January 27, 2004

Why Oh Why Can't We Have a Better Press Corps? Part DXX

The right-wing hackery from the Washington Post's editorial page defies belief.

The Jobless Recovery (washingtonpost.com): Technological and organizational shifts are driving firms to close jobs down permanently, and laid-off workers are having to look for entirely new work. That takes time. Firms have to create jobs they never had before, which takes longer than re-creating old ones. As a result, the new structural nature of unemployment means that job creation lags in the early stages of a recovery.

Mr. Bush should not be blamed for this, though his irresponsible fiscal policy harms business confidence and therefore job creation. But the bigger question is whether jobless recoveries are a bad thing. They are, after all, the flip side of good news. There is less cyclical unemployment these days, so recessions are milder; fewer jobs are being created now because fewer jobs were destroyed during the downturn...

There are the lapses into incoherence: "firms have to create jobs they never had before, which takes longer than recreating old ones... job creation lags in the early stages of a recovery." But we are now 2 1/4 years after the end of the recession. A six month lag I could understand. A twelve-month lag I could admit as a possibility. But 27 months? Nope. Employment is lagging not because businesses are too bureaucratic and slow to hire quickly, but because demand growth has been slower than productivity growth. Policies that had produced faster demand growth--either by not scaring the bejeezus out of everyone by claiming that Saddam Hussein was an immediate and deadly threat to every American, or by a fiscal policy that had more employment bang--would have produced faster employment growth as well.

There are the out-and-out lies: "fewer jobs were destroyed during the downturn." The Payroll Survey--which is our best set of estimates--has as currently at a net of 2.3 million jobs destroyed during our current period of recession-like activities. Compare that to a maximum net decline of 1.3 million jobs over 1990-1992, 2.9 million jobs during the 1981-1982 worst post-WWII recession, and 1 million jobs in 1979-1980. As measured by the decline in payroll employment, this is not a period in which "fewer jobs were destroyed during the downturn.

There are the total adbdications of rationality in the interest of providing a fig-leaf for the Bush administration: the claim that "Mr Bush should not be blamed for" the fact that job creation is lagging, immediately followed by "his irresponsible fiscal policy harms business confidence and therefore job creation." If Bush's policies are harming job creation, and if job creation is lagging, then Bush bears partial responsibility--and deserves blame, no?

It's a damned shame that the Washington Post's editorial board is of the quality that it is.

Posted by DeLong at January 27, 2004 10:31 PM | TrackBack | | Other weblogs commenting on this post
Comments

As we all know, the organizational shifts demanded by the revolution in information technology mean that modern, super-flexible, just-in-time, weightless corporations permanently shed those old-economy jobs. But they haven't gotten around to creating the new ones yet because, as we all know, coporations are bureaucratic, sluggish and hidebound by hierarchy. Simple.

Posted by: Kieran Healy on January 27, 2004 10:40 PM

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"There are the total adbdications of rationality in the interest of providing a fig-leaf for the Bush administration: the claim that "Mr Bush should not be blamed for" the fact that job creation is lagging..."

Well, they're not saying Bush shouldn't be blamed for the fact that job creating is lagging, they're saying he shouldn't be blamed for structural changes in the economy.

Of course, their idea that structural changes in the economy have resulted in the jobless recovery is hard to follow. The jobs come back slowly because of limited frictional unemployment, but if frictional unemployment is limited, then where did those (2.3 million) jobs go?

It seems to me that the obvious explanation is that the economy has gone from output above its natural level (dot com bubble) to output below its natural level, and stayed there - the "recovery" isn't so much a recovery, but simply the absence of further decline (relative to the natural level of output). Hence the current (expansionist) Fed policy. This is Econ 101 theorizing by an idiot, no doubt.

Posted by: Joe Mealyus on January 28, 2004 01:14 AM

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> "Mr Bush should not be blamed for" the fact that job creation is
> lagging, immediately followed by "his irresponsible fiscal
> policy harms business confidence and therefore job creation."
> If Bush's policies are harming job creation, and if job
> creation is lagging, then Bush bears partial responsibility--
> and deserves blame, no?

Answer 1: That's why the author put a "though" between the first part and the part that "immediately followed".

Answer 2: Not if you doubt, as the editorial claims to do, "whether jobless recoveries are necessarily a bad thing. After all, they are the flip side of good news." I think this claim is untrue. But true or not, it is not "a total adbdication of rationality".

Posted by: Thomas Blankenhorn on January 28, 2004 02:25 AM

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at some point there will be a revolution at the post, where the anti-Bush partisan reporters rise up and throw off the yoke of their pro-Bush partisan oppressors.

Posted by: praktike on January 28, 2004 02:27 AM

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I got stuck after "the bigger question is whether jobless recoveries are a bad thing"

Will somebody please get me out?

Posted by: bad Jim on January 28, 2004 03:22 AM

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"But the bigger question is whether jobless recoveries are a bad thing."

I'd like to add three rhetorical questions:

1) Would an editorial in a liberal newspaper make that statement?

2) Would an editorial in a centrist newspaper make that statement?

3) Would an editorial in anything but a right-wing, cover for the GOP president, screw most americans because they're not rich, newspaper make that statement?


Posted by: Barry on January 28, 2004 04:28 AM

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Something very strange is going on at the Post.


Posted by: Bartolo on January 28, 2004 04:52 AM

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Is a jobless recovery necessarily a bad thing? Isn't this another form of the "wring out the excesses" sort of argument? How about this. Does a period of extended job loss deserve the blanket "recovery" label? If GDP is up, then there is a recovery in output. If profits are up, there is a recovery in profits. If employment is not up, is there an overall recovery.

