful. The right lives in a fantasy world where we should deal with this debt level even if it causes another recession.
So far the Democrats have prevented the worst of those ideas from becoming policy. We'll have to wait and see if they can hold them off for good. In the meantime I'll settle for this steady improvement month to month. It would be nice to see about 3 million new payroll jobs this year. That would be a good start. We'll need to pick up the pace to get there.
Posted by Adam Ducker at February 1, 2013 8:33 AM
There were 157,000 new jobs added in January
Revised for the usual book cooking it’s more like 57,000. And how many of them involve the question “Would you like fries with that?”
Bozo is taking credit for his failed policies being the reason for the very slow recovery of the economy. The fact is his failed policies are causing the recession to last longer than it should.
It ain’t Bozo’s performance in office that got him reelected. If voters were paying attention to his first term he’d be on the outside looking in and Dingle Berry would be President. Bozo was able to lie better, and promised more pie in the sky than Dingle Berry.
Ron Brown: “Revised for the usual book cooking it’s more like 57,000.”
Don’t just pull numbers out of your butt so you’ll have an excuse to call the president names.
“The fact is his failed policies are causing the recession to last longer than it should.”
And stop your myth making about the recession. It’s over. It’s been over for three years.
Record number on government assistance programs.
Cut in pay.
Private orgs having massive requests for aid.
Food prices constantly rising.
High fuel costs.
Losing employer benefits.
Working fewer hours.
Taxes going up.
The recession may be over on paper, but it is still being felt by millions of real people.
Throw in the continued assault on individual rights and any objective mind can see that things are only going to get worse.
Kctim: “The recession may be over on paper, but it is still being felt by millions of real people.”
That’s how recoveries work though, right? This hasn’t been a strong recovery. The damage was too deep and lasting and the nature of the recession (the ruined housing market) is the very cause of the weak recovery.
“…and any objective mind can see that things are only going to get worse.”
I don’t agree, but I’m sure you’ll say I’m not objective.
As of right now, the Dow Jones is just over 14,000.
Thanks for writing these articles, Adam. I look forward to them. It’s a good report, and part of the continuing trend of recovery. I wonder, decades from now, if this recession will be referred to as a depression. While it’s obviously not as bad as the Great Depression, it’s also obviously far worse than anything most of of have ever experienced. The damage done to the economy was deep. Housing has only recently recovered. But we’re on the right track, and every one of us can be thankful we did not have to live through a second Great Depression. The Obama administration deserves a lot of credit. I’ve yet to hear anyone express any better ideas on how it could have been done, even with the benefit of hindsight.
Doesn’t matter if that is how they work or not, the fact is that most people are still living in a recession. Telling them that they aren’t, that it will all be better in a few years or that it’s all the Republicans fault, doesn’t change anything for them.
Other than numbers, what leads you to believe things are getting better? None of the things I listed above are going to change anytime soon.
Deserves credit for what phx8? High unemployment more people on food stamps then ever, 17 trillion in debt? Yea he’s doing a bang up job. What could have been done from the get go is go through all spending and cut what is unnecessary, go through the regulations and ease them or cut out what is unnecessary. He should have worked on the economy instead of H.C. That could have been worked on this term if the economy improved enough to do H.C. That’s just my opinion.
kctim: “Doesn’t matter if that is how they work or not, the fact is that most people are still living in a recession.”
I wouldn’t say most people, but some people are still feeling the pain, I agree. What else can we say but it will get better?
“Other than numbers, what leads you to believe things are getting better?”
Isn’t that a trick question? The numbers are a pretty clear indicator. But if you believe that our best days are behind us, that our economy will never be strong again, and our country is headed off a cliff, then I guess that changes your view of every day things.
I don’t feel that way. Our economy is strong and getting stronger every month. I wish we had faster growth, fewer unemployed, less debt, etc., but there’s literally nothing we can do to stop that that wouldn’t damage our fragile recovery. We just have to wait and do no harm in the process through political games.
KAP: “That could have been worked on this term if the economy improved enough to do H.C.”
We all know that if they hadn’t focused on healthcare there would never ever be a bill and the economy would be in the same shape it’s in now or worse. Thank God the Democrats had the courage this one time at least and the foresight to understand that and to do what needed to be done.
The kind of things you propose in cutting spending and waste is the worst kind of way to deal with the crisis. The federal government is not a household budget and we can’t just eat rice and beans for a while until things get better.
Na, wasn’t meant to be a trick question at all. People define these numbers based on who is President, not real life, and I was just curious about real life changes that you see as positives.
With prices going up on everything the way they are, the ever increasing tax burden and the further encroachment of government into how our personal lives are ran, are all going to have a negative impact on our economy. What is it that makes you believe otherwise?
kctim: “What is it that makes you believe otherwise?”
I don’t think those things have as large an impact on the economy as you think they do. Some are largely side effects of a weak economy, not the cause. They will not be as big of a deal once the economy has improved more and unemployment is lower.
Adam, I can respect your opinion and rosey outlook. I hope you are the one who is right.
As for me though, while prices and taxes are not the cause of this weak economy, they will play a huge factor in why we do not return to what we once had.
Sure enough, big day for the market after the good employment report- DJIA 14,009!
Few people dispute the need to address the question of deficits & the national debt. The critical question is when? Too soon, and it sends the economy back into a recession, and that makes the deficits and debt even worse than they were before spending cuts and revenue increases. Wait too long, and the deficits and debt needlessly increase. However, there is an advantage to waiting; growth will knock down the deficits and debt faster than anything we can do with spending cuts or revenue increases.
The GDP report yesterday was just a taste of what big sequestration cuts could do to the economy. The drop in defense spending in the recent GDP report took away a little over 1% of the GDP growth, according to one talking head economist. It would be foolish to go overboard right now.
The end of the payroll tax holiday is already in place. No one talks about it, but that was big.
