March 05, 2004

One Million Payroll Jobs Short Since October

The Bush administration CEA-Treasury-OMB macroeconomic forecast--the one on top of which the administration's budget estimates are built, and that was signed off on and approved by Treasury Secretary Snow, OMB Director Bolten, NEC Chair Friedman, and CEA Chair Mankiw--was put to bed early last December. It was released on February 9. Since then, administration officials have fled from the employment growth component of their own forecast as if it were some ravenous carniverous monster from a horror movie.

It is worth noting that, according to today's February employment release, the pace of payroll job "growth" in America was running 1.07 million behind the pace of the forecast put to bed only two months before. The forecast was already 1,071,000 jobs high the week that it was released.

That's a measure of how out-of-touch the Bush administration's High Politicians are with the state of the American labor market: from their perspective, we've had a million jobs' worth of surprising and unexpected bad employment news since December 2, 2003. For most of the rest of us, the employment news has been about what we expected.

Posted by DeLong at March 5, 2004 07:39 AM | TrackBack | | Other weblogs commenting on this post

I don't quite understand: the forecast was 1.07 million jobs high the week it was released, and it's *still* 1.07 million jobs high? Maybe a little graph showing actual vs. projected would help.

I note, BTW, that the press avoids mentioning the Federal projections and just talks about job growth less than an "expected" figure, which they apparently get from the private sector. No mention of the embarrassing Snow job the Feds released.

Posted by: BayMike on March 5, 2004 07:43 AM


Is it possible (or is just my paranoia working overtime?)that one reason for employers' reluctance to hire is that they have sub rosa plans to offshore more jobs in the near future? Obviously it's not something they're going to talk about--unless they have to. Could it be that the projected offshoring numbers for the near term in, say, infotech, have been ludicrously understated? (Disclaimer: I'm not an economist, and I don't even play one on TV!)

Posted by: sylny on March 5, 2004 07:49 AM


It is simple, in a moderate growth scenario you can either have jobs or productivity, not both.

Since corporations have no pricing power they have no choice but to go for productivity.

How much of the productivity is outsourcing is not known, but the few facts I have been able to pull together imply that outsourcing of services jobs is not that significant in overall economy,
but I have little confidence in that .

If outsourcing of services abroad is significant it implies that we are probably significantly overstating economic growth and productivity.

The political point is that the admin is running an economic model that is unrealistic and are now stuck with it, otherwise they would have to admit they made a mistake. But this admin never will do that.

It looks like the economy is slipping into a stagnation scenario and especially that capital
spending growth has already peaked and is starting to slow significantly. The only question remaining is how long can the consumer continue to sustain the economy without income growth, especially if energy prices remain high.
Moreover, if the economy does slip into a stagnation scenario--like in Japan -- the risks
of deflation becomes significant and believe me, no one wants that scenario.

Posted by: spencer on March 5, 2004 08:04 AM



I can't say I like the recent run-up in oil and gas prices, but this is not due to a conspiracy in any way. Even with the increase, the prices are not close to what we saw in 1980 in inflation adjusted terms, not that we want to go back to those prices!

There was a decent write-up from Morgan Stanley last month that pointed out that the booming Indian and Chinese economies are pushing global demand for petroleum up. This is pretty much a demand driven situation rather than OPEC manipulating the price.

Posted by: TCS on March 5, 2004 08:06 AM


Spencer, for us non-economists, how long do you estimate before the death spiral starts if things stay the same?

Posted by: Tim H. on March 5, 2004 08:15 AM


BayMike-- the expected number they are talking about is the Street estimate or forecast of monthly job creation. It has nothing to do with
the CEA forecast of job growth. The economic report of the President is now a dead issue as far as the press, the Street and the public are concerned. They have forgoten it.

Ricky -- to be unfair, we have a Texas oil man as president so why should you be surprised that
oil prices are near record highs. This should be the line the democrats give the press every chance they get. Most reporters will not understand and will buy the comment and start using it in their stories and so tar Bush with the responsibility for high oil prices.

How do you suggest Bush deal with the problem--
it seems you imply that we should invade Saudi
Arabia to get low oil prices. Wasn't that something the Admin expected when they decided
to invade Iraq. It did not work then, so why should it work now.