But what really bothers me, what I find incomprehensible, is the bad thinking that is evident in the piece. The "this just don't follow that" kind of logic. My staff writes about rather complicated matters, under very tight deadlines, in very brief texts. They never, ever produce schlock like the WP piece. Never. If the WP editorial board wants to kiss the presidential keester, can't they do a better job of it?

Posted by: K Harris on January 28, 2004 04:56 AM

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The editorial is based on a false premise. Jobs - skilled jobs - _are_ being created. In India and China.

At this point, IT professionals in America need to focus effort on figuring out ways to increase tensions between India and Pakistan with the hope of eventually provoking nuclear war. It is the only way that we will ever have a *real* economic recovery in America.

Posted by: Firebug on January 28, 2004 04:58 AM

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The Post editorial board may be right or they may be wrong but "right-wing hackery"? The Post isn't the National Review. The editorial page has a generally liberal view point. The evident point of the editorial is to combat the growing protectionist tendencies among Democrats, which Brad presumably agrees with. Doubtless the editorial wasn't written by a professioanl economist and so the reasoning doesn't meet Brad's professional standards but "out-and-out lies"? The tone of this comment really shocks me. I think what's really eating Brad about the Post is the fact that they supported the Iraq war. He really can't stand the fact that a minority of liberals actually supported the war, it conflicts with his narrative that everything the Bush administration does is motivated by pure evil, rather than conviction on matters that reasonable people can disagree on. I think this blog is in danger of falling into left-wing hackery.

Posted by: Centrist Hack on January 28, 2004 06:39 AM

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Prof de Long once wrote a paper about the "liquidationist" theory of economists in the 1930s, and clearly their ghosts are haunting the WP. Prof de Long also claims the problem is one of deficient aggregate demand. How does one separate deficient demand from creative destruction? Doesnt churn in itself affect aggregate demand ? The late Fischer Black once claimed not to understand what on earth one meant by "Aggregate demand" as an entity with a life of its own.

Posted by: PEmberton on January 28, 2004 06:46 AM

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Centrist Hack wrote, "The Post isn't the National Review. The editorial page has a generally liberal view point."

Liberal? Hardly. The Post hasn't been liberal at least since the Reaganite 80s.

These days, their unsigned editorials urge the Democrats to allow Bush's far-right judicial appointments a floor vote. Liberal? Nope.

Posted by: liberal on January 28, 2004 06:46 AM

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"the bigger question is whether jobless recoveries are a bad thing."

Here's how it works. Lots of people lose their jobs or are shunted into lower-paying employment, which makes them more productive, especially those who don't work at all. Result: less for them, more for me.

We continue this process through recessions and recoveries, lowering standards of living throughout the population. Result: less for them, more for me.

Finally, we outsource editorial writer jobs to say, India, where we can hire stupidity with lower overhead then the stupidity we're forced to live with in the U.S., then we lower the price of the Washington Post. Result: Less for them, more for me.

If there is social unrest, we hire (at piece work rates) the aforementioned productive forces to bonk the the socially restive over the heads with hardback copies of Ayn Rand's "Atlas Shrugged". Result: less of them, more of me.

Posted by: John Thullen on January 28, 2004 06:50 AM

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The WaPo is my hometown paper and I have been - over the last decade - totally ashamed of the hypocritical idiocy that has come to dominate the editorial policy - from the silly and over-the-top attacks on the Clinton administration to the uncritical support for the stupid and ruinous war with Iraq. If the mother of the current publisher were still alive I suspect he might be invited out to the woodshed for a good whipping. The current paper is a betrayal of decades of more serious and responsible reporting and editorial support for the republic.

The current "end of times" American empire situation is largely the result of more than willing support from both the WaPo and the NYTimes. If we had a "free" press things might be different. But our major newspapers are only slightly less enthusiastic than FOX News as instruments of propaganda for the new American idiocy.

God save us all.

Posted by: SOB on January 28, 2004 07:01 AM

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The line that struck me was:

"Each worker can produce more, meaning that he or she can be paid more."

But that isn't what happens.

Posted by: Jeff Dietz on January 28, 2004 07:03 AM

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"open trade should be accompanied by social safety net" Amen. And that is precisely the blame that Mr. Bush deserves. He and the GOP have been slow to provide extended unemployment benefits. They have been too little too late with workforce training. They have not used the recession and workforce available to repair infrastructure and build new infrastructure to support he upturn. They have not taken steps to redistribute existing wealth to increase demand. They have not supported international policies that would increase international demand.

They have not provided money to the states to keep infrastructure projects from being cancelled and workers laid off. They have instead given government largess to dinosaur industries like big oil and gas, tariffs to big steel and other misallocations of funds that are a drag on the economy. The steel tariffs did irreperable harm to steel manufacturing in the US. US mfg could not compete with foreign parts made from cheap steel that cost less than the tariff steel prices in the US. The only correct economic policy is the low interest rates and that is the Fed not Bush.

I do think the Dems need to make a very clear case for those steps they would take that would correct the oversights of the Bush economic policy.

Posted by: bakho on January 28, 2004 07:06 AM

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The WaPo's overall quality has declined (I think significantly) since Donald Graham took over. Specifically, the op/ed pages have become increasingly strident and right wing since the late 1990's. When Michael Kelly was alive and writing, the op/ed pages looked like those in the WSJ.

