June 10, 2004

Why Oh Why Can't We Have a Better Press Corps? ("Objective Economic Indicators" Edition)

I'm going to go bang my head against the wall again.

The Washington Post's Jonathan Weisman writes:

Jonathan Weisman Strikes Again: [George W.] Bush is not the first president to suffer from a disconnect between objective economic indicators and voter perceptions on the economy. The economy began growing steadily in March 1991, when President George H.W. Bush registered a 49 percent approval rating on his handling of the economy. But by July of 1992, those approval ratings had slid to an abysmal 25 percent, presaging his electoral defeat three months later....

Leave to one side the assumption that "objective economic indicators" are now "good"--the productivity numbers are indeed truly wonderful, but the employment and real wage situation is still lousy, albeit better than it was half a year ago.

Focus, instead, on the assertion that during the period between March 1991 and July 1992 there was a "disconnect between objective economic indicators"--good--"and voter perceptions"--bad. But during that period the unemployment rate rose from 6.8% to 7.9%: that's a lot of powerful bad news about "objective economic conditions" in the labor market. You can say a bunch of things about the slide in George H.W. Bush's approval ratings between early 1991 and mid 1992, but saying that there was a "disconnect between objective economic indicators and voter perceptions" is not one of them.

Shouldn't the Washington Post require that its economics writers know--or at least be able to learn--that the unemployment rate rose substantially between the spring of 1991 and the summer of 1992? It's not a very hard task. It should be a minimal requirement for employment. And there are hundreds if not thousands of bright and hard-working people in D.C. who would meet it.

Posted by DeLong at June 10, 2004 12:39 PM | TrackBack | | Other weblogs commenting on this post
Comments

Weisman is the same guy who admitted on a poynter forum that he allowed Bush administration officials to review and *change after the fact* quotes obtained from officials for a story conditional to publication. IOW: he let one White House official change a quote uttered by another White House official and then *printed that as news*. Wouldn't want to get banned from the White House for publishing factual content, now would he?

I hate to link to my own story about this, but it's the only one out there easy enough to google:

http://www.kuro5hin.org/story/2003/3/14/13398/1467

Posted by: J. Maynard Gelinas on June 10, 2004 12:52 PM

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Looking back at the last 4 recoveries (1980-81 recovery from Carter recession, 1983-84 recovery from the Reagan recession, the 1992-94 recovery mentioned here, and the current one) the employment growth picture is telling:

The current recovery did not start producing job growth until 2 full years after the 1981 tax cut and over the past 9 months, job growth has averaged less than 160,000 per month.

The recovery from the Bush41 recession was so weak that average job growth in 1992 was a mere 96,000 per month, but average job growth was around 275,000 jobs per month for 1993 and 1994.

The Reagan recovery saw average job growth equal to 305,000 jobs per month for 1983 and 1984 but then unemployment was very high.

While job growth for the Carter recovery was somewhere between the Bush41 1992 path and the Bush43 path over the past 3 years, most Americans might say - what Carter recovery? Especially the ones that read the NRO (as in Kudlow's piece today).

Posted by: Harold McClure on June 10, 2004 01:31 PM

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Weisman also can't keep his story straight on 1991-92. As Brad points out, here it's "things got better but voters didn't realise it." But it took me about 5 seconds with Google to find his name on the article containing this sentence:

>>
...some Republicans blame Greenspan in part for President George H.W. Bush's defeat in 1992, saying the Fed moved too slowly to cut interest rates during the previous recession.
>>
http://www.washingtonpost.com/ac2/wp-dyn/A17138-2003Jul19

So now it's disconnected voters. Before it was Greenspan. I think we all need padded walls.

Posted by: P O'Neill on June 10, 2004 01:42 PM

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What about the allegations that the DOL is juicing the job growth number with it's Net Birth/Death Adjustment?

Posted by: Matthew Saroff on June 10, 2004 01:42 PM

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Matthew,

Unless we want to go probing for a personal agenda, I think we can take Robert Reich at his word when he says that the birth/death calculation has been steadily improved, and while not perfect, is not bad.

As regards the piece in question, I understand why economics and politics go together, but I don't understand why the Post thinks that one individual (Weisman, in this case) necessarily has any expertise in one area simply because he is thought to have expertise in another. Why does the Post think that it is necessary to make strong (and debatable) assertions about economics in the same piece in which strong assertions about politics are being made? If voters don't like the state of the economy, shouldn't we at least suspect there something wrong with the economy? Don't economists assume that when we buy gasoline, newspapers, shoes and stocks, the combined views of the public on the prices they are willing to pay are more or less correct? Given that, why would we be benighted about the overall state of the economy - more benighted as a group than Weisman, with his necessarily narrower knowledge of conditions in the economy?

Posted by: kharris on June 10, 2004 02:16 PM

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And why or why can't we have better Brad?

http://biz.yahoo.com/rb/040610/economy_outsourcing_2.html: When seasonal and vacation-related mass layoffs are excluded, the proportion of workers who lost their jobs due to overseas outsourcing rises to about 2.5 out of 100. ... Fifty-one percent of mass layoffs caused by outsourcing were permanent closures of the work site, compared to just 17 percent of total layoffs.