Maybe a reason oil prices are high is the strong Japanese, Chinese and Indian economies that means
world oil demand is stronger than expected? That is what industrial commodity prices imply, and commodity prices are a great leading indicator of oil prices. Oil prices have never peaked until after commodity prices peak and they usually
bottom together.

Posted by: spencer on March 5, 2004 08:20 AM


Frankly, if, as some people believe, the world is running low on oil, oil and gas prices SHOULD be high. That's the way the market is supposed to work, encouraging alternatives. Artificially trying to keep gas and other prices low will only make things worse in the long run.

Nobody bought (or, in America, built) small cars back in the 1970s until gas prices were deregulated.

Posted by: tbrosz on March 5, 2004 08:23 AM


Tim-- you really want me to be cynical, how about the death spiral starting when the new president raises taxes? Right now forecasters are counting very heavily on income tax refunds to power economy through the spring. Second, if rates do fall from current rates you could see another round of home refinancing to keep spending going.
But how long can consumers borrow their way to prosperity? i have no idea when death spiral starts, or even if it will but am extremely !!
worried about it.

Posted by: spencer on March 5, 2004 08:28 AM


Please help me with the chart; I don't know the institutional arrangement.

Am I correct in assuming that the CEA "Jobs and Growth" forecast was predicated on passage of the 2003 tax cut? So this was used to argue for passage?

Who are are the CEA Troika? (CEA, Treasury, and OMB?) What's ERP?

What's the "Blue Chip Consensus?"

Help me out of my ignorance.

Posted by: Batavicus on March 5, 2004 08:38 AM


Ricky you say "The gass prices are high? why? The oil prices are high? why? Because the OPEC, consisting of tyrants and other assorted enemies of America want a high oil price."

Here are the reasons I can think of:

1. The fall of the dollar. Blame it on Greenspan. Make dollars worth less, and the price of things must rise. Increasing oil prices are a rational response to lax monetary policy.

2. Increased demand from the rest of the world. We're not the only ones that need oil after all. As noted above, China and India are increasing demand quite a bit.

3. The end of easy oil. More info at if you are interested. Over the last few weeks, some major petroleum producers adjusted downward their estimated reserves, in line with what the pessimists have been saying about "peak oil" for years now.

Posted by: Mike Runge on March 5, 2004 08:46 AM


Yes, it looks like Hubbert was right - even before the recent downward adjustment, worldwide proven resrves had dropped 2001 to 2002 - from 1.0503 to 1.0477 trillion.

re China - from a net exporter of oil to the world's 2nd largest importer in less than 5 years.

The death spiral has already started - the recent stock market climb is only speculative inanity. Look at the parallel to 1929-31 - timeframe is different (no fiat currency back then), but bear rally pattern is the same.

Every day the eventual adjustment is delayed adds disproportionately to the eventual cost, in both money and human suffering. Krugman is right - it might be better to spend the next decade in New Zealand. (And one can always get a gig as an extra for Peter Jackson. btw, has anyone calculated the cost to the US economy of the runaway production [outsourcing to you civilians] of the Ring cycle?}

Posted by: fatbear on March 5, 2004 08:54 AM


Ricky: "[Bush] told the Arab dictators free your people or you will be destroyed just like Saddam, the Taliban and Al Qaida." Clueless. Utterly clueless. This man will tell himself any lie to make himself feel good about Bush.

Ricky: What is Saudi Arabia? It's a dictatorship with severe human rights abuses. It's also led by a clan with extremely strong and long-standing ties to the Bush family. And a long-time ally of the US. And our leading supplier of imported oil. Is Bush threatening S.A.? No. Now, let's suppose S.A. did become a democracy. What sort of party/coalition do you think would be voted in? Hint: think extreme Islamic fundamentalism. Would this government be an ally of the US? No. Would it continue to work closely with the Bush family? No.

Posted by: Moniker on March 5, 2004 09:13 AM


Spencer, I agree that the administration, the press, and the public are all ignoring the CEA-Troika forecast. But we have a president who believes strongly in "accountability", and I believe that slipshot forecasts will continue unless we take them seriously enough to continue to measure actual against their (thoughtful?) forecast. So I want the press to continue to refer to it--which they occasionally do, though still using the '2.6 million' jobs gained figure.