WaPo's editorial support of the war in Iraq was almost entirely driven by Jim Hoagland, whose zeal for invading Iraq began in the late 1980's. Hoagland's cost-benefit calculus is essentially that no cost is too great for the elimination of Saddam. It is the standard right-wing pablum: patriotism as long as I don't have to sacrifice. Look for WaPo to endorse Bush's re-election based solely on Iraq.

Although this is completly anecdotal, I sense that there has been a response. On the tony Red Line of DC's Metro system, I see many fewer people reading the WaPo. Increasingly, I see people reading the US edition of The Financial Times. While I don't necessarily think it's been a response, the WaPo now publishes a tabloid version, the success of which is not very evident on the Metro.

Posted by: SavageView on January 28, 2004 07:07 AM

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(Here's CNN aiding and abetting WaPo and other apologists for the "Jobs & Growth" administration's dismal record on jobs. During yesterday's (Jan 27/04) Inside Politics (transcript) here's how "journalist" Judy Woodruff handled "positive" jobs news):

WOODRUFF: Ed Gillespie?

GILLESPIE: Judy, if I could -- yes -- if I could just point something out because, Terry, you may not like the facts, but the facts are this: over 500,000 jobs have been created in this economy since August. Now, we have more to do, and we're not going rest until every American who wants a job can find a job.

But you can't deny the fact that there was an 8.2 percent growth rate in the economy for the last quarter for which data are available. Productivity is at a 20-year high. And it's interesting; Democrats have clearly come to the conclusion that what is best for the American people is what's worst for them politically.

So when we see this kind of -- the numbers you cited, Judy, the jump in consumer confidence, the positive developments in the job market, the positive developments in gross domestic product, Terry looks like his dog just died, because it's not in his political interest. But that doesn't mean you can rewrite the facts. So when he says no jobs have been created, let's be clear. He is factually inaccurate, and that is not an accurate statement whatsoever. And if you look at the data, it doesn't support it.

WOODRUFF: All right.

(That's some mighty powerful journalism happenin' there. Judy Woodruff not only lets Ed "Grimley" Gillespie falsely accuse critics of "factual innacuracy", but lets Ed happy-dance the creation of 500,000 jobs -- roughly a third of the 360,000/mo average Bush claimed the tax cuts would create starting July/03 (and only 1000 jobs created nationally in December/03.) Info via EPI.)

Posted by: Peanut on January 28, 2004 07:12 AM

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Yeah, that's a pretty bad article. However, I have one question:

"The Payroll Survey--which is our best set of estimates..."

What about the household employment survey? I've argued with Bill Hobbs (www.billhobbs.com) about this and am still not sure how to take it into account.

http://tinyurl.com/2lfr3

Mr. Hobbs points to a claim by Bear Stearns which says that the household survey is correct and the paryroll data is wrong:

(acrobat file)
http://billhobbs.com/hobbsonline/bearstearns.pdf

So, any thoughts on this?

Posted by: Bolo on January 28, 2004 07:31 AM

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>>Mr. Hobbs points to a claim by Bear Stearns which says that the household survey is correct and the paryroll data is wrong:<<

It's possible that the Payroll Survey is wrong, and the Household Survey is right over the past nine months or so. But there's no evidence that that is the case. And the Payroll Survey looks pretty good up through early 2003. Bear Stearns is not trustworthy.

Posted by: Brad DeLong on January 28, 2004 07:35 AM

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That editorial from the WaPo is amusing especially when one considers their snickering about those jobless recoveries seen in Europe. In Europe, something like that is always seen as a sign of malaise that will, inevitably, lead to the decline of Europe. I love how they're doing some economical yoga here even though I dare to predict that that kind of yoga is detrimental for your health - mental and otherwise.

Posted by: Joerg on January 28, 2004 07:42 AM

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Jeff Dietz hits the nail on the head: My husband is working 3 times as hard as 3 years ago, before a few dozen of his colleagues were laid off. However, his medical insurance payments have now outpaced his raises, meaning he makes less money. Ain't recovery great?
I guess we should be thankful, at least he is still employed.

Posted by: Heike on January 28, 2004 08:02 AM

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Bush economists are certain about the existence of jobs related program activities.

Posted by: The Perlustrator on January 28, 2004 08:11 AM

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> "Each worker can produce more, meaning that he or she can be paid more."

Indeed, this doesn't happen. That 'can' is particularly weaselish. Arguing from 'ought' to 'is' is one of those fallacies you come to notice.

Posted by: ahem on January 28, 2004 08:14 AM

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I had the same experience four about seven years ago in a public corporation which really did need to become more efficient. After about three years of cost-cutting, out of an office of 3.6 FTE I was the only only left. Many jobs proved to be unnecessary -- I threw out 90% of our paper files (probably 2-300 lb of paper). And obviously I didn't take over all 3.6 worth of jobs -- some were reassigned.

For me, my pay increased 30% in about three years, my skill level increased significantly (say 100%), the quantity of work I did probably doubled (yes, we **were** featherbedded), and the stress was multiplied ten times. I didn't get a good night's sleep for over a year.

With the pay increases, I ended up earning 60% -- 80% of any of the individuals I replaced. I was not promoted into one of their positions.

Posted by: zizka / John Emerson on January 28, 2004 08:38 AM

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Here's an excellent 2002 CJR article on today's WaPo: http://www.cjr.org/issues/2002/5/wash-stability.asp

Note that the late and extremely influential Meg Greenfield is described as having had "strong neoconservative leanings."

