Monday, June 6, 2011

Austan Goolsbee Is Almost Correct, Just Not in the Fashion He Thinks

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Austan Goolsbee, head of President Obama's Council of Economic Advisers was making the rounds of various political shows this past weekend. HuffPo quotes him telling Christianne Amanpour of ABC:

“It's not a jobless recovery. That is an incorrect phrase," he told Amanpour.
Goolsbee is correct in one fashion. It can't be a recovery if it is jobless. But he is way wrong on a couple of points (also from the HuffPo link):
Austan Goolsbee, who heads the president's Council of Economic Advisers, says the addition of a million new jobs over the past six months shows "we have improved a long way from when the economy was in rescue mode."
My bold. Now a million new jobs over the last six months sounds good, right? Not so fast there Bucky. In an economy that needs to add roughly 125K jobs every month just to maintain status quo (that would be 750K jobs for a six month period), then a million jobs in six months doesn't begin to put a dent in the 14 or so millions of unemployed, much less the un and underemployed numbers sitting somewhere between 25M and 30M.

But wait, it gets worse for Mr Goolsbee and his figures. Being the somewhat anal retentive person that I am, I went back and looked at the blog posts I had done starting in December 2010 based on the BLS report on the first Friday of each month for the month just past. Other than the report for February 2011, I have a post that covers the jobs number for each month going back to November 2010's figures and for February 2011, I found a link to a site that includes a PDF with the appropriate numbers:
1. November 2010 39K
2. December 2010 103K
3. January 2011 36K
4. February 2011 192K
5. March 2011 216K
6. April 2011 244K
7. May 2011 54K
Now I actually went back seven months rather than six months and using information gleaned from the monthly BLS press release for jobs created, I still only come up with 784K jobs. And I haven't accounted for the little nugget in this past Friday's report that the March and April numbers were revised down 39K, placing the seven month total at 745K jobs created. 745K jobs created instead of the 875K jobs needed just to maintain the status quo, still leaving the 14M unemployed and the 25M to 30M un and underemployed. No wonder McDonald's had over a million applicants for their summer hiring binge. And made up the bulk of the "new jobs" for May.

Former Labor Secretary Robert Reich had this over at HuffPo last night:
Republicans don't want to do anything about jobs and wages. They're so intent on unseating Obama they'd like the economy to remain in the dumps through Election Day. They also see the lousy economy as an opportunity to sell Americans their big lie that government spending is the culprit -- and jobs will return if spending is cut and government shrinks.

Democrats, meanwhile, don't want to admit the recovery has stalled. They worry such talk will further undermine consumer confidence or spook the bond market. They don't want to head into the election year sounding downbeat. And they don't think they have the votes for anything that will have much effect before Election Day anyway.

But there's a third reason for Washington's inaction. It's not being talked about -- which is itself evidence of the problem.

The unemployed are politically invisible. They don't make major campaign donations. They don't lobby Congress. There's no National Association of Unemployed People.
Reich is not the first to notice the "politically invisible" nature of the unemployed. MSNBC also noted this sad fact on Friday (which I noted in my post yesterday on the human face of the statistics.)

So Mr. Goolsbee? If the president really does have a "plan" and you think it is "working,", I would like to get the name of your drug dealer because you are smoking some powerful shit. The numbers tell the story more truly than your cheerleading.

Update: I had a friend point out to me that Goolsbee is probably framing his “million jobs” as private sector jobs created. However, since the economy and the BLS numbers all include both private and public sector jobs, it is a false framing to claim a million jobs created even as the public sector is laying folks off.

There is also a question as to the number needed for the status quo. Over the years, I have heard this as a range from 100K per month to 150K per month. Since I can’t find anything definitive on this, I will stick with the 125K jobs for the status quo as a ‘split the difference’ figure.

And because I can:

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