Posted by: BayMike on March 5, 2004 09:18 AM


"For most of the rest of us, the employment news has been about what we expected. "

Unless you're a forecaster on wall street. Most private sector expecations were over 100K. We're way under private sector predictions and I dnn't think most folks expected payroll numbers this low. Especially when other economic signals are strong.

In short, it's not just the CEA who's off on their job predictions.

Posted by: Hoo on March 5, 2004 09:36 AM


and those pipeline explosions in Iraq are caused by?

Posted by: Allen M on March 5, 2004 09:37 AM


Shorter Ricky Vandal:

It's everyone's fault but Bush's!

Smarter wingnuts, please.

Posted by: renato on March 5, 2004 09:42 AM


Ricky, prices in a monopoly actually ARE affected by supply and demand. The basic difference between a monopoly and a competitive market is that in a monopoly, prices are controlled by the monopolist, whereas in a perfect, theoretical competitive market, every firm takes whatever price they can get. Still, demand affects the optimal price for the monopolist firm in terms of what will make it the highest profits.

Posted by: Julian Elson on March 5, 2004 09:52 AM


I think Ricky Vandal's webpages says it all.
Be gentle with him, there's a gear or two slipping in his head.

Posted by: Freud on March 5, 2004 09:54 AM


Ricky, exactly! I had this same conversation with George last night. My suggestion was to going after Chavez, once he's removed oil prices should drop.

BTW, two words, Cubs, World series....

Posted by: God on March 5, 2004 10:10 AM


but... but... we invaded Iraq! The oil! All the oil! I thought gasoline was supposed to be a buck a gallon by now!

What the hell did we steal their oil for, if I can't fill up my SUV for under 20 bucks?

Posted by: renato on March 5, 2004 10:10 AM


Persistently weak job growth leads to labor force contraction

The nation's job market was far weaker than expected last month, according to today's report from the Bureau of Labor Statistics (BLS). Payrolls expanded by a mere 21,000, but even this amount was fully accounted for by government hiring. Private-sector employment was unchanged in February, the first such month since private-sector hiring picked up last September. The persistently weak labor market continues to take a toll on wage growth, with hourly wages up only 1.6% over the past year—the weakest growth rate since 1986.

In a sign that employers continue to be extremely reticent about committing to permanent hires, February's payroll gains were more than explained by the addition of 32,000 temporary jobs. Most other sectors showed small gains or losses, including manufacturing, which shed 3,000 jobs. While this is the 43rd consecutive month of employment contraction in the nation's factories, the loss of 3,000 jobs is the smallest reduction in any of those months.

A particularly notable aspect of the weak labor market is the declining trend in the share of the population in the labor force, i.e., the share of persons either working or seeking work. While February's unemployment rate was unchanged at 5.6%, this reflects the fact that the number of labor force participants fell steeply last month, by 392,000, presumably due to the lack of available jobs....

Posted by: anne on March 5, 2004 10:16 AM


Jenna, i think you mean Uncle Marvin.

When commentators ask what could be done to boost jobs, no one seems to have much of an idea. Please explain to me why it wouldn't make sense to have public works projects, like we had in the Depression? These are good jobs right here at home, and there are many infrastructure projects that need doing--schools, roads, bridges etc. Also, provide federal money to hire more police, fire and emergency health people. Good jobs here at home, and certainly needed. One obvious answer is the deficit--we could have done this two years ago, but we had tax cuts instead. Now the money is gone. Another reason is that we are providing services and infrastructure in Iraq to the tune of several bil, so we can't spend that money here. I admit I took Econ decades ago, but as a theoretical proposition, why doesn't it make sense to pump money into the economy to boost (some) jobs so those people will have more to spend and let the multiplier create more jobs?

Posted by: Mimikatz on March 5, 2004 10:18 AM


> The gass prices are high? why? The oil prices are high? why? Because the OPEC, consisting of tyrants and other assorted enemies of America want a high oil price.

Or perhaps the gass is high because the dollar iss low. Preciousss.

