Unemployment matters, but Romney is still an idiot

By Nicholas Wilbur

I hate when Mitt Romney... speaks.

If he's not lying about a lie he lied about not lying about, he's either making shit up or flailing around like a walrus in a triple lindy competition.

Last Friday, he blessed us with this statement: "Just this week, President Obama's closest White House adviser said that 'unemployment rates or even monthly job numbers' do not matter to the average American."

The funny thing about Romney's crazy talk is that "Obama's closest White House adviser," David Plouffe, never said "unemployment rates or even monthly job numbers" do not matter. What he said was this:

The average American does not view the economy through the prism of GDP or unemployment rates or even monthly jobs numbers. People won't vote based on the unemployment rate, they’re going to vote based on: "How do I feel about my own situation? Do I believe the president makes decisions based on me and my family?"

For the 90.8 percent of the American labor force that is employed, I think this statement is pretty accurate. And yes, it's still accurate even for the 9.2 percent who aren't. (Especially if they're Republicans, because Republicans don't believe it's the government's job to find Joe Six Pack a job.) But even Plouffe is only telling part of the story.

Everyone likes to cite facts and figures showing that no incumbent president (except for the Gipper and FDR) has ever been re-elected with an unemployment rate above 6 percent.

Unfortunately for stupid people who believe the stupid shit other stupid people say, the unemployment rate actually isn't a dominant factor in the big picture of national elections.

What matters, as the Political Animal Steve Benen pointed out a month ago, is progress. If things are improving, if unemployment is falling, statistics are irrelevant.

Unemployment peaked at 10.8 during Reagan's first term, but it fell to 7.2 by the 1984 election. Unemployment grew to 7.8, up from 5.2, when George H.W. Bush sought re-election. That's why Reagan was re-elected and H.W. wasn't. And that's why Obama will glide to victory in 2012 while Romney will be stuck in the unemployment line during the day and burning unsold copies of his shitty book to heat his home at night.

After peaking at 10.1 in October 2010, unemployment fell to 8.8 percent by March 2011. Then the GOP took over.

We were promised big changes when Republicans won majority control over the House of Representatives in the 2010 midterm elections. For six months now they've bitched and moaned and done everything they could to overturn every bill Obama has signed. What they didn't do, and what Democrats will surely highlight throughout the 2012 campaign, is create a jobs bill – or a job. Unemployment declined consistently for a year and a half until Republicans took over the House. Now, for two consecutive months, it has risen.

The obstructionists have entered the building.

Expect mass evacuations sometime around November 2012. 

(Cross-posted at Muddy Politics.)

Bush tax cuts cost $329,220 for each job created

Guest post by Publius

The Bush tax cuts cost $329,220 for each job it created. That, according to the math recently employed by The Weekly Standard in its analysis of the cost per job from Obama’s stimulus package.

The Weekly Standard argued that because the overall cost of the stimulus to date is $666 billion, and the number of jobs created since the stimulus was passed (according to the low estimate by the Council of Economic Advisors) is 2.4 million jobs, the cost per job from the stimulus equals $278,000 per job. The Weekly Standard went on to note that we could have simply written a check for $100,000 to everyone whose employment was allegedly made possible by the stimulus and come out $427 billion ahead.

Sounds pretty bad, right?

Well, using the exact same formula, the Bush tax cuts passed in 2001 were estimated by the Joint Committee on Taxation to cost about $864.2 billion from 2001-2008 (the first year of the Bush tax cuts through the last year of his presidency). During that period, according to The Wall Street Journal, 2,625,000 jobs were created. That comes out to a total cost of $329,220 per job under the Bush tax cuts. And that’s if we assume that every single job which was created during Bush’s presidency was attributable to the Bush tax cuts (pretty unlikely) AND if we exclude the costs of the 2003 tax cut (estimated to cost another $350 billion over 10 years). We could have written a check for $100,000 to each person who “allegedly” had their job created by the Bush tax cuts and saved $600 billion, but they wouldn’t have received it because the check was instead delivered to really wealthy people.

My point isn’t that the Obama stimulus was good because the Bush tax cuts were bad. Instead, my point is that the math employed by The Weekly Standard is absurd. This example highlights the absurdity.

It’s wrong to suggest that the sole purpose of the stimulus was to “buy jobs.” If that was the sole purpose, then yes- the cost would arguably have been $278,000 per job. As White House spokesperson Liz Oxhorn noted the other day, however:

[The Weekly Standard] study is based on partial information and false analysis. The Recovery Act was more than a measure to create and save jobs; it was also an investment in American infrastructure, education and industries that are critical to America’s long-term success and an investment in the economic future of America’s working families. Thanks to the Recovery Act, 110 million working families received a tax cut through the Making Work Pay tax credit, over 110,000 small businesses received critical access to capital through $27 billion in small business loans and more than 75,000 projects were started nationwide to improve our infrastructure, jump-start emerging industries and spur local economic development.