It might be a better idea to kick the sequestration can down the road another quarter. The key to this situation is too tap the brakes, a little at the time. No one likes practicing patience, but it would probably be the smart move right now.
I don’t need an excuse to call Bozo anything. Y’all didn’t need one for the last President. Who by the way as dumb as he was, is a genius compared to our current one.
If folks are still feeling the recession then we’re in a recession. I don’t care how you spin it to make ‘The Golden One’ look good. We are still in a recession. It didn’t end just because ‘The Chosen One’ took office in 2009.
Even if all those 157,000 jobs are real, jobs requiring the employee to ask if the customer wants fries with their order don’t pay enough to put food on the table and keep the bills paid. If folks can’t pay their bills they ain’t gonna be buying big ticket items. If big ticket items ain’t selling we’re in a recession.
The only myths about the recession are the one’s y’all are spinning about it being over.
The kind of things you propose in cutting spending and waste is the worst kind of way to deal with the crisis.
Well golly gee Adam, cutting spending works for big corporations that are in financial trouble. Why not the government?
The federal government is not a household budget and we can’t just eat rice and beans for a while until things get better.
No, it ain’t household budget. In fact the ain’t a budget. That’s one of the biggest problems. The Democrats refuse to pass one.
Owning two businesses and running a house I have three budgets. One thing I’ve noticed about all three of them is they all have to balance. Most states have balanced budget amendments requiring them to balance their budgets every year. In every case sometimes spending has to be cut in order to balance them. I manage to do it with all three of my budgets. The states manage to do it with their budgets. But the Federal Government can’t cut spending to balance it’s budgets? And you want to say I’m the one with the myths?
Adam Ducker is an ignorant child, just like his brother Stephen Doughboy. They both need to remove themselves from the liberal bubble world they live in. Crime is rampant, not because of an administration bent on not enforcing the law, or because the economy is in shambles, but because of the lack of more gun control. Businesses are closing because Obama is bent on taxing them out of business, with the goal of redistribution of wealth. Come out of your bubble and take a look at what is really going on in America.
Unemployment is higher when Obama started his second term than it was when he took the oath for the first time. People said it was unacceptably high back then. Now it is a bit worse.
Obama says he inherited a mess, but after four year we are no better off. We just owe a lot more money.
It is hard to believe that we reelected this guy. If this new had hit a few months before, we certainly would not have.
“We can’t legislate fixes for the core weaknesses in the economy or this recovery and there’s no one left to blame anymore. We can only wait it out and not make things worse along the way. “
Have you become a Republican? This is good sense. But Obama will not take this advice.
Gerri Willis tallies up the various bailouts and stimulus plans and arrives at a big fat number: $7.66 trillion. That’s the aggregate amount spent by the government and Fed to do everything from the Bear Stearns rescue to various levels of quantitative easing to payroll tax “holidays” (that were not offset, of course) to good old Operation Twist (look it up). These things happened under Bush and they happened under Obama and they have precious little to show for themselves:
That’s a lot of money and where are we? Nowhere, as far as I can tell. Unemployment is at 7.8%, exactly where it was when President Obama came into office.
The economy is contracting, shrinking, and consumers and taxpayers say they aren’t too happy. It’s no wonder. All of this money out the door and much of it will have to be paid back. Our economy hasn’t recovered. The stimulus spending was a bust!
Adam, we could have waited for H.C. With the economy in a shit hole that should have been #1 priority not H.C.
Ron Brown: “If folks are still feeling the recession then we’re in a recession.”
Sorry. Still wrong. You don’t get to just say we’re in a recession. You’re the only one on this site left right or center trying to defend that idea.
Frank: “Adam Ducker is an ignorant child, just like his brother Stephen Doughboy.”
Welcome back again, Frank.
C&J: “Obama says he inherited a mess, but after four year we are no better off. We just owe a lot more money.”
Maybe you didn’t read the post? Five and a half million new jobs in the last three years since the recession ended. How you can say we’re no better off is a giant mystery to me.
KAP: “With the economy in a shit hole that should have been #1 priority not H.C.”
So what should Congress have done instead of working on health care that would have us on a better path today? Can you name such a thing?
I should explain that I am speaking dynamically. The economy recovers and would have recovered and was recovering before the Obama spending hit the economy. We should be much better off. Instead unemployment is a bit higher than it was when Obama took office.
The economy created jobs, but too few jobs to keep up with the need, even through lots of people left the labor force.
Imagine you have a child of five. He is growing, but because of his diet is is smaller than he would have been at nine. Not successful.
5 and a half million new jobs. McDonalds and Burger King. 7.9% unemployment this country is in a shit hole Ducker no matter what Obama is telling you.
You argue without evidence or real qualification that both that the economy should be growing faster somehow, and that it’s not growing faster at the fault or failure of President Obama. I don’t see where you get those views though.
KAP: “5 and a half million new jobs. McDonalds and Burger King.”
BLS breaks down the new jobs by sector. Unfortunately for your view, we know not all new jobs have been fast food.
“…is in a shit hole Ducker no matter what Obama is telling you.”
We’re coming out of tough times, not sinking down into them. You say 7.9% unemployment as if hasn’t declined from a high of 10% over the last few years. Things are getting better. As a critic of the president you’re welcome to use a snapshot view of the economy and pretend out of context that we’re in worse shape than we are. It’s just completely dishonest is all.
Adam Ducker and Stephen Doughboy spin, spin, spin. KAP is correct, the country is in a shit hole. Obama and the liberal democrats have had 4 and 6 years respectively to do something…and nothing. Here is a great example of AD’s juvenile thinking:
“So what should Congress have done instead of working on health care that would have us on a better path today? Can you name such a thing?”
