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http://www.nytimes.com/2012/10/08/opinion/krugman-truth-about-jobs.html?ref=paulkrugman
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.
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