The concept of the stimulus was grounded in Keynesian economic theory- government countercyclical spending is critical to countermand the effects of a recession. Increased government spending increases GDP, frees up capital and, consequently, creates jobs. Jobs are part of the benefits of stimulus. They aren’t the direct purchase.

By most metrics, the stimulus was a success. According to the CBO, the stimulus increased GDP by 3.1%. It added as many as 3.6 million jobs to boot. It gave us new factories, roads, bridges, and other infrastructure which we benefit from each day. Boiling all of this down to a cost per job is just silly.

The Weekly Standard would also be wise to note that about $288 billion of the projected $747 billion stimulus came in the form of tax cuts (about 38.5% of total spending), despite the fact that according to many prominent economists (such as Mark Zandi), tax cuts are far less stimulative than other types of spending, such as food stamps, unemployment benefits and infrastructure spending (all of which Republicans opposed).

If The Weekly Standard wants to argue the stimulus could have been more effective, it won’t find many on the left who disagree. If it wants good ideas on how to make it more effective, step one is to stop believing tax cuts are the best solution to all economic ills.

(Cross-posted at The Fourth Branch.)

Your call has been disconnected

By Carl 

Well, this is good news, right?

Fewer Americans filed applications for unemployment benefits last week, a sign the labor market is firming heading into the second quarter.

Jobless claims fell by 6,000 to 388,000 in the week ended March 26, Labor Department figures showed today in Washington. The government also issued its annual revisions to the seasonal- adjustment factors, which caused a “mild upward shift” in the number of applications, an agency spokesman said as the figures were released to reporters.

A slowdown in firings and growing payrolls may bolster further gains in consumer spending, which accounts for about 70 percent of the world’s largest economy. Companies added 210,000 jobs in March, while the unemployment rate held at 8.9 percent, economists project a Labor Department report to show tomorrow. 

A sidenote: there is some reason for concern for the Obama camp, in that high unemployment is usually a harbinger of defeat in an election. The latest number, 8.9%, is notably down from the near-10% of this time last year, but more has to be done. Fortunately, these things have a way of gaining momentum.

Employment is like Sisyphus' boulder: once it starts up the hill, it becomes easier and faster, but when it falls, it plummets.

Americans getting jobs. Sounds like a sign of a healthy economy. 

You'd think.

As  I write this, the markets have just opened for the day. Mind you, nearly every index is up for the year at or near record paces not seen since the tech bubble of 1998, but today, when finally it looks good for an American middle class worker, the toilet lid flies up and the markets sink. The Dow is off 13 points, and S&P 500 and NASDAQ are both struggling to stay even.

What is it with corporate America that they can't sync up with Main Street Americans?

In a nutshell, there is no more Corporate America any more than there are American cars. So many companies have become multinational conglomerates that their fortunes no longer rise or fall along with those of you and I here in the USA.

It used to be "what was good for GM was good for America," but that's no longer the case. GM got bailed out. Americans got HAMPered, the plug having been pulled on the only sensible bailout program in the recession, the one that helped Americans keep their homes.

But I forgot. That program wasn't going to turn a profit for the US. Or a bigger one for the banks. My error.

Just like full employment means the banks can't hold your feet to the fire in interest and late payment charges.

(Cross-posted to Simply Left Behind.)

Things Republicans say about job creation that aren't true

By R.K. Barry 

Yesterday I wrote that no matter how tired progressives get saying the same things over and over again, no matter how tired they get refuting the lies of Republicans, they should carry on and fight the good fight because many people, who perhaps don't always pay enough attention, need to hear the the truth as often as possible.

Recently I have become a big fan of former Labor Secretary Robert Reich, who has a teaching gig at UC Berkeley these days and also blogs on political and economic issues. I find Reich the consummate teacher in the way he lays out his arguments and exposes nonsense for what it is.

One of the greater challenges in politics, I find, is that economic theory is so hard for most people to understand, and some theories that seem to make sense are flat out wrong, things like, if we just slash taxes on corporations, that will necessarily create more jobs. Yeah, well, not so much. Not if there isn't enough demand out there because people don't have sufficient income to buy stuff. Anyway, I'll let the good professor explain.

Here are a few untruths Republicans like to trot out, with rejoinders supplied by Professor Reich:

• "Cutting taxes on the rich creates jobs." Nope. Trickle-down economics has been tried for thirty years and hasn't worked. After George W. Bush cut taxes on the rich, far fewer jobs were created than after Bill Clinton raised them in the 1990s.