Posted by: Adam Ducker at February 1, 2013 8:35 PM
How about not wasting tax dollars on a pipe dream national HC program? Perhaps leaving tax dollars in the hands of working people; perhaps allowing businesses to grow instead of stifling them with penalties and tax burdens. Adam, you are no better than Stephen; you are ignorant and juvenile, you have no common sense, and you have no concept of what it takes to grow a nation or a business. Obamacare was a waste of America’s time and resources, it is nothing more than another democrat attempt to redistribute wealth and buy the votes of the ignorant masses.
Adam, Frank is right. All because the DJIA is above 14000 does not mean the economy is getting better. It just means corporations are doing better with fewer. 7.9% may not be the 10% Obama took us to but it does show it is going back up.
You argue without evidence or real qualification that both that the economy should be growing faster somehow
Perhaps the evidence is Obama’s own recovery team who gave us what the economy would look like with and without the recovery plans. Current state shows it to be far worse than either scenario.
To provide some context, recall that back in January 2009 Team Obama economists Jared Bernstein and Christina Romer predicted the unemployment rate by 2013 would be closing in on 5%. (Of course, Obama’s economists also thought we’d be in a mini-boom of 4%-plus economic growth. That hasn’t happened either.) Oh, and at the January pace of job creation, we won’t return to pre-Great Recession employment levels until after 2025, according to the Hamilton Project’s Jobs Gap calculator.
KAP: “All because the DJIA is above 14000 does not mean the economy is getting better.”
No? How about Industrial Production, Real Income, Employment, and Real Sales? How about light vehicle sales, or residential investment growing again? How about housing starts?
Yes, debt is high, overall unemployment is still high, long term unemployment a complete nightmare, consumer confidence is still lower than we’d like. But none of that says anything about the trajectory of the economy.
“7.9% may not be the 10% Obama took us to but it does show it is going back up.”
I think it’s going to go up and down over the next year before it starts any sustained movement toward 7% or lower. Ticking up a 10th of a percent is not evidence of it returning to 10%. It’s just the way it works as far as participation rate goes and folks returning to the workforce.
Rhinehold: “Perhaps the evidence is Obama’s own recovery team who gave us what the economy would look like with and without the recovery plans.”
Funny how the only time conservative critics like AEI cite the Romer Bernstein report it’s presented as the gold standard for economic prediction and accountability. Nevermind the fact that the report carries heavy disclaimers and it’s own predictions were proven inaccurate by the time the stimulus was even signed into law in February 2009. But of course we should hold them to the “promise” that it would never get above 8% unemployment despite the fact that it was 8.3% already by the time the bill was law…
It’s not about holding anyone to a ‘gold standard’. It is about showing that the economy would have done the same, perhaps better, than it did had we not passed the stimulus.
Remember, much of the problem we had in the fall of 2008/winter 2009 was due to the credit crunch, due directly to the inaction of congress to temporarily belay the mark-to-market rules that erroneously wiped billions of dollars off of the books of many banks, preventing them from being able to lend due to other regulations in place requiring a certain ratio assets/debt. The assets weren’t gone, they were just trading at essentially zero. The houses still existed and had value.
In March of 2009 (after the election of course) Congress finally did belay those rules and we saw an immediate response to that, banks were able to immediately start paying back TARP funds, the economy improved and we came out of the recession. Had they acted when called upon (september 2008) it is likely that the ‘great recession’ would have been a minor event.
But once that was done, the economy should have recovered much better than it has. But because of the unfortunate desire to ‘play favorites’, this administration’s tinkering, along with the passage of Obamacare, has prevented the economy from growing as it could have.
Yet the Democrats will NEVER accept the fault for any of this, even though they were in control of the house and senate from January 2007 and watched all of this occur under their noses… It’s disgusting partisan politics.
Do you have anything else to provide as proof that Obama’s policies helped the economy more than it would have recovered on its own? I’m using whatever we have, at least it is based on something, not just wishful thinking. I am not even upset that we went above 9% unemployment, it is the staying there and continued misery that government over-regulation and spending is causing.
Adam, Your getting like Stephen, not reading the whole post or adding to it. Did I not write corporations are doing better with fewer. It has NOTHING to do with Obama, industry is finding out it can do fine with less.
You don’t get to just say we’re in a recession.
So now ya want to tell me what I can say and can’t? Like I’ve always said, free speech only applies as long as it agrees with the Left.
This is the worst “recovery” since WWII. I don’t know for sure why that is. Nobody does. I can say that whatever the president is doing doesn’t make this economy better than the worst. Maybe its not his fault. Personally, I have always agreed mostly with what you wrote about the economy working at its own pace. But Democrats are quick to blame Republicans for any economic problems.
In fact, your whole world view is based on the idea that Bush somehow crashed the economy and that Obama is fixing it. Well, I think it is a complex story. Bush did not crash the economy and Obama certainly is not fixing it.
In any case, you cannot both blame Bush and exonerate Obama after four years of sideways movement. Either his massive spending could fix it or not. If not, why waste the money?
Rhinehold: “It is about showing that the economy would have done the same, perhaps better, than it did had we not passed the stimulus.”
You’re mistaken if you honestly think the report is proof of that. The memo itself says:
It should be understood that all of the estimates presented in this memo are subject to significant
margins of error. There is the obvious uncertainty that comes from modeling a hypothetical
package rather than the final legislation passed by the Congress. But, there is the more fundamental
uncertainty that comes with any estimate of the effects of a program. Our estimates of economic
relationships and rules of thumb are derived from historical experience and so will not apply exactly
in any given episode. Furthermore, the uncertainty is surely higher than normal now because the
current recession is unusual both in its fundamental causes and its severity.
The memo is nothing more than an estimate of what the recession might look like with and without a hypothetical stimulus package.
KAP: “Did I not write corporations are doing better with fewer.”
Well, you wrote: “All because the DJIA is above 14000 does not mean the economy is getting better.” I gave you several more ways the economy is growing and they don’t all just have to do with corporations. You can say it has nothing to do with President Obama and that’s your opinion. You can say things are getting worse because unemployment is 7.92% now instead of 7.84%, but you’re just wrong.