Still claiming outsourcing is a good thing?

Posted by: bubba on June 10, 2004 02:42 PM

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Why don't you and Weisman just have a duel and get it over with? I'll be your second if needed.

Posted by: asdf on June 10, 2004 02:58 PM

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Not to play the fool or nothin', but all Weisman (or his editor) had to do was go to the BLS Web site and click on the cute little green dinosaur icon.

Charlatans. Every last one of them.

Also, what is an "objective economic indicator"? It seems to me politicians tend to cherry-pick their "objective indicators" when they talk about the economy. "Leading indicators" or "Major economic indicators" might be more meaningful, since its at least accepted that some statistics are more commonly quoted than others. But "objective" seems to be stretching it.

Posted by: Jim D on June 10, 2004 03:11 PM

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On the other hand over the same period productivity and wages rose ?

So if, l;ike Brad you consider these to be objective economic indicators then the statement

"disconnect between objective economic indicators"

is true.

Posted by: Giles on June 10, 2004 04:07 PM

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F**k you, Brad, you f**king f**k. You have no f**king idea how f**king hard it is to re-write these f**king White House press releases. Who the f**k are you to be telling how to do my f**king job, you fat f**k?

Posted by: Jordan Weisman on June 10, 2004 05:01 PM

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You just have to see this picture itís sort of gross but really really funny

http://superrandomrandomness.blogspot.com

Support Howard Stern

Posted by: thedeuce75 on June 10, 2004 05:08 PM

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Trust Bush Economic Data?

We now know that BushCo tried to manipulate the data in the annual report on world terrorist events to make it appear that 2003 was better than 2002 when the opposite was true, so why should we trust the monthly and quarterly economic data from this Administration? Do we know that BushCo has not gotten its lying cronies into positions to alter or withhold adverse economic data at the Bureau of Labor Statistics or whereever key data are generated?

Posted by: Arthur Benson on June 10, 2004 07:02 PM

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I have to agree. This is the most clueless Weisman column yet. Who does he talk to to come up with this garbage? Grover?

The jobless claims just went up again. The silver spoon crowd just does not get it. We have been in economic recovery since 2001. The economy is "not bad". However, the unemployment numbers are bad. 17% of teenagers looking for work cannot find jobs. This is something parents and teens notice. Got a job, and you are out of the way, got your own pocket money and stay out of too much trouble because you have to get up in the morning. No job and the conflicts escalate. Stay up late and out of the house to avoid the constant criticism, no money to do stuff. Mischief is cheap. Voters don't look at the economic numbers and then vote. Voters look for a job and get pissed if we don't have one. Pissed voters vote the bums out.

Posted by: bakho on June 10, 2004 07:20 PM

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You expect a Washington Post reporter to LOOK STUFF UP?

Jesus Jumping Christ! What will you ask for next?

I'm Michael Gelding, and that's the Ombuds-eunuch's Report.

Posted by: Michael Gelding on June 10, 2004 09:34 PM

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It is not so bad. Much better examples abound. I love this one: http://news.yahoo.com/news?tmpl=story&cid=615&u=/nm/20040611/pl_nm/campaign_putin_dc_1&printer=1
"Putin Takes Bush's Side Against Democrats on Iraq": The Kremlin leader, ... suggested that the Democrats were two-faced in criticizing Bush on Iraq since it had been the Clinton administration that authorized the 1999 bombing of Yugoslavia.

Bush's side? The guy (much-criticized in US press) says US is evil. That gets translated as Bush's side aginst Democrats. Weisman ain't got a patch on that.

Posted by: a on June 10, 2004 11:03 PM

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I had a long discussion with the BLS on the
death/birth adjustment this week. Moreover, I got the back data on the historic backtesting of the birth/death adjustment back to 1989.

When I look at the historic data what I see is the historic data shows that the adjustment
accounts for from 50% to 90% of the job creation numbers reported in the payroll data each year. So this years large adjustment is not out of line with history.

The conclusion I drew from the adjustment is to question the consensus view that the payroll data is a better economic indicator than the household data. The survey data has always lead the payroll data and now we find out that the payroll data actually has a more serious problem than thought capturing job creation in small and startup firms than we thought.

The question is what would you rather have? One, a statistical survey based on a small, but more than adequate sample. Or two, a report where over half the job creation data stems from an econometric model.

Given the limited resources we devote to statistical collections you have to live with
one of these less than desirable choices.

Posted by: spencer on June 11, 2004 05:14 AM

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Reagan job creation.

Job creation under Reagan was beter than under any other Rebublican president. But it was worse than under every Democratic president.

This is in line with all the other indicators that show the economy was good under Reagan, but it was nothing unusual in comparison to other periods.