Posted by: ahem on March 5, 2004 10:20 AM


Err, on oil prices, check out the price of crude per barrel in Euros. Funny it has stayed consistent, or even gone down. OPEC set their benchmark price in Euros about two years ago. Will go find the link.

Posted by: chris/tx on March 5, 2004 10:31 AM



If I remember correctly, voters' perception of the health of the economy tends to gel about 8 months before an election.

That would be now.

Posted by: Alejandro Andreotti on March 5, 2004 10:36 AM


And what about carnival barker Greenspan, who has been promising that job growth is right around the corner? Is there no one whose reputation survives the undertow from the Bush administration?

Posted by: Bob H on March 5, 2004 10:39 AM


Social Security Scares

The annual report of the Social Security system's trustees reveals a system in pretty good financial shape. In fact, it would take only modest injections of money to maintain that system's current benefit levels for at least the next 75 years. Other reports, however, appear to portray a system in deep financial trouble. For example, a 2002 Treasury study, described on Tuesday in The New York Times, claims that Social Security and Medicare are $44 trillion in the red. What's the truth?

Here's a hint: while even right-wing politicians insist in public that they want to save Social Security, the ideologues shaping their views are itching for an excuse to dismantle the system. So you have to read alarming reports generated by people who work at ideologically driven institutions — a list that now, alas, includes the U.S. Treasury — with great care.

First, two words — "and Medicare" — make a huge difference. According to the Treasury study, only 16 percent of that $44 trillion shortfall comes from Social Security. Second, the supposed shortfall in both programs comes mainly from projections about the distant future; 62 percent of the combined shortfall comes after 2077.

So does the Treasury report show a looming Social Security crisis? No....

Posted by: anne on March 5, 2004 10:54 AM


Brad: Any chance we can get from you a comprehensive response (rebuttal?) to Norm Scheiber's peiece in TNR on Bush's lack of responsibility for the job losses? It's a fairly critical issue to the upcoming election.

Posted by: TomJ on March 5, 2004 10:56 AM


Economic question:

There used to be something called the "natural rate of unemployment," which usually hovered somewhere between 5 and 6 percent. Is this still considered a valid theory? Those numbers are over twenty years old. What would it be now? Were the unemployment rates of less than 4 percent real, or artifically low, driven by the boom, like the unemployment rate for gardeners in Holland would have been during the tulip craze?

Is there still such a term as "natural rate of unemployment," and if there is, how is it calculated?

What kind of jobs did we lose over the past couple of years, exactly? Manufacturing? Chips or cars? How many of these jobs were tied to the tech field? Does anyone have references on this?

Posted by: tbrosz on March 5, 2004 10:58 AM


OK, Overtime Vast right-wing conspiracy time:
It is my tin-foil hat hypothesis that the beneficiaries of W's tax cuts CAN get their company to hire more, but they would rather do it where it will help him most, so that he gets re-elected and keeps giving them tax breaks. And in the meantime, they are willing to run their companies inefficiently/not-as-profitably just for the payoff come April 15, 2005...

[/tinfoil hat]

Posted by: random on March 5, 2004 11:00 AM


"Now, let's suppose S.A. (Saudi Arabia) did become a democracy. What sort of party/coalition do you think would be voted in? Hint: think extreme Islamic fundamentalism"

Why would I think that?

The example of Iran, next door, seems to suggest that the general citizenry is getting pretty sick and tired of fundamentalism. Baghdad University professor of economics Hisham Al-Shama predicted that the Iraqi GDP (gross domestic product) will grow from its present level of US$25 billion to 250 billions within one decade. In any halfway democratic free market society, that wealth is better distributed among voters than national wealth is among current Saudi princelings, or among Iranian mullahs.

Shrub claims (surely incorrectly, because he's always wrong) that his political opponents are racists who believe that Arab Peoples are incapable of democracy, unsuited to freedom, and don't desire modern economies. Moniker, do you hope to suggest that the Shrub is portraying your opinions correctly after all?

Posted by: Pouncer on March 5, 2004 11:00 AM



"First, two words — "and Medicare" — make a huge difference. According to the Treasury study, only 16 percent of that $44 trillion shortfall comes from Social Security. Second, the supposed shortfall in both programs comes mainly from projections about the distant future; 62 percent of the combined shortfall comes after 2077."