Ron Brown: “Like I’ve always said, free speech only applies as long as it agrees with the Left.”
Cry me a river. No, you’re free to say things that are wrong and to make a fool of yourself by arguing a point no one here agrees with you about.
C&J: “In fact, your whole world view is based on the idea that Bush somehow crashed the economy and that Obama is fixing it.”
My whole world view? That seems a bit strange for my whole world view to revolve around one small meaningless argument.
“In any case, you cannot both blame Bush and exonerate Obama after four years of sideways movement.”
Why not? Do you blame fire fighters for failing to put out a fire as well as hoped? That was one of the core arguments against President Obama in the election: “Look at how bad Obama failed to clean up the mess left by him when the last Republican left office. Isn’t it time we had another Republican instead?”
“Either his massive spending could fix it or not. If not, why waste the money?”
Or the third case: The massive spending and tax cuts slowed the decline and sped up the road to recovery by artificially adding economic activity. Rhinehold mentions the Romer Bernstein report and if you look at their estimates the stimulus was supposed to prevent just a 1% increase in unemployment and increase GDP by 3.7%.
The failure of the presidents critics on this subject has been to misunderstand or distort the goals of the stimulus and instead assume that if it didn’t create a boom time then it failed.
I have read a lot about the collapse. The simplistic scenario that it was somehow Bush policies is … simplistic. A very good book that covers part of this is “Signal and Noise” written by a Democratic statistician. There was a general problem with predictive models. Of course, we also had the push of Freddie and Fannie. And Democrats controlled both Houses of Congress after the elections of 2006.
In any case, to take your analogy, if the fire dept failed to put out a fire in four years, I would indeed question their effectiveness.
When talking about economics, nobody can really say with certainty. I have a healthy respect for uncertainty. That is one of the biggest reasons I am not liberal. I do not believe government planners can adequately take account of all the variables. That is why they should stick to basics of creating infrastructure and enforcing rule of law.
The arrogance of the Obama folks was palpable. They raved and swore that they would indeed fix things with massive spending. They certainly never thought and certainty didn’t promise that unemployment would be just a little higher on Obama’s second inaugural than his first.
This leads to the second problem with planners. You use as an excuse that the Obama folks did not understand the full ramifications of the downturn. That is why their promises were wrong. If they do not understand the problem, that implies that their solutions will not be appropriate.
Let me add before you ask, I do not think Republicans understand the intricacies of the economy any better. I do not want to substitute one form of government management for another. What we need is recognition that we cannot and never will be able to understand all the forces that create things like innovation and growth.
The best “management” is to allow for decentralized decision making. This aggregates the best and most current information and puts decision making closer to responsibility for consequences.
Politicians and bureaucrats are almost the WORST people to make economic decision, since their lives and careers are insulated from market forces. They have incomes guaranteed by taxpayers, pensions and security. This is not a bad thing, but it indicates the type of decisions they will make. They will tend to be theoretical and broad. Again, this is okay, but what it is good for.
Government has responsibility for big things and should do them. It has no competence for detailed management and should avoid such things. Even if the people want it, government cannot deliver.
The problem is that politician get elected by promising stuff. Our government is no WORSE at doing big things than it was in 1950. We could not hope to build an Interstate highway system today. We could not build Hoover Dam today. We have become too involved in the little things.
Sorry, I said “no worse”. I meant NOW worse.
C&J: “The simplistic scenario that it was somehow Bush policies is … simplistic.”
I agree. Also very simplistic is the view that because previous economic downturns had certain V shaped recoveries that this one should have too (just because) and therefore it’s the fault of the president for not fixing it after four years. You know you can’t blame Obama for starting it but you have no problem making up reasons why it’s his fault it’s not 5% unemployment today.
“They certainly never thought and certainty didn’t promise that unemployment would be just a little higher on Obama’s second inaugural than his first.”
No, you see a pattern of underestimating the depth of the downturn from early on in things like the Romer Bernstein report. And it would be a long time before GDP and job growth was revised to show exactly how bad things were. You can see in this graph where I’ve added the actual value over the estimate lines that the trajectory of unemployment was much steeper than expected. So no, they didn’t expect or promise unemployment would be this high today, but they also didn’t expect or promise it would top out so high either.
C&J: “Government has responsibility for big things and should do them. It has no competence for detailed management and should avoid such things.”
I want a government that knows when and when not to leave things well enough alone. I don’t think at the bottom of a massive recession was a time for the government to say, “Well, hands off, this is better left up to market forces.” The market was broken and could not respond to this crisis. It was no surprise that when the crap hit the fan that President Bush behaved as a Keynesian as much as President Obama has. It’s just that after it’s all said and done the Republicans want us to forget about that and blame President Obama for the deficit spending to protect the economy. Or worse pretend only Bush’s actions were useful and worth it and call all of Obama’s actions simply handouts to supporters.
I believe that the massive Obama spending was misdirected and helped CAUSE the poor recovery.
This is as unprovable as your contention that the spending made the recession less severe. The fact is that each new recession, and each boom for that matter, changes our ideas of economic theory.
Your graph tells me that unemployment is higher than projections with our w/o recovery. Obviously, planners didn’t know. But your theory is self protecting. If it doesn’t work, you all just say that things were worse than you thought. It didn’t help to put ourselves so far into debt.
Re Bush v Obama - the TARP and the Fed stopped the freefall. The smart play would have been to allow the recovery to take place. Instead, Obama doubled down and spent way too much in poorly targeted ways. He may have helped keep things less bad, but at the price of slower recovery now.
Government has macro responsibilities. It needs to safeguard the monetary system. Nobody but government can do this (the last time a private guy bailed it out was 1907). It cannot really fine tune and should not try.