Posted by: spencer on June 11, 2004 05:17 AM

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A Guide to Everyday Economic Statistics
by Gary E. Clayton, Martin Gerhard Giesbrecht

Should be required reading for every reporter covering the Washington beat. Hell, it'd be nice if they could even learn to use google. First link.

http://www.google.com/search?sourceid=navclient&ie=UTF-8&oe=UTF-8&q=unemployment+united+states

Posted by: Iain Babeu on June 11, 2004 05:44 AM

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The WaPo reporter is correct according to Ray Fair's model.

Posted by: Patrick R. Sullivan on June 11, 2004 05:54 AM

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Ray Fair makes the same mistake as Weisman. He uses economic data instead of employment data. This is why his model was so far off in 1992. Bush did not win in a landslide. Yes, a recovery had started but jobs were scarce.

Yes, the recession ended over 2 years ago. Today, the job market still sucks. Jobs are not getting easier to find, they just quit bleeding as much. That is #1 reason why this Bush is in so much trouble.

Posted by: bakho on June 11, 2004 06:45 AM

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http://pep.typepad.com/public_enquiry_project/2004/06/prof_delong_ill_1.html

Posted by: Adrian Spidle on June 11, 2004 07:04 AM

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What I remember very clearly about that period in my hometown, Hartford, was the palpable sense of fear in my neighborhood over job losses. It was ugly, perhaps something like that experienced by our parents in the Depression, and I never want to experience anything like it again.

Posted by: Bob H on June 11, 2004 07:38 AM

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The real knock on the elder Bush was that he didn't seem to care that much, that he seemed to voters to be emotionally removed from the issues they cared about. Thus Clinton scored with "it's the economy, stupid" and "I feel your pain", which, though mocked at times, did accurately reflect campaign strategy. This mattered more than any economist's reading of the numbers, however astute.

This logic may be repeated this fall, when W fails to get much credit from an improving economic (and even jobs) outlook because he hasn't demonstrated much of a personal investment in economic policy issues, preferring instead to be "the war President" (and at a time when people are getting really tired of Iraq).

Posted by: Jim Harris on June 11, 2004 07:53 AM

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Jim, as Brad writes, unemployment was almost 8 % by July before the election. Voters mostly decide in August/Sept, late deciders almost never go to the incumbant. Even if employment was starting to improve, it was still bad enough to undermine his re-election. Unemployment is still in the mid-5% (7% if you believe Dean Baker about the numbers that gave up looking). This is not a good number. Who can tell if there is much improvement? Large numbers of people looking for jobs cannot find them. It is even worse in important midwestern states. Voters didn't exactly flock to Clinton. They left Bush for Clinton or Perot or didn't bother to vote.

Posted by: bakho on June 11, 2004 09:35 AM

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Since the end of the last recession, real wages are up by more than 2 percent. At this point after the recession of the early 1990's, real wages were down by more than 2 percent. Of the 1.4 million new jobs created since last August, more than two-thirds are in industries that pay higher than the national average hourly wage. So much for your out-dated McJobs argument.

Productivity growth is amazing. Inflation and interest rates are near record lows. Business activity is at a record high. Manufacturing employment has now grown for four consecutive months after nearly four years of declines. Remember that the recent peak of manufacturing employment was in the late 1990's. Homeownership is at a record high. Business investment has increased 9 percent over the last year after hitting a wall in 2000 and declining for nearly 2 years.

Brad, let me give you a tip or two. You can cry and moan all you want about lost jobs and missed forecasts. Nobody cares about forecasts, and nobody cares to hear how many jobs have been lost over the past few years. The American public is quite aware that our economy suffered a number of a shocks over the past few years. The American public knows that more than 900,000 jobs were lost in the 90 days after September 11. The American public knows that we had a recession, a terrorist attack, war, and corporate scandals that were years in the making.

What we all want to know right now is whether or not things are getting better, and by all measures they most certainly are. More than 1 million jobs have been created this year alone, and the majority of them are in industries that pay higher than the national average wage. GDP growth over the past year has been the fastest in two decades. If the pace of job growth we've seen thus far continues, we'll see 2.8 million new jobs by the end of the year. The homeownership rate is at a record high.

Things are getting better, and you know it. But it's quite obvious to the independent observer that you're searching for something, anything, about which to complain. Sadly, though, the data is not on your side. Increasing employment, wages, and standard of living don't bode well for your buddy John Kerry, so you're transparently trying to run out the clock hoping against hope that people begin to recognize the strong economy. If you were still an economist, you might be more welling to accept the encouraging data. However, you have of late followed your friend Mr. Krugman into the land of armchair punditry and second-guessing. Alas, not all of us can have Larry Summers get us koosh jobs and journal publications, but at least we can enjoy good news when we see it.


Posted by: Larry Jones on June 11, 2004 02:39 PM

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We've just had the best three months of employment growth in the past 4 years but the unemployment rate has barely budged.

http://research.stlouisfed.org/fred2/series/UNRATE

Why is that ? It seems to indicate that the
real breadth of unemployment is undercounted.

Posted by: bhaim on June 14, 2004 11:49 AM

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