Posted by: penalcolony on January 28, 2004 08:40 AM

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It's a fact of life in Washington that the WP reflects the views of the commentariat-- which took a sharp right turn during the Clinton administration, partly because of a deep personal distaste for those hicks from Arkansas, and has never turned back.

Posted by: Matt on January 28, 2004 08:41 AM

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Matt, I agree completely. Indeed, it's my long-standing opinion that so great was the hatred of the punditocracy for clinton that it became convinced that anything said against him was acceptable, no matter how foolish or inaccurate.

And these tendencies have stayed in place, and not only in the Washington Post.

Posted by: howard on January 28, 2004 08:47 AM

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As smart labor is now a commodity we clearly need more capital incentives.

Or (oops) is it the other way around?

Posted by: Fast Pete on January 28, 2004 08:50 AM

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Maybe the reason we never have recovered jobs is that we never were in what Keynes would describe as a recession at all. In Keynesian terms, maybe we went not from full employment to a recessionary gap, but rather from an inflationary gap to full employment. But inflation was under control, wasn't it? Was it? What were stock prices doing? What about housing prices?

What I think happened was that we went into an inflationary gap around 1997/98, but that it was masked by temporary drops in oil and gas prices, and by massive increases in productivity, which were in turn masked by the venture capital bubble. By the time oil prices returned to their equilibrium level, the gap was closing.

This theory explains

a) the lack of new employment - if we are currently at full employment, we shouldn't expect large amounts of new hiring. Keep in mind that historically "Full employment" included about 5.5%-6.0% unemployment - where we are now.

b) how we managed to have 2-3% unemployment without wage-push inflation. We probably did have wage-push, but it happened in the zero product high-tech sector(Pets.com) and showed up as asset price inflation. Certainly high tech wages "inflated" far beyond anyplace they had any business being. It was also masked by the increases in productivity -

c) the "missing productivity growth" of the 90's. Instead of showing up in prices, the productivity growth showed up as massive DROPS in real (hours worked) prices of many goods. GDP didn't change in dollar terms, but far more stuff was being produced. Houses are larger, and contain more electronic equipment, people have more clothes and food, and yet though GDP grew, it didn't grow as much as would be needed to explain the level of consumption by today's middle class compared to that of 20 years ago. So maybe we had -

d) Low GDP growth. In a commodity based monetary system, where the quantity of the commodity is fixed or exogenous, economic growth and increases in productivity will show up not as increases in dollar-calculated GDP, but rather partly or wholly as decreases in prices. What used to cost 10 ounces of gold will now cost 9. Kind of like the electronics sector, only all across the economy. Some of this may have been happening in the '90s, with a Fed seemingly targeting a 2.0 to 2.5% inflation rate in all economic circumstances.

Upshot? We shouldn't be expecting massive job growth. GDP and productivity, yes, as tech-bubble assets are reallocated to more productive uses, but not jobs, which are already in solid shape. LFPR should be topping out about now anyway, as the boomers start to retire and the entry to the work force of women starts to reach completion. If the wage bubble brought in extra people (people who would work for high wages, but find it too onerous at whatever their equilibrium wage rate would be.) then participation should be down from its Clinton-era peaks. As it is.

Posted by: rvman on January 28, 2004 08:50 AM

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Matt and Howard,

Taking your assessment as correct, I come to a odd, and somewhat worrying conclusion. Our opinion-making elite is not elite, or at least not elitist. However Clinton may have used his intellect, it was the most formidable presidential intellect since Nixon. His policies were intellectually more easily justified than those of the current president. Maybe it's just me, but I though the opinion elite was supposed to point out what is smart and what is dumb, what is consistent and what is a sham. We have barstool punditry now? Go with the flow, let you bias be your guide?

The pundits took something about Bill ill. Pop history wants it to be his zipper. Slightly less pop history wants it to be his slickness, but even that is a caricature.

Posted by: K Harris on January 28, 2004 08:59 AM

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K Harris wrote,

"Maybe it's just me, but I though the opinion elite was supposed to point out what is smart and what is dumb, what is consistent and what is a sham."

Would that it were so. Was it ever so? I doubt it.

"The pundits took something about Bill ill." David Broder is a good example of this.

I would claim it's due to
(1) Journalists as a class are more interested in "human stories" than public policy;
(2) The *most* elite journalists make a lot of money, and like the Bush tax cuts.

Posted by: liberal on January 28, 2004 09:13 AM

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If you would allow a question from someone having little more economic knowledge than balancing the family checkbook...

Am I the only one who saw an affrontery in the "Firms have to create jobs..." yada, yada? Is there no such thing as technological evolution anymore? It is as if they are saying "Well, we're stuck now because all we make are 33 1/3 LP's and now that China and India are making them cheaper...huh, What's a CD?"
More succinctly: If the hypothetical cargo-ships full of cash dumped down the black hole called 'Man-on-Moon/Mars' were deployed in say, alternative energy exploration, could that not lead to substantial job gains...y'know, being a world leader in new technological fields... (of course I mean other fields of technology in addition to energy)?
Sorry if this is either too vague or too naive a post.

Posted by: john on January 28, 2004 09:17 AM

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Washington Post right wing? Tried the Washington Times lately?

Posted by: Jim Harris on January 28, 2004 09:28 AM

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K Harris, this is a really complex matter, and in a blog post, i'll just make some cursory comments.

I think most of the members of the punditocracy think that they are the smartest kids arounds. They hate it when someone smarter than them becomes president - or even powerful or famous.

I also think that most of the punditocracy believes certain things about the american people (whether right or wrong) and writes to those perceptions.