First, seven trillion dollars isn't exactly chump change. And that being said, so what are you going to do about Medicare?

Second. Okay, the system isn't going to really go into the crapper until after I'm dead, so I guess that's okay. Wasn't it Keynes who dismissed objections about the long run implications of his policies with "in the long run, we're all dead?" I have two kids. How many do you have?

The truth is that massive entitlements and wealth redistribution are not a sustainable policy, and there's no getting around that.

Posted by: tbrosz on March 5, 2004 11:05 AM


Re oil prices in Euro vs Dollar:

Go to page 3 of the pdf file. Table shows Calendar 2004 swap over two years increasing 29% in dollars, less than 1% in Euros. I would say that OPEC has already benchmarked their prices in Euros, and high oil prices in the US are here to stay unless the dollar significantly increases in value (ie par) with the euro.

Posted by: chris/tx on March 5, 2004 11:08 AM


Ricky says "Some of you better take out your school books and read up on the subject. Oil prices have nothing to do with supply and demand. OPEC is a CARTEL."

Yes, OPEC is a cartel. And I won't be an apologist for them. But, they are not the driving force in the price of oil, as many other posts have already pointed out. The best argument, I think, was the post that claimed the price of oil in Euros has stayed flat. Also consider that the price of all commodities has risen in the last few years. Unless OPEC can influence the price of everything from soybeans to silver, it would be difficult to conclude that they are unfairly bidding up the price of oil by cutting production.

Posted by: Mike Runge on March 5, 2004 11:15 AM


Has anybody seen Ricky Vandal's website?
Amazing....truly amazing.

Posted by: Coriolanus on March 5, 2004 11:18 AM


Ricky - perhaps you and your Amazon princess can go visit all those nasty oil people and smite them. That'll teach them.

Posted by: agitpropre on March 5, 2004 11:29 AM


Trolls is trolls, ugly as ugly and stupid as stupid can be.

Posted by: Ari on March 5, 2004 11:31 AM


"A vote for Kerry is a vote for the enemy. It's that simple."

Well, it's nice to see that Rep. Cole has joined the discussion.

A bad jobs report shows why we need to reelect Bush, right. Oh wait, reverse that.

Posted by: Dimmy Karras on March 5, 2004 11:33 AM


The TNR article referred to by TomJ can be found here:

I don't think any serious economist blames Bush for the recession. The latest official start date I have seen for the recession was about April of 2001, although I personally think the tech companies hit the wall the previous year.

Bush's first series of tax cuts, which everyone likes to blame for our economic troubles, didn't get signed off until June of 2001. So cause and effect is a little difficult to establish. And 9/11 didn't exactly do the economy worlds of good either.

Now, reasonable people can argue about the tax cuts insofar as they may or may not have gotten us out of the recession faster, but not as a primary cause.

Posted by: tbrosz on March 5, 2004 11:37 AM


no, no ricky...according to your website a vote for Kerry is a vote for Zalamit the evil. Is Zalamit also on the OPEC cartel? Is there some sort of Cabinet of Zion that will be implicated in your posts as well, soon? Will you start quoting the Passion?

I loooove right wing nutjobs. They are so...entertaining. Unless they have guns.

Pouncer - have you ever been to Saudi Arabia? It truly is mostly a nation of extreme extremists. Many (not all) live in the same mental state as our friend Ricky, fomented by the officials there and supported with our tax dollars. There is a huge difference between Iran and Saudi Arabia...language, religious type (shi'a vs. wahhabi fundamentalists), ethnic groups. It's like comparing the US to say...Moldova?

Posted by: Marge Simpson on March 5, 2004 11:40 AM


tbrosz forgets that Bush began to talk down the economy before he stole the election. And that talk had an effect - go back and look at the market chart for 2000 - the DJIA really began to tank after Bush's "warning" that we were headed for a recession. Rove obviously felt that he had to get the recession out of the way before 2004 - he did that, but he also thought that the tax cuts wouldn't hamper job growth coming out of it. Unfortunately for us all, they did exactly the opposite - trickle down didn't work for the '80's, and it isn't working now.

