Lowered Bar: Obama’s 95K/Month Jobs Promise Would Trail Other Recoveries
Press reports about the prediction by President Obama’s Council of Economic Advisers that the economy would add an average of 95,000 jobs per month during calendar 2010 weren’t exactly overflowing with praise, but were lacking in something one would have expected: historical context.
Philip Elliott’s Associated Press report provided none. Sewell Chan’s New York Times coverage at least pointed out that the promised level of job growth was “barely enough to keep up with the normal number of jobs the economy would have to create to meet the growth in the labor force and keep the unemployment rate steady.”
But how would what the administration predicts compare to previous recoveries? As seen in the following chart based on more detailed information here, all based on data from the government’s Bureau of Labor Statistics, a 95,000 per month performance in job growth following a breakout quarter after a recession wouldn’t exactly be impressive:
With Reagan, the question is whether you peg the economy’s breakout as the first or second quarter of 1983, when annualized growth was 5.1% and 9.5%, respectively. Regardless of which quarter you pick, the supply side tax cut-driven performance was spectacular. In fact, in one month (September 1983), the economy added almost as many jobs (1,114,000) as Team Obama predicts will be added during all of 2010 (12 x 95,000 = 1,140,000). Too bad it took the Gipper so long to get the cuts through Congress.
The performance after Bush 43′s breakout 6.9% second quarter of 2003 was far less impressive — but then again, so was the relative size of the 2003 income and investment-related tax cuts in comparison to Reagan’s. Nevertheless, what Democrats at the time were calling the worst economy since Herbert Hoover added 1,603,000 jobs during the next 12 months. That’s an average of 134,000 per month, which is 41% greater than the 95,000 per month Obama’s Council of Economic Advisers is predicting.
So what’s going on here? I would suggest that the administration, seeing mediocrity everywhere despite what is supposed to have been its own breakout quarter (5.7% in the fourth quarter of 2008) and despite their bitterly clinging to the supposed superiority of Keynesian stimulus over supply-side tax cuts, is lowering the bar to something that has at least an outside chance of occurring.
This bunch also hopes that historical reviews such as the one just done above exposing just how pathetic their expectations are won’t become widely known. Sadly so far, the press is cooperating to ensure that.
Cross-posted at NewsBusters.org.
Since about 100,000 people enter the workforce each month, that means that (at best) we’re treading water, and 10% unemployment will be the norm.
Comment by Joe C. — February 12, 2010 @ 12:57 pm
Lowering the bar alright, when he doesn’t get the 95k per month but only 40 or 50k then he won’t be critized as much as if he would give the needed numbers on the order of 200k per month to put everyone on a positive forward looking track that would give the business the community the confidence to take risks in investing money.
But, irregardless, until Obama and the rest of his incompetent advisors tell Pelosi and Reid to drop all this nonsense about tax increases, healthcare expense increases and bar the EPA from regulating CO2 no businessman in his right mind should take the outrageous risk of being saddled with expenses that will in all likelihood far exceed any hope of profit, much less return on investment. We have yet to hear them swear any of these things off. No, they continue to hold on to those things and then offer a ridiculus Faustian Bargain of puny one time tax breaks if someone would be so foolish as to take the plunge.
BTW- the EPA and Bureau of Land Management are doing a bang up job in restricting energy extraction in terms of coal, oil and natural gas. So we can say the have excelled at something, but the wrong thing.
Comment by dscott — February 12, 2010 @ 9:05 pm
The wisdom of James Madison in Federalist paper # 62
In another point of view, great injury results from an unstable government. The want of confidence in the public councils damps every useful undertaking, the success and profit of which may depend on a continuance of existing arrangements. What prudent merchant will hazard his fortunes in any new branch of commerce when he knows not but that his plans may be rendered unlawful before they can be executed? What farmer or manufacturer will lay himself out for the encouragement given to any particular cultivation or establishment, when he can have no assurance that his preparatory labors and advances will not render him a victim to an inconstant government? In a word, no great improvement or laudable enterprise can go forward which requires the auspices of a steady system of national policy.
http://www.constitution.org/fed/federa62.htm
We were warned 200+ years ago against fickle governments. In fact, we were warned that the point of fickleness in government was for the few to gain an advantage at the expense of the many:
Another effect of public instability is the unreasonable advantage it gives to the sagacious, the enterprising, and the moneyed few over the industrious and uniformed mass of the people. Every new regulation concerning commerce or revenue, or in any way affecting the value of the different species of property, presents a new harvest to those who watch the change, and can trace its consequences; a harvest, reared not by themselves, but by the toils and cares of the great body of their fellow-citizens. This is a state of things in which it may be said with some truth that laws are made for the few, not for the many.
Thanks to Redstate for their own point on #62: http://www.redstate.com/dan_mclaughlin/2010/02/13/madsion-was-wise-lessons-from-federalist-no-62/
Comment by dscott — February 13, 2010 @ 11:57 pm