• "Cutting corporate income taxes creates jobs." Baloney. American corporations don't need tax cuts. They're sitting on over $1.5 trillion of cash right now. They won't invest it in additional capacity or jobs because they don't see enough customers out there with enough money in their pockets to buy what the additional capacity would produce.

• "Cuts in wages and benefits create jobs." Congressional Republicans and their state counterparts repeat this lie incessantly. It also lies behind corporate America's incessant demand for wage and benefit concessions – and corporate and state battles against unions. But it's dead wrong. Meager wages and benefits are reducing the spending power of tens of millions of American workers, which is prolonging the jobs recession.

• "Regulations kill job." Congressional Republicans are using this whopper to justify their attempts to defund regulatory agencies. Regulations whose costs to business exceed their benefits to the public are unwarranted, of course, but reasonable regulation is necessary to avoid everything from nuclear meltdowns to oil spills to mine disasters to food contamination – all of which we've sadly witnessed. Here again, we're hearing little from the President or Democratic leaders.

If cutting taxes on rich people, cutting corporate income taxes, cutting wages and benefits, and deregulation don't create jobs, then a lot of middle class people are probably going to be voting against their own best interests come 2012 and in the interests of others who don't really need the help. Just sayin'.

(Cross-posted at Lippmann's Ghost.)

If you lose your job, John Boehner might just tell you to go fuck yourself

By Michael J.W. Stickings

You may lose your job, but John Boehner doesn't give a shit:

If House Republicans succeed in cutting tens of billions of dollars in discretionary spending over the next six months, some of the most immediate victims will be federal employees, many of whose jobs will be slashed as their agencies pare back.

At a press conference in the lobby of RNC headquarters Tuesday morning, House Speaker John Boehner (R-OH) shrugged this off as collateral damage.

"In the last two years, under President Obama, the federal government has added 200,000 new federal jobs," Boehner said. "If some of those jobs are lost so be it. We're broke." 

As Brian Beutler notes, "Boehner didn't cite a source for the claim that Obama had added 200,000 employees to the federal payroll. And he said he didn't have an estimate of how many jobs would be lost as a result of the GOP cuts." In other words, he doesn't really know anything, he was just talking out of his ass.

But there's nothing funny about people losing their jobs, and Boehner's lack of concern, his utter disregard for real people dealing with real problems, is appalling.

As Steve Benen notes, even with all the talk right now about jobs and unemployment, Boehner "by his own admission, prefers a budget plan that would make unemployment worse, on purpose." He "intends to force thousands of teachers, police officers, medical professionals, and food inspectors from their jobs, and... said he doesn't much care." 

Ladies and gentlemen, your 2011 Republican Party!

Republicans, spinning wildly, claim credit for positive economic news

By Michael J.W. Stickings 

The question is, do Republicans really believe their own propaganda?

It took less than three weeks for the new Republican Congressional leadership to claim credit for an apparent economic upturn.

An aide to House Majority Leader Eric Cantor, Brian Patrick, emailed reporters [yesterday] morning:

THERE ARE THE JOBS: Republicans Prevent Massive Tax Increase, Economy Begins to Improve: U.S. companies plan to hire more workers in the coming months amid growing optimism over the economy, a quarterly survey released Monday showed, providing further evidence that the jobs market is turning around. In the fourth-quarter poll of 84 companies by the National Association for Business Economics found 42% of companies interviewed, ranging from manufacturing to finance, expect to boost jobs in the six months ahead. That's up from 29% in the first three months of 2010. Only 7% in the latest survey predict they will shed jobs in the coming six months, down from 23% at the start of last year.

The Dow Jones wire story Patrick linked makes no mention of the GOP.

Do they? Maybe, maybe not. Obviously, they're trying to score political points by taking credit for any good news they can find.

It's just so transparent how full of shit they are.

As Steve Benen remarks, "[e]ven by the standards of the most shameless hack, this is farcical. Worse, it's part of a growing pattern":

To reiterate a point from last week, this really is fascinating. The economy started growing again in 2009, with the stimulus giving the economy a boost. We saw growth continue throughout 2010 -- even after those rascally Democrats passed health care reform and Wall Street reform -- while Republicans said Dems were killing the economy.

And now we have several Republican leaders arguing that the same tax rates that were in place last year (and the year before that, and the year before that), coupled with economic policies that haven't even been voted on, deserve the credit for more optimistic projections.

So to review, Republicans in the Bush era brought the global economy to the brink of catastrophic collapse; Obama and congressional Dems helped turn things around; and now those same Republicans whose policies failed want credit for Democratic successes.

I know some folks will find this persuasive, and maybe even some of these GOP officials have deluded themselves into believing their own rhetoric. But it doesn't make the argument any less ridiculous.

That's one word for it.