What I dislike about Obama is the way he pits Americans against Americans. He has an us-them outlook. This is something a president should not do. It is why Reagan is seen as great while Obama will be looked at as a smuck.
Adam, I’m an old man; I started 2 companies in my life and was successful enough to hire many employees. There are two ways to increase company profits (and company stock values): one is to increase production and the other is to cut costs. The DOW is misleading; companies are increasing because companies are cutting costs, i.e. employees taking on more work or cutting employees. There is a sure fire way to tell if the economy is getting better; it is the production and shipment of container material, such as cardboard. If the production of cardboard is down, so is production. You and SD have never been part of beginning a business, you are barely out of your college years, you spent your time in college having your heads filled with mush, and your degrees are probably in Liberal Arts; therefore you are nothing more than children spouting what you have heard and spending your lives defending socialists. Come out of the bubble and take a look at the real world. This country is failing and it will get worse as long as democrats and RINO’s are running things.
C&J: “This is as unprovable as your contention that the spending made the recession less severe.”
Except that my “contention” is based on the opinion of a number of economists who said the stimulus prevented a deeper recession while boosting GDP and job growth. It did slow things down a little but not as much as you’d have us believe.
“But your theory is self protecting. If it doesn’t work, you all just say that things were worse than you thought.
Except that we know for a fact it was worse than thought, it’s not just a fantasy the left cooked up to make to spin away failure.
It’s been argued that since unemployment went over 8% and 9% then the stimulus may have in fact made it worse, that it would have stayed below 9%. Yet, we see those predictions fail before the stimulus was law and the trajectory was far beyond 9% closer to 10% and 11%. The chart should put that idea to rest but it won’t.
The report that “promises” 8% even has a disclaimer saying 9% may not be the high point, it may in fact be 11%. That appears to be the case.
Frank: “Adam, I’m an old man;”
You forgot to say you’re a grumpy old man.
“…and your degrees are probably in Liberal Arts”
No, I have a Bachelors of Science in Computers from a not so very impressive state college. It works well for me though. I did meet my wife there at the school.
“Come out of the bubble and take a look at the real world.”
I take your advice on this subject very seriously. There’s no bigger expert on living in a bubble here than you, Frank. You were a true master of your own delusions during the election and I’ve never seen anyone be so wrong and yet so insulting at the same time.
Are these the same economists who predicted the better economic times, the ones who did not anticipate the ostensible depth of the problem and the ones that did not foresee the downturn in the first place, or perhaps the ones who predicted ten out of the last two recessions?
The test of any theory is its predictive power. The economists you speak of give us general ideas, but they are as weak on details as we are. Economics is not a science and in the macro level it may not even qualify as an art. That is why we need to respect the fundamental uncertainty of predictions.
re being worse than we thought - the actual recession was within the limits of predictive error. What happened after was not part of this. We just did not recover as we were supposed to.
Re the stimulus - I don’t believe it “failed”. What it did was move economic activity from the future into 2009. It mortgaged the future to the present, what is now the past.
Re computer science - my son is studying computer engineering. He suffers from some of the same problems I think you do. A computer system is complicated but knowable. It produces more or less what you predict if you get all the programming right. The economy is complex and not knowable. We are in a constant state of experimentation and adaption. We need government for big things. But we need to leave innovation and adaption to the people, who can react and correct much faster.
I guess if the opinion of the economy by economists is no more valid to you or perhaps even less valid than your own opinion of the economy then I guess that explains a lot.
As far as leaving innovation and adaption to the people, I wasn’t aware this was a problem. Just because the government takes action during a crisis does not mean somehow the government is now in charge of picking winners and losers. There are a few exceptions but the right has largely inflated these cases to present the government as far more intrusive into the economy than it really is.
The Great Recession (depression?) does not match the pattern of other recessions. The lack of tested models make applying theories to this recession difficult. The closest models would be the Great Depression and the ‘Lost Decades’ of Japan. Some small national economies have undergone collapses, but the sheer sizeof the American economy makes only the Japanese model of much use, and the lack of modern safeguards such as the FDIC once again only leaves us with the Japanese model as a useful model.
But even the Japanese model has only limited utility because of cultural differences regarding saving; still, the Japanese experience resembles the American Great Recession in one critical regard: asset deflation.
What makes the Great Recession so unusual is asset deflation. This resulted in deleveraging in the private debt market, deleveraging which continues to this day. It also deflated the chief source of middle class wealth, housing values. And, perhaps most importantly, it collapsed the financial sector, which had failed to properly assess risk as it created trillions in mortgage derivatives.
The deleveraging means private debt cannot be depended on to fuel recovery. Recovery for the American economy was forced to depend on public debt.
The credit crunch in the fall of 2008 was the most dangerous moment for the American economy in modern history. A crucial series of decisions was made… And it appears they were the right decisions. Some were highly unpleasant. The federal government bailed AIG and GM and others. They bailed out banks while rushing consolidation of teetering firms (such as Merrill Lynch) into healthy ones. The independent investment firms disappeared or were swallowed up, with the notable exception of Goldman Sachs.
The re-formed financial sector survived as more than mere “zombie banks.” AIG survived. A Cash for Clunkers program stimulated demand for autos at a crucial time, reviving the car industry.
Today, the housing sector is finally turning around. It’s still low, but the trend has reversed, thank goodness.
Well, I could go on, but it’s important to notice that interest rates remain exceptionally low. The yield curve definitely shows real growth, but the low rates tell us the threat remains slow growth and deflation.
Not grumpy Adam; just short on patience with boys who want people to think they are men. The point I was making and you failed to grasp, is life experience. You have none and I have plenty. It doesn’t matter if I was right or wrong on the last election; there were a lot of people wrong. Who would have guessed the American people would have been so ignorant as to vote that stupid son-of-a-bitch in for another 4 years. He wasted his first four years running us in debt another $6 trillion, handing out tax dollars to his supporters, crippling us with Obamacare, and attacking capitalism. Now he’s beginning his second 4 years attacking gun owners, violating the Constitution, and trying to place us in debt for another $6 trillion, and let us not forget amnesty for 16-17 million illegals.