The chickens are coming home to roost.

Posted by: fatbear on March 5, 2004 11:44 AM


Ricky, when your IQ reaches 60, sell.

The entire Bush family has been the willing lackeys of the Middle Eastern oil industry for decades now. Their partnerships run deeper than you can possibly imagine. Yet you somehow have this idea that voting for Bush somehow strikes a blow against said industry. Yeah, and when I'm done doing that, I'll vote for Bill Gates for governor of Washington, because I think the computer industry exercises entirely too much control over our economy.

Jesus Christ, man. Voting for Bush to stick it to OPEC? Do you even listen to the words before they come out of your mouth?

Posted by: Doug Gillett on March 5, 2004 11:46 AM


OPEC are not like all powerful OIL GODS who can precisely control the price of OIL. They want to be but they aren't. Why aren't they? Well because countries like Russia and Norway and Canada and other NON- OPEC countires produce a lot of OIL. More than OPEC in fact. Also - a lot of OPEC countries CHEAT ON THEIR QUOTA - that means even tho some Saudi in a suit says OPEC will only pump 300 million Barrels. The guy from NIGERIA and VENEZUELA and ALGERIA is PUMPING EXTRA OIL when the head honcho in SAUDI ARABIA isn't looking.

So OPEC wants to control OIL prices but, they can't.

Do they want BUSH GONE? Maybe Maybe not. Show me the proof. I am sure a lot of Arabs want to kill him for invading Iraq. BUt the people are not the leaders over there. The OPEC guys are the leaders, the elite.

I mean the BUSH Family DOES BUSINESS WITH THE OSAMA FAMILY - did you know that? You want a conspiracy that is a pretty good one.

A vote for BUSH is a vote for FAILURE
KERRY IN 2004.

Posted by: Scott McArthur on March 5, 2004 11:53 AM


It ain't just OPEC Sonny. The rest of the world. The ENTIRE planet, wants to see George Bush out of office. Not just your boogie men. There are lots of ways they can hurt us. They will use them all.

Posted by: SW on March 5, 2004 11:53 AM


Please do not feed the troll.

Posted by: Ari on March 5, 2004 12:11 PM


so the employment figures were all government jobs, not production jobs, and I suppose various relatives of politicians were mostly hired.

Posted by: big al on March 5, 2004 12:38 PM


"The truth is that massive entitlements and wealth redistribution are not a sustainable policy, and there's no getting around that." "wealth redstribution", might you be talking about something like the 91% marginal tax rates we had when that screaming socialist, Dwight Eisenhower, was president?

(tbrosz didn't exactly say this, but) I confess to getting REALLY PISSED when someone keeps telling me that reasonable progressiveness in tax rates, is the last step on the slippery slope to Leninism.

We had highly progressive tax rates from WWII until twenty years ago, and during that period the US economy (the REAL one--you know, the one that actually created JOBS?) grew at VERY healthy rates.

Posted by: Mikey_Gee on March 5, 2004 12:40 PM


Might of OPEC: the discipline of OPEC allegedly improved, and there are two contributing factors: Venezuela and Iraq. Venezuela: this country was one of the cheaters, and Chavez ended that, and used this as an example to convince other members not to cheat (or to cheat less). Clearly, OPEC members earn more money this way. Iraq: there was a plausible scenario that we will use Iraq to break the OPEC. Well, this sentence is in the past tense for a reason.

My impression was also that Russian oil tycoons were ready to enter into partnership with western oil companies to boost their production, and that would work against OPEC. This could rather risky for Russia, as this country depends on taxing oil export and high prices make this much, much easier than high production. Putin cut his tycoons down to size and now they follow his "advise". No more talk about partnerships with Americans, and, picture this: Russian oil companies volunteered to pay more taxes!

Posted by: piotr on March 5, 2004 01:00 PM


Hopefully, today's numbers will be the last time we hear of free trade.

The proof is in the results of the experiment, disaster for America. We stand on the edge--we could have gangs of 55 year white males in the streets by July


Now, what to do. PROTECTIONISM. That's the only redeeming value of this site and the Federal Reserve site--the excellent papers that the cause of the Great Depression wasn't high tariffs but monetary policy.