So, in short, we have, in your analogy, a reasonably smart person, sitting at a bar, trying to fit in with what he or she thinks are the expectations and the prejudices of the people at the next few bar stools.

John, innovation is far from dead; indeed, it's a great strength of the american economy. How to develop appropriate incentives to encourage innovation, though, that's a tougher one....

Posted by: howard on January 28, 2004 09:31 AM

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The Washington Times is not, by any plausible definition, a newspaper.

Posted by: Matt on January 28, 2004 09:34 AM

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Ah. But this is the _Post_...

Posted by: Brad DeLong on January 28, 2004 09:34 AM

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K Harris, sorry, i meant to finish my sentence off this way!

"So, in short, we have, in your analogy, a reasonably smart person, sitting at a bar, trying to fit in with what he or she thinks are the expectations and the prejudices of the people at the next few bar stools, and resentful of anyone either smarter than he or she is or of anyone better able to fit in with the people at the next few bar stools."

Posted by: howard on January 28, 2004 09:36 AM

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One thing conspicuously left out of this article was any mention of what might replace the 2.3 million jobs lost. What new industry might come along and provide the expanse of jobs necessary to stir up demand for the future. In the 1990s, of course, it was the internet and all the possibilities that that held in store for marketing, manufacturing of IT infrastructure, computing services, etc. Now many of these IT jobs have either disappeared or moved to India where a well-educated, cheap labor force is happily sopping them up. Right now the only job-producing industry out there is housing construction, and that has more to do with interest rates than anything else. It's hard to imagine a major job-producing recovery based solely on new housing and refinancing. So what will it be? The problem is we might not be so lucky as we were in the 1990s when the new gig came along so quickly. Any ideas?

Posted by: Elrod on January 28, 2004 09:38 AM

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K Harris:
"Our opinion-making elite is not elite, or at least not elitist."

Bull. Their attitude on the economy is 'how are the markets doing?'. For the majority of Americans, who have nothing in the stock market, or less than would be wiped out in a layoff, jobs are more important. Their attitude towards jobs is pretty much 'wait, they're coming, sometime after corporate profits go up'.

Read the business section of almost *any* newspaper, from your own economic perspective, not from the perspective of a rich person, and see what it looks like.

They've allowed Bush to present himself as an honest businessman/patriotic American/Christan guy, while he's actuall an elitist rich man's son, who got everything that he ever got through connections, and whose career has been marked by incompetancy and corruption.

This was after 8 years of unrelenting attacks on Clinton. I don't think that the mainsteam media ever found something they wouldn't print.

They just got through painting Dean as a wild-eyed leftist.


Posted by: Barry on January 28, 2004 09:38 AM

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Capital flows back to America and creates job? Oh goody! That means we can all be waiters or salespersons at Neiman Marcus. What a snow job.

Posted by: Lynne on January 28, 2004 09:39 AM

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Well it’s pretty clear to me at least that these falsehoods and inaccuracies are being floated by Bush moles via the Post to air and improve slogans for the campaign. They’re listening in, to hear how we all react. Do other vendors adopt it for re-spew, or is it soon torpedoed? Then try something else...

The Administration may be very concerned that Bush is going to get pinned for shortsightedness in stimulative policy.

I think it’s okay if the Post runs this stuff, but it should be bylined so we can check the traducing credentials. Or just run the headline “More Crap from the White House”.

The Washington Post was my remaining hope for solid news reportage, but given their editorial softness, that hope has been fading. The New York Times has been turning into People since they initiated their national street edition. They tow the State Dept. party line (I believe they still haven't copped to the total death count in East Timor, 25 years ago) and their environmental science analyses are abysmal. The Economist lost its hard reliance on quantitative facts when the previous editor retired, and nonsense is sneaking in.

To be fair, the amount of information necessary to understand the world is rocketing to complex new dimensions. As the division of labors takes each of us further into speciality, language for the common whole is lost, shortened, sloganized. It’s unclear whether prose can do it justice in short formats, except at the comprehension-level of college professors.

And then, of course, reading is devalued everywhere, even among college grads.

There’s now a lot you may depend upon, if you aim to confound the world.

Posted by: Lee A. on January 28, 2004 09:57 AM

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Seems to me they treat this job-LOSS recovery as a mere job-less recovery, which downplays the seriousness. But that bit, "CAN pay higher salaries" is pretty telling! Why would they pay higher salaries when the unemployment rate exerts such pressure down on salaries?

Posted by: Tubino on January 28, 2004 10:01 AM

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The word on the ground here in DC, and that starts from Post reporters, is that the editorial board has gone neo-con. The Post is no longer a liberal paper.

Posted by: Sam on January 28, 2004 10:16 AM

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>>Maybe the reason we never have recovered jobs is that we never were in what Keynes would describe as a recession at all. In Keynesian terms, maybe we went not from full employment to a recessionary gap, but rather from an inflationary gap to full employment.<<

A Keynesian inflationary gap is an excess of aggregate demand for goods and services over full-employment potential output. It produces inflation (in the prices of goods and services), because that's where the excess demand is.

Posted by: Brad DeLong on January 28, 2004 10:18 AM

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The purge of liberals from the editorial pages of the WaPost began and was completed under K. Graham, so don't hold the dead blameless.

The fact is that both the NY Times and WaPost were historically used by the CIA, through the recruitment of their senior management and reporters (Operation Mockingbird), with Phillip Graham a CIA operative himself. Then, as both papers became huge media conglomerates, with ample stakes at risk for 'supply side' nostrums, and seats in their boards of directors held by stakeholders such as giant insurance companies, their editorial policies became ever more business friendly and oriented.