Frank was 34 earlier this year.
I have seen economists on both sides of this issue. I recall an “Economist” article that had five. Three thought it worked; two were against.
Most economists agree that unemployment was lower than it would have been at the end of 2010. I agree with that too. But at what cost in the long term?
The Economist had listed a survey of economists. Re whether the benefits were worth the costs in the long run. 46% believe that the benefits will exceed the costs, 12% believe they will not, and 27% are uncertain the rest had no opinion.
An additional permutations is what could have been done differently. Obama promised infrastructure. That would have been good. He did not deliver much of this.
A better president might have given us a better stimulus with more to show for all the money we spent.
re picking winners or losers - This was the biggest problem of the stimulus. The Obama folks tried to do just that. They invested in Solyndra type enterprises and generally tried to drive capital. If you are against this, you can join me.
So let’s sum up -
We needed to take drastic action and we did with TARP and Fed action.
A stimulus was useful, but the Obama folks did it wrong. We got some benefit from the massive spending, but lost the opportunity to benefit even more by building real infrastructure, instead of just putting up signs.
Let me make an analogy. Imagine a man with a serious leg injury. It will kill him. Doctor Obama cuts off that leg and points to his success in saving the life. A better doctor might has saved both the life and the leg. Is the now one-legged man better off than if there had been no help? Yes. Is he as well off as he would have been with competent help? No.
In my ideal world, government would stimulate only through actual financial protections, supporting science and roads, waterways, bridges etc. In other words, infrastructure physical, financial and human.
Government generally should stay away from transfer payments, supporting specific firms or trying to manage economic activity
Frank: “The point I was making and you failed to grasp, is life experience.”
I get your point. You’re old as dirt and all you want to do is be rude to those you disagree with. Carry on, old man.
A government which limits its activities to financial protections and avoids “transfer payments, supporting specific firms or trying to manage economic activity” would be nice, but as a practical matter, sometimes it just doesn’t work.
Take, for example, Goldman Sachs, a ‘vampire squid attached to the face of humanity.’ The Treasury Secretary under Bush was Paulsen, a former CEO for that company. It was the largest firm in the financial sector, and in an amazing coincidence, the only independent survivor of the collapse. The Federal Reserve overcame the credit crunch by essentially giving away money to the banks.
Personally, I would have liked to see a conga line of bankers, CEO’s, ratings agency personnel, and mortgage lenders go to jail. They deserved it. I disliked the moral hazard of bailing out and helping those institutions that failed, including GM and Chrysler. The American taxpayer has been presented with a multi trillion dollar bill for saving their bacon. They didn’t deserve it.
And yet, I would have bailed them out too, and I would not have prosecuted them either. They were too big to fail, and confidence needed to be restored. It was unfair and unjust, and the country has picked up a $9 trillion tab and counting… but…
Sometimes government has to intervene in the free market. Sometimes it has to intervene in a big, big way. Allowing booms and busts to go unchecked would cause unspeakable suffering for Americans as well as everyone else.
As the economy grows, I’d like those ‘too big to fail’ firms broken apart. Even today, they generate huge fees while adding nothing whatsoever to the economy.
Goldman was primarily a Democratic firm, but it played both ends. According to Federal Election Commission Goldman Sachs’ political action committee and individual contributors donated $994,795 to Obama’s presidential campaign, the second-highest contribution from any company PAC and company employees.
And Robert Rubin was Goldman’s CEO you may recall. Goldman makes a point of getting both Democratic and Republican insiders.
The fact that Goldman prospered under TARP and the stimulus indicates the problem. Well connected firms like Goldman benefit from government regulations, which limit their competition. If you look at the “cure” you notice that Dodd-Frank is fairly popular among established larger firms. Their complaints are pro-forma. It keeps out the new players.
Re banker etc going to jail - few of the broke the law. They used the laws to their advantage. That is why despite Obama in power, controlling the Justice Department plus both Houses of Congress, few people were indicted, much less convicted. It is a myth that the big finance types are working against the government. They have long formed an unholy alliance made possible by regulations.
It is interesting, however, that the taxpayers actually made money on the banks. We were paid back with interest. We lost money on GM, Solyndra etc.
Re boom and bust - nobody wants to stop a boom or even call it one. Politicians certainly want to keep on giving away benefits and other want to keep on getting them.
A good policy would be to have an infrastructure list with important but not urgent projects. These could be supported in bad times and funds for new ones withdrawn in good ones.
It’s breathtaking how much Conservative commentary here amounts to a cultish unwillingness to respect people outside their political group, respect ideas beyond their schools of thought, or acknowledge evidence and causation that doesn’t fit in with their ideology.
A basic truth I have learned over time is that nobody can create a system of logic that is failsafe as a replacement for experience and judgment. Good logic, good thinking is done with reality as a constant check on expectations and theories.
Republicans don’t do this. They have been taught to build their system around a systematic rejection of liberalism, around hatred of liberals, and around taking revenge for any victory liberals might get, or any drubbing a member of the right might get.
This hypercriticality is payback for Bush, and the pathetic thing about it is, they don’t recognize that much of the criticism of Bush was just. He did get us into a war which turned out to have no real justification. He did extend that war far beyond the time it was intended to last, or should have lasted. He consistently intervened on behalf of companies that were deceptively dealing with housing loan.
The worst consequence is that not only are Republicans not learning from Bush’s mistakes, they’re adding to them, taking their errors into new directions that even Bush never took them.
They want to believe that if they force their beliefs hard enough on people, that people will, like torture victims under duress, break, and resign themselves to the new system.