The only thing that can keep us from Depression is the fed printing money faster and faster, until we blow out all public and private debt with cheap dollars. No holding back now; inflation is the only way to transfer wealth to the middle class.

Posted by: John on March 5, 2004 01:10 PM


Ricky I looked at your Jenna site.If you think people are following you,you're right!They are secret service agents.Good luck with the therapy!

Posted by: rlkirtley on March 5, 2004 01:26 PM


The point is not that Bush caused the recession. But is it the case that Bush failed to respond effectively to that condition, thereby prolonging he slump and keeping the labor market soft? Tax cuts insufficiently designed as stimulus, etc. Is this the argument that Bush is the cause of the job losses to date?

Posted by: TomJ on March 5, 2004 01:57 PM


I initially misread the maroon line as "jokes and growth"

Posted by: bakho on March 5, 2004 02:25 PM


I notice the red and green lines are almost parallel, that is, the Bush admin didn't adjust its
prediction for the rate of future job growth given the unpleasant "surprise" between "jobs jobs jobs" and the "troika" "projection".

This is another explanation of how K Rover or whoever really made it came up with the "troika" "projection" complementing or competing with Brad's idea that they worked back from more jobs on average in 2004 than when Bush elected. It explains why they didn't cheat less and give an employment in December "projection".

Unthread there is a question as to how they can be 1.07 million short when the report was published and 1.07 million short now. The reason is that, given the data collection lag, we are just now learning what employment was then. Numbers released now refer to the time when the report was published.

Posted by: Robert Waldmann on March 5, 2004 04:23 PM



When you talk to someone about the 91 percent tax rates, ask them about the loopholes back then.

Your idea of "reasonably progressive" may be different from mine. I paid over $30,000 in combined income and payroll tax last year (I'm self-employed.) How much did you dump into the kitty?

Posted by: tbrosz on March 5, 2004 04:30 PM


Agreed that the tax rates of the 1950s had enough deductions and exemptions that almost no one paid those full amounts. But there is still room to raise income taxes on the highest bracket and still fall on the right side of the Laffer curve. Currently our tax system is actually somewhat regressive if you factor in all taxes (as you should) rather than simply looking at only Federal income tax and ignoring payroll tax plus all state and local taxes.

Posted by: Firebug on March 5, 2004 05:03 PM


Tbrosz: First of all, we ought to dump the payroll tax altogether and adjust the income tax for revenue neutrality. Follow up with a slow (20 to 30 years) phase in of means testing on Social Security and Medicare. Payroll taxes do indeed hit the self-employed hardest and this is one reason why I want to get rid of them.

But it's impossible to tell whether a $30k/year tax burden is unreasonably high without knowing what your gross income was.

Posted by: Firebug on March 5, 2004 05:06 PM


The forcasts
Like fishing rods
At the end of
Some wreckage

The economists trying to
Keep up with the architects
and the corporate assertions of
The skyscrapers

Posted by: calmo on March 5, 2004 07:05 PM


I got an idea!
we should cut taxes on the wealthiest segment of society, they'll spend money!
whoops. Okay, we'll cut social security that people have paid into their whole lives. that's going to cover our tax cut. wait...

It's all because of 9/11! Look at the monkey!

Posted by: g h on March 5, 2004 10:39 PM


Mimikatz: public works programs

You answered where the money went, but the reason that the Fed cannot just pump with impunity is that this debases the currency (inflation), something which lenders (or purchasers of Treasury notes) don't like.

If you lend somebody money against an IOU, and then see the guy starting to write IOUs to everybody in excess of his economic capacity, it will dilute your property interest in the IOU, assuming that creditors will collect roughly in equal proportions. The next time he hits you up for money, you will discount his IOU accordingly (i.e. ask a higher interest rate).

Public works may not be a bad idea though, as it is undoubtedly a productive activity (as opposed to financial speculation or war), will improve the value of the land against that all those foreign Treasury debt purchasers may want to redeem their notes at some point, and meanwhile the US population can benefit from better infrastructure.

Posted by: cm on March 6, 2004 01:43 AM


"High Politicians," eh, Brad?

I guess to Make The Punishment Fit The Crime we ought to unemploy them, right?