The NY Times editorialized about the 'stench of failure' in the Clinton administration in January of 1993 PRIOR to Clinton's inauguration!!

Posted by: sofla on January 28, 2004 10:25 AM

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The no jobs recovery is due to FEAR. Fear is unsettling and we won't be booming again until the fearmongering quiets down.

And the much touted boost in productivity is less due to improved work-place efficiency than the fact that your co-worker was fired and you are doing her job. Exhausting.

Posted by: epistemology on January 28, 2004 10:30 AM

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"The pundits took something about Bill ill."

What stunned me during the tar&feather Bill era was the blatant disregard the mainstream press had for both the vote of people for Clinton and the welfare of the country and the presidency as an institution. The press carried out a trashing of the institution for absolutely no justifiable reason. It was a hack attack, a sort of witch hunt. The NYTimes has earned my tolerance, if not my respect, by their stabs at independence from administration pablum (Krugman for example) but I still despise the WaPo.

Posted by: camille roy on January 28, 2004 10:56 AM

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"There are the lapses into incoherence: 'firms have to create jobs they never had before, which takes longer than recreating old ones...'

What's incoherent about that? Take your complaint to the researchers at the Fed.
http://www.ny.frb.org/newsevents/news/research/2003/rp030828.html

"A six month lag I could understand. A twelve-month lag I could admit as a possibility. But 27 months? Nope."

Why not? The employment level didn't recover from the '90 recession until more than two years, and more than 4 consecutive quarters of 4% GDP growth (which we haven't had) had passed.

Since the Fed paper says the job adjustment is significantly more structural now than then, we'd expect a significantly slower-than-then recovery of the jobs number, right?

What's "incoherent" about the Fed paper or the WaPo editorial saying that? Is it wrong? Maybe. Incoherent? No.

Oh, and look at how the unemployment rate is *so much lower* today than two years after the recession of '90 -- two full points lower. The Mystery of the Unemployment Rate That Didn't Rise. That's quite relevant to all this....

"a net of 2.3 million jobs destroyed during our current period of recession-like activities. Compare that to a maximum net decline of 1.3 million jobs over 1990-1992,"

Why, oh why, is the "employment bubble" never mentioned in the context of the starting point of this fall?

Remember when Krugman ridiculed the idea that GDP could grow 4% for five years because it would drive the unemployment rate down to 1.5% -- just before it did, without the unemployment rate ever falling below 4%? He made the mistake of overlooking what process in a bubble boom?

On the other side of the bubble might the same process be unwound? Might this explain the Mystery of the Low Unemployment Rate? And put the job fall number in a more reasonable context? Maybe ... yet it's never worth even a mention.

"Employment is lagging not because businesses are ... slow to hire quickly, but because demand growth has been slower than productivity growth. Policies that had produced faster demand growth ... would have produced faster employment growth as well."

Easy to say if one doesn't think about the argument in the Fed paper above, while dismissing it as unthinking. ;-) And while not thinking about the implications of the employment bubble either.

Also easy to say without specifying the appropriate amount of stimulus that would have done the presumed trick.

This recession in fact was countered with the greatest amount of fiscal stimulus of any recession since WWII -- Gene Steuerle has pointed out that the fiscal stimulus was actually larger than the amount of GDP lost below trend! http://www.urban.org/url.cfm?ID=1000470

And as to monetary stimulus, when was the last time the Fed kept real short rates this low for so long? The combined fiscal/monetary stimulus is unprecedented in size. Yet employment is where it is.

So before hearing "even more stimulus!" I'd sure like to hear an explanation of the job market's unprecedented weak response to the extraordinarily huge amount of stimulus it has already received. How is that? Something structural, perhaps? Compounded by a bubble after-effect?

Then I'd be interested in how much more stimulus should have been applied, in actual dollar terms -- relative to the hundreds of billions already applied. And how this should have been accomplished.

"There are the total adbdications of rationality in the interest of providing a fig-leaf for the Bush administration.."

Yes, yes, the Wapo editors are well-known as rabid right-wing partisans and irrational apologists for Bush.

Or, maybe not. In which case this is just another example of the reflexive, instant resort to insult and name calling around here that's becoming more remindful of usenet all the time. ;-(

Posted by: Jim Glass on January 28, 2004 10:57 AM

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WaPo's employment of Glass also reflects the current "quality" of the newspaper.

Posted by: SavageView on January 28, 2004 11:08 AM

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http://www.epinet.org/content.cfm/webfeatures_snapshots

The lack of job growth over the current recovery has been amply documented. Less well known is the toll that the persistently weak labor market is taking on the living standards of middle- and lower wage workers.

The trend reveals two notable facts: first, those in the middle of the earnings scale and below (at or below the 50th percentile) are losing ground—their weekly earnings were lower, after adjusting for inflation, at the end of 2003 than one year earlier. Second, the pattern of earnings changes is highly skewed: the losses are greatest for the lowest earners, while the weekly earnings of those at the top of the scale (the 90th percentile) grew by 1.1%. This pattern of earnings growth suggests that while the economy is expanding, the benefits of growth are flowing to those at the top of the wage scale.

Posted by: anne on January 28, 2004 11:18 AM

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Jim Glass: Might the issue be, NOT the AMOUNT of stimulus--which may sink us all!--but WHICH PORTION of the population it went to, given the capacity underutilization?

Indeed by handing cash back mostly to investors, we would appear to have accelerated global labor arbitrage, instead of FIRST helping out our poorer classes to be able to deal with it more productively.