Unfortunately, in three out of the four last elections, Republicans have received a reply to such efforts of “no”, a reply that should be obvious from the fact that in those three elections, they lost representation in Congress.
Republicans want to believe that people are waiting for them to swoop in and save the day. What they may not realize, is that if you go by the polls, it seems plain that what people want salvation from is a problem Republicans will not commit to solving with any effectual policy.
I have moved forward, taken in the lessons of the past success and failures of Bush and Obama and proposed new solutions that include significant government but also allow the people to determine their own choices.
You are the one living in the past. Indeed, you admit that much of what you are doing is “payback for Bush”. It is a retrograde point of view. Bush has been gone for going on five years. Nobody wants to “go back” to his times. Things have changed and we move forward.
As an American, I try to figure out what is best for America. My basic values are indeed biased toward freedom and away from the bureaucratic state. But I see and acknowledge places where the state must act.
We have more than two options. It is not as you think a situations where “we” get our chance and then you get yours. Presumably we look for better solutions than either side can produce.
I distrust revolutionary changes and I am content when politics moves slowly. In 2005, Democrats blocked Bush’s reforms of pensions and entitlements. In 2009, Republicans blocked some of Obama’s reforms.
Bush was reelected by a little less than 51% of the vote; Obama was reelected by a just a little more. 51% is not a mandate for radical change. We do not want to swing between “our” big changes and “your” big changes.
America has been the most successful country in history not despite but because of its small c conservative tendencies in government. We change slowly with broad consensus. In issues where we have tried to push quickly, it has come to grief.
IMO, Obamacare will be like that. Its contradictions are beginning to pile up. This is not a Republican sabotage. It is a matter of practical unworkability. This angers partisans, but it is true. Some things really just don’t work in the form that the theorists or partisans tell us they should.
BTW - “He consistently intervened on behalf of companies that were deceptively dealing with housing loan.”
Can you name even one concrete case? I think you are a liar or a fool to say this sort of thing and it harms the debate.
I know you like to treat me as some kind of nutty kid who just throws out bumpersticker claims, but maybe it would do you some good to google things first.
I don’t like to be dishonest with people. I don’t have the talent for being a liar. As for being a fool?
Ten years ago, I supported the War, whose tenth anniversary is almost upon us. I was led to believe that Iraq could pose a threat to the US, that he had WMDs, and that he had terrorists training within his country to attack us. That’s what I thought, this time, ten years ago.
I was a fool, like millions of other Americans.
Ten years ago, if you had asked me if we would ever repeat the mistakes in Vietnam, if Bush would allow an insurgency to run rampant, and a war to prolong such that thousands of American soldiers would die, I would have told you that this was unimaginable. No American President, I would have told you, would have allowed that to happen on their watch.
If you had told me that any President would allow the fall of a major city during a disaster, and let victims wait for days while thousands died, I would have told you that was out of the question.
If you had told me that any Congress would allow this nation to come anywhere close to default on its debt, I would have told you nobody could be that stupid or reckless.
I never anticipated how far your party would fall, or how quickly. I thought your people were smarter than that, but instead, they let everything revolve around the party, and short term political battles.
And I was a fool for thinking those things. For giving your people that much credit.
I became a writer here because I felt my country’s interests were being failed by its leaders. And I didn’t need to tell myself these shortfalls were catastrophic failures. I mean, a war that was supposedly had its combat operations over by the end of summer, but ended up lasting for several years afterwards? I don’t need to imagine that’s horrible. I don’t need to get too creative to think that the 9.1% annualized drop in fourth quarter 2008 GDP was bad. We all knew it was a hell of a crash then and there, and there was clarity we now lack, about why.
It’s not merely a matter of one side doing a little change, and then another, it’s the fact that your side has absolutely refused to believe that it should be changing from its current direction, despite the failures that haunted those policies throughout the last decade. Why should we be electing people who didn’t learn their lessons even after being punished by some pretty huge failures?
I believe voters should have kept your side out of power longer so you would take responsibility for your actions. Instead, you rushed into power, with people even more unprepared to shoulder real world responsibility.
I would be a fool not to oppose your party at this point, especially after the Debt Ceiling debacle. The sooner we can see your people gone from the House, the sooner investors will know that there is no longer any danger of America defaulting by choice.
I mean, think about that for a second: People on your side have actually threatened that!
There is much about the current Republican party that I would have thought impossible, ten years ago. I think, basically, your party has developed a bad habit of following your big losers into further error, and then rationalizing what you did to avoid being put to shame. Unfortunately, it means that when you’ve screwed up, you’ve gotten worse about it afterwards instead of drawing back.
The conservatives of America need to do their version of a constitutional convention for their party, because right now, they’re running on an articles of confederation style agenda. People can change, if they want to. But they have to want to. Nobody can save the Republicans of America from themselves.
“It can’t be said enough that when President Obama took office we were losing an average of over 700,000 jobs a month.”
I’m sure that’s true if you are trying to support this President despite his performance. In everything that he’s done there has been one constant- he doesn’t lead. This is just another example.
“If you had told me that any President would allow the fall of a major city during a disaster, and let victims wait for days while thousands died, I would have told you that was out of the question.”
I don’t blame the Obama folks for this. It was hard to get help to places like Staten Island after Sandy. The fact that aid still has not flowed adequately is a problem. Perhaps we should have learned from Katrina.
“If you had told me that any Congress would allow this nation to come anywhere close to default on its debt, I would have told you nobody could be that stupid or reckless.”
If you read the Woodward book, you find it was not congress but Obama. Reid, Pelosi and Republicans agreed. Obama threw out the deal.
But I objected to your assertion “He consistently intervened on behalf of companies that were deceptively dealing with housing loan.”
Your article does not indicate this. This talks about disagreements about regulations. You extrapolate too far. You could just as easily blame Dodd and Frank for stepping in to protect their subprime loans when Bush wanted to regulate it more closely.