Posted by: David Lloyd-Jones on March 6, 2004 05:36 AM


"Are Democrats aiding our enemies?"

Remind me to email you on this great offer I have on very stylish tinfoil hats.

Posted by: Stirling Newberry on March 6, 2004 01:12 PM


"You answered where the money went, but the reason that the Fed cannot just pump with impunity is that this debases the currency (inflation), something which lenders (or purchasers of Treasury notes) don't like."^XBP&t=2y

It can also lead to devalution. Which it has.

Posted by: Stirling Newberry on March 6, 2004 01:15 PM


"What the hell did we steal their oil for, if I can't fill up my SUV for under 20 bucks?"

If you liked Iraq, you will love Venezuela.

Posted by: Stirling Newberry on March 6, 2004 01:16 PM


What the hell is that?

If you look at^XBP
you will see a 100X jump on 30-Dec-03. That looks like some unit was changed by 100X. Other indices (like ^XEU) are affected as well.

Can you provide more insight?

Posted by: cm on March 6, 2004 01:34 PM


"I said OPEC is inflating the oil price to get Bush out of the White House."

The price of oil measured in Euros is just about flat. They are simply demanding more Bush Bucks for the barrel. Something about supply and demand... maybe you should look it up, economics makes fascinating reading.

Posted by: Stirling Newberry on March 6, 2004 02:11 PM


The depressing thing to me is how short the news cycle is on this bad jobs news. The admin releases the figure on Friday morning, a few shots are taken at Bush & Company, and then it's off to see what Martha is wearing for the Jury Verdict. By Monday morning it's all forgotten, and the few remaining reports are that the job news was somewhat disappointing and somewhat off of forecast. Some indictment.

Posted by: Lester Mann on March 8, 2004 03:22 PM


You know Paul Krugman bit you off?

I'd consider it an honor. Well done!

Posted by: Josh Koenig on March 9, 2004 12:21 AM


Thanks for pointing this out:
"The price of oil measured in Euros is just about flat."
There are some here who think that the crude pricing is an evil plot. The current price at the gas pump has not really started to reflect what $36/B means.
But it will. Nor how many vultures are cueing up at the futures, betting on protracted difficulties with supply.
And the long range view? (I mean this July)
Seems hard to believe that George would let us pay $4/gallon when he could give us another tax break. Supply? What are reserves for if not to keep our economy running?

Posted by: calmo on March 9, 2004 02:51 AM


What's remarkable is not so much the forecast, but the way in which the Administration has handled it.

More comments on this and the Krugman column here:

Posted by: Squirrel on March 9, 2004 10:25 PM


Here is an interesting take on increased productivity in America and where the numbers come from.

"Lies, damned lies, and statistics

"Unfortunately, the “productivity miracle” is also partly a statistical quirk. A significant portion of what we “import” from foreign countries actually represents intermediate goods produced by foreign subsidiaries of U.S. companies, or companies formed by direct U.S. investment into those countries. Think about this for a second. We import the same intermediate goods we would have manufactured at home, but at cheaper prices (meaning that the deduction to GDP on account of imports will generally be proportionately smaller than the corresponding loss in U.S. employment). Yet when we turn around to calculate productivity, we don't count the foreign jobs used to produce that output. As Fabrizio Galimberti has noted in the Economist, foreign outsourcing has the effect of artificially raising productivity figures because subtracting imports from GDP does not adequately correct for their impact on final output, yet foreign labor is not counted, so measured output per worker increases.

"The net effect of all this is that the U.S. “productivity miracle” is almost entirely dependent on growth in U.S. imports and foreign labor outsourcing."

Posted by: wjd123 on March 13, 2004 07:20 AM


Nature is not anthropomorphic.

Posted by: Oldfield Krista on March 17, 2004 09:14 PM


how can i get jobs from net pls give details

Posted by: sanjay on March 28, 2004 09:38 PM


A good friend can tell you what is the matter with you in a minute. He may not seem such a good friend after telling.

Posted by: Jed Reinitz on May 2, 2004 02:17 PM


Don't give up, you are close.

Posted by: Schiffmann Rob on May 3, 2004 01:36 AM


You cannot learn without already knowing.

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