And before this multiplied disaster corrects itself, there may yet be another multiplicand: the budget deficit.


Posted by: Lee A. on January 28, 2004 11:40 AM

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the rules never change...the scum will steal and blame everyone else for the losses...the able are
taking with both hands and cutting off the ways of
others to stop them or control the bleeding of jobs...the future will be enclaves of gated and guarded bubble towns excluding the poor and disenfranchised...the population will divide into
haves and havenots and you'd better save alot of cash to play in this era...the simple things are the most powerful and have the most influence on
reality...who are the police protecting when they
attack congregations of normal people trying to
express their antigovernmental views? this is
the future for to many of us...free speech zones
should be enough to convince any rational citizen
of the USA to dump these miscreants and lying scum
where is the payoff? who gets the prize? where is
the truth when the preznit lies and says so what?

Posted by: xaxx on January 28, 2004 11:57 AM

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the rules never change...the scum will steal and blame everyone else for the losses...the able are
taking with both hands and cutting off the ways of
others to stop them or control the bleeding of jobs...the future will be enclaves of gated and guarded bubble towns excluding the poor and disenfranchised...the population will divide into
haves and havenots and you'd better save alot of cash to play in this era...the simple things are the most powerful and have the most influence on
reality...who are the police protecting when they
attack congregations of normal people trying to
express their antigovernmental views? this is
the future for to many of us...free speech zones
should be enough to convince any rational citizen
of the USA to dump these miscreants and lying scum
where is the payoff? who gets the prize? where is
the truth when the preznit lies and says so what?

Posted by: xaxx on January 28, 2004 11:57 AM

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Jim Glass, if you don't like name-calling, you're a mangy cur. Get with the program. Brad is a Mafia gutter-fighter, as we all know.

I remember seeing pieces by Meg Greenfield in the early Reagan years promoting a thoughtful approach instead of the knee-jerk liberal approach. I remember wondering at the time when she was actually going to do some thinking and write about it, because her pieces were singularly lacking in substance.

What I was seeing was the DC punditocracy accomodating themselves to the Reagan program in order to stay relevant. Several columnists who failed to do so -- e.g. Garry Wills and Nicolas von Hoffman (neither of whom was a doctinaire liberal). "Thoughfulness" had nothing to do with thinking, and had everything to do with stancing.

Alterman's "Sound and the Fury" tells the story of these years. Greenfield was not a big name in her own right, but she was a gatekeeper at the WaPo and her dinky little columns were marching orders for everyone else.

P.S. Alterman's books are great, his articles are good, but his blog can be terrible. Especially yesterday and the day before that with his cute mentions of Stalin.

PPS. Jeff and Meg Greenfield apparently weren't related, but they were similiar in many creepy respects.

Posted by: zizka / John Emerson on January 28, 2004 12:33 PM

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Compare the WaPo article to the Christian Science Monitor article.

http://csmonitor.com/2004/0128/p01s03-usec.html

I am usually pleasantly surprised by their analysis. Peter Grier seems to be talking to the right people and getting the facts correct. He even gets the point about the drop in revenue that most of the press misses. Maybe we do have a better press corp but the WaPo is not the right place to look for it.

Posted by: bakho on January 28, 2004 12:36 PM

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Where does this "bubble" theory of employment originate and how does it fit with the MI data of unemployment over 7%?

http://www.detnews.com/2004/business/0401/24/business-44246.htm

Is 7% a natural rate? Natural or not, MI voters are not happy and that will cost Bush MI. The southern neighbor OH is not much better and Bush may lose OH on jobs. OH may well cost him the election.

Unemployment among blacks dropped below 10% under Clinton. How many votes will Bush get now that we are back over 10%? If there was a bubble, we want our bubble back. If there was not a bubble, we still want new leadership.

Posted by: bakho on January 28, 2004 12:51 PM

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Jim Glass, to start with the easiest point first, yes, the WaPo editorial board are irrational apologists for Bush. Do you doubt that?

As for the others: a.) aggregate fiscal stimulus, which is what Bush has created, isn't the same as aggregate job-creating stimulus; b.) you overrate the "bubble." The "bubble" occurred in the tech sector exclusively, not the entire economy; c.) structural changes are always going on in the economy - there's nothing novel about that; d.) the unemployment rate is driven, in part, by the number of "discouraged workers." Simply looking at the unemployment rate without looking at the number of "discouraged workers" is the kind of thing the irrational pro-Bush WaPo editorialists would do.

Posted by: howard on January 28, 2004 12:52 PM

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Jim,
The 12-month lag that Brad admits as a possibility is almost exactly what chart 1 of the doc you linked to shows occurring in the early 90s. Brad doesn't appear to be talking about a 27-month gap until employment recovered to previous levels (as in the early 90s) (although you do contrast the 2-year return to pre-recession levels of the early 90s with his 27-month figure), he's apparently talking about a 27-month lag between the end of the recession and the *beginning* of a significant upward trend in employment.

Those are, obviously, very different things. And, chart 1 shows the growing discrepancy in employment trends between these two recoveries which you suggest are very similar.

Which is not to say that the bubble is of no account, but the numbers you claim are similar are not, in fact.

Your criticism also misses the mark here:
""a net of 2.3 million jobs destroyed during our current period of recession-like activities. Compare that to a maximum net decline of 1.3 million jobs over 1990-1992,"
Why, oh why, is the "employment bubble" never mentioned in the context of the starting point of this fall?"