Re treating you like a kid – I tend not to do that as some others do. I have some sympathy for an intelligent young man like you, but I don’t find much practical experience. I have to deal with people like you a lot. They are super intelligent but lack experience to give them perspective. I always try to put them into situations where they fail, but I protect them from catastrophes. This is the only way they learn that things are easier to do in theory than in practice.
I’m sorry, but Katrina wasn’t merely about slowness of aid, but of lives lost. America saw people stuck in absolute squalor for days on end, no help reaching them. It saw thousands of people die that perhaps did not have to.
On the second point? You can complain that Obama didn’t agree to a certain agreement to deal with that hostage crisis, but your people took the hostage, so you’re responsible, and in a way that can’t be easily transferred to Obama, because Obama didn’t choose to have this chicken****, cowardly tactic pulled on him.
On the third point, the AGs of the states had lawsuits ready to go, and suddenly, the Bush Administration swoops in and says its got a pre-emptive claim on them. Do you see a big, huge case carried out by the government in their stead? No.
As for the Dodd and Frank subprime loan thing? I don’t get why you think it’s remotely plausible for one guy, who supposedly acted in 2008, after the bubble bursted, and another guy, who acted back in the earlier part of the decade, when Republicans were in control, to be the culprits behind the subprime mess. You say its easy, I say it’s hard, if you want to stick to the facts.
Much more plausible is a consistent Republican push for the relaxation of laws and regulations that were meant to prevent banks from consolidating, that were meant to limit derivatives trading and conflicts of interest, and that were meant to firewall one industry off from another. But then, your side would be at a political disadvantage it would take generations to overcome.
The truth is, the Republicans are trying to keep the same policies and dogmas they had before the failures of the last administration, despite the fact that those failures both rendered those policies less popular, and exposed their impracticality.
I don’t think conservatism, though, should be that kind of mindless resistance to change, or to being proved wrong. Conservatism used to be about stability, about being wise and careful, keeping to moral principles not as a way of holding yourself above other people, but as a way of elevating the merits of your own character.
Republicans have become a party of zealots who refuse to stop pushing bad policy, especially when people don’t really want it. The’ve developed this hero complex, thanks to propaganda that portrays democrats as bond villains all the time, that has them refusing to back down, because they think they need to save the world from us.
Meanwhile, a lot of people have come to believe that they’re the biggest threat to our nations security and stability, and they’re not doing much to dissuade people.
I’m sorry, but Katrina wasn’t merely about slowness of aid, but of lives lost. America saw people stuck in absolute squalor for days on end, no help reaching them. It saw thousands of people die that perhaps did not have to.
It’s sad that no matter how much this is debunked, it is still used by the left as somehow factual…
As I pointed out years ago:
One those myths was “The aftermath of Katrina will go down as one of the worst abandonments of Americans on American soil ever in US history.” – Aaron Broussard, President, Jefferson Parish, LA on Meet the Press September 4, 2005. However, Popular Mechanics explains how this is just not the case.
They write that even though the top disaster management officials may have appeared to be trying out for the new Three Stooges movie, the response was by far one of the largest – and fastest – rescue effort in US history with nearly 100,000 emergency personnel arriving on the scene within three days of the storm’s landfall. They also report that in less than one day after Katrina’s landfall the airspace around New Orleans was so saturated with rescue helos that aerial collisions became a real danger.
Dozens of National Guard and Coast Guard helicopters flew rescue operations that first day—some just 2 hours after Katrina hit the coast. Hoistless Army helicopters improvised rescues, carefully hovering on rooftops to pick up survivors. On the ground, “guardsmen had to chop their way through, moving trees and recreating roadways,” says Jack Harrison of the National Guard. By the end of the week, 50,000 National Guard troops in the Gulf Coast region had saved 17,000 people; 4000 Coast Guard personnel saved more than 33,000.
These units had help from local, state and national responders, including five helicopters from the Navy ship Bataan and choppers from the Air Force and police. The Louisiana Department of Wildlife and Fisheries dispatched 250 agents in boats. The Federal Emergency Management Agency (FEMA), state police and sheriffs’ departments launched rescue flotillas. By Wednesday morning, volunteers and national teams joined the effort, including eight units from California’s Swift Water Rescue. By Sept. 8, the waterborne operation had rescued 20,000.
While the press focused on FEMA’s shortcomings, this broad array of local, state and national responders pulled off an extraordinary success—especially given the huge area devastated by the storm. Computer simulations of a Katrina-strength hurricane had estimated a worst-case-scenario death toll of more than 60,000 people in Louisiana. The actual number was 1077 in that state.
The problem was that during the days after the hurricane, camera crews focused on the panic and reported every sordid rumor that passed it’s way without once attempting to do due diligence to determine the factual basis of any of the reports it aired. As I wrote on this blog back in September (The Highest Standards of Journalism) many, if not all of the stories reported in New Orleans were not true at all. Most noted:
• Nearly 200 corpses on ice at the superdome. Reality: 6 people died inside the superdome, 4 from natural causes, one from an overdose and the 6th was an apparent suicide.
• Large gangs were forming and running roughshot over the city, looting, raping and killing. Reality: 4 murders in the streets of new Orleans occurred during the aftermath of the hurricane, in a city that expects 200 murders a year that was just about the norm.
• Sharks were swimming down city streets. Reality: please…
What we have now is a misconception, initially shaped by an overzealous news media who needs to report the ‘end of times’ 24 hours a day, 7 days a week, and then further shaped by political hacks who want to add it to their arsenal of attacks on their political rivals, on both sides of the aisle, as an example of why you should vote for them instead. Of course there were mistakes made, however focusing on the few mistakes and ignoring the myriad of successes that helped prevent what could have been tens of thousands of deaths following such a disaster does nothing positive unless you are politically motivated to do so, IMO.
Thank you for your comments, Steven
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