Brad mentions this to prove the lie of the original statement "fewer jobs were destroyed during the downturn", which he mentioned in the previous sentence. He doesn't do an in-depth analysis, he merely points out that the statement was incorrect according to the payroll survey. You aren't even nit-picking with this point, you're just failing to read carefully in your rush to criticize.

(anyway, not to speak for Brad, but that's what Im seeing...)

Wu

Posted by: Carleton Wu on January 28, 2004 02:01 PM

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we're just like the waltons, we're just waiting for the depression to end.

and

we're fucking stupid to give work to another loser named bush without constant rioting in the streets

Posted by: kei & yuri on January 28, 2004 02:16 PM

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If the restructuring were downsizing CEO salaries, I'd agree, but I doubt that's the labor sector they had in mind.

Posted by: chris on January 28, 2004 02:22 PM

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"Then I'd be interested in how much more stimulus should have been applied, in actual dollar terms -- relative to the hundreds of billions already applied. And how this should have been accomplished.

Jim Glass"

In the infrastructure. Give cities, counties and states the money to repair and/or expand their roads, streets, bridges, water and sewer systems, parks, airports, docks, schools and transit systems.

This will put people to work doing things that benefit us all. The money stays here, and turns over in local economies all over the country. It is a positive stimulus in that, when it's all over with, we have something to show for it--my idea of money well-spent.


What happened though was that most of the "stimulus" actually goes to the uppermost 5% of the population, and they ship the money overseas, where it earns them even more money. Great for the "aggregate" figures, I guess, but it really sucks on Main Street.


There's a lot more in your post that I disagree with too, but I haven't figured out how to do that with this dratted Haloscan.

Posted by: James Hogan on January 28, 2004 05:07 PM

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It all boils down to a simple question: "Are you better off than you were four years ago?"

:-)

Posted by: CH on January 28, 2004 05:14 PM

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James Hogan wrote, "There's a lot more in your post that I disagree with too, but I haven't figured out how to do that with this dratted Haloscan."

It's not Haloscan, it's Movable Type.

If your problem is that posts take forever to appear, here's how I deal with it:
(1) Press "post".
(2) Press "Preview".

Your comment should both be posted as well as appear in the preview pane. (Don't press post again.)

Posted by: liberal on January 28, 2004 05:59 PM

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Figure it this way. 2 million some odd jobs lost over 4 years. If the impact mirrors the election results, roughly 1 million previous Bush voters out of work. Roughly half of those surely must be sane enough to let their personal experience sway their vote. Net 500,000 new votes for other-than-Bush. The other half still figure they will be Bill Gates if they work hard enough, that is if they have been beaten over the head with the Altas Shrugged as suggested earlier.

Posted by: memory lane on January 28, 2004 07:45 PM

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Re Glass post:
I agree with Carleton Wu's comment. My reading of Chart 1 is that the the upturn in job growth is lagging behind the Early 90s episode by at least 8-10 months, and this is as of August 2003 when the Fed paper was published.

Anyway, one of the paper's conclusions is that "the current shortfall in payroll growth owes more to low job creation than widespread job elimination." So even if structural change is a more important factor now than in previous recessions, the creative destruction is a little lopsided. Mild dose of destruction, big dose of no new creation.

Posted by: jml on January 28, 2004 08:47 PM

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>James Hogan wrote, "There's a lot more in your post that I disagree with too, but I haven't figured out how to do that with this dratted Haloscan."

It's not Haloscan, it's Movable Type.

If your problem is that posts take forever to appear, here's how I deal with it:
(1) Press "post".
(2) Press "Preview".

Your comment should both be posted as well as appear in the preview pane. (Don't press post again.)<

Posted by liberal at January 28, 2004 05:59 PM

Thanks for the tips on responding, but that's not the problem.

Whenever I copy a post, and wish to comment on various parts of it, the movable type will not let me do that. If I try to interject a comment into the copied post, it disregards it--no--it deletes all my comments unless I put them at the bottom of the copied post.

Even when I "preview" the post and it looks like I want it to look like, whenever it posts it reverts to the copied text.

So if you have seen some nonsensical posts bearing my name, that's what happened.

Surely there's a better way to run a railroad than this.

Posted by: james hogan on January 28, 2004 09:02 PM

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>>Maybe the reason we never have recovered jobs is that we never were in what Keynes would describe as a recession at all. In Keynesian terms, maybe we went not from full employment to a recessionary gap, but rather from an inflationary gap to full employment. A Keynesian inflationary gap is an excess of aggregate demand for goods and services over full-employment potential output. It produces inflation (in the prices of goods and services), because that's where the excess demand is. <

I had a bit of trouble understanding this post because it left me to infer both the conclusion and one of the premises. What you're saying is

1. An inflationary gap produces price inflation, by definition.
2. We didn't have price inflation.
3. We weren't in an inflationary gap.

Deductive, but too brief to be more convincing than rvman's argument, which seems to make a lot of sense and is a cool new perspective.

Posted by: Noumenon on January 28, 2004 10:36 PM

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Men are close to one another by nature. They diverge as a result of repeated practice.

Posted by: Levy Rachel on March 17, 2004 06:56 PM

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Live your beliefs and you can turn the world around.

Posted by: Cabell Hannah on May 2, 2004 01:17 PM

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Do give books - religious or otherwise - for Christmas. They're never fattening, seldom sinful, and permanently personal.

Posted by: Green Matthew on May 3, 2004 12:46 AM

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What else can i say after all this ?!

Posted by: Covington Barrie Tragash on June 30, 2004 06:07 AM

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