The Unemployment Rate

New broke in the middle of Friday morning that the unemployment rate had dropped from 8.1% to 7.8%, he lowest rate since President Obama took office.  Hooray!  Right?  It probably depends on which candidate you’re supporting for President.  Democrats are trumpeting this as proof that the President’s policies are working:  “We’ve made it back through the mess to where we started” has been the general refrain (James Taranto has one of my favorite tweets about this reaction).

I was surprised by the number.  I had heard through Twitter that economists expected the rate to remain at 8.1% or jump to 8.2% (less likely) and were not expecting a drop in the number.  So when it happened there was some immediate skepticism from the right about the legitimacy of the numbers.  Jack Welch, former CEO of General Electric, was one of the first to publicly express some doubts about the numbers.  He was promptly blasted by the MSM and praised by hard core government skeptic conservatives.  In order to give Jack Welch an opportunity to defend himself, please check out his interview with Chris Matthews, where he explains his opinion fully.

What then do we make of these numbers?  First, let us note that conservatives are skeptical of the government.  There are some who believe the government is evil, and liberals are quick to claim they represent the majority of those on the right in an effort to discredit them and the right’s attempts to contribute to media coverage.  Second, let us note that as President, President Obama has some power to influence things.  Jay Cost with The Weekly Standard went through a long list of past presidential election manipulation that is worth reading for the history lesson.  And the reminder that Presidents (and Congressmen) will do anything to preserve their jobs.  I point this out because we must remember the President, like any CEO, Congressman, salesperson or assembly line worker, is interested in keeping his job.  He may be more interested because his directly affects his public legacy unlike any other (think very quickly about your opinions of Jimmy Carter and George H. W. Bush, the last two presidents to lose their reelection campaign.  The public psyche assumes they were far lessor presidents that Reagan, Clinton, and George W. Bush because they failed to secure a second term).

Naturally, the Romney campaign has dived into the numbers and expressed skepticism in the validity of the numbers, stating simply “this is not what a real recovery looks like“.  The biggest surprise about the BLS report is the discrepancy between the two surveys they reference (and the reason the right is rolling their eyes at this).  Again, stated simply, The Household Survey showed a gain of 873,000 people employed in September – resulting in the surprise drop in the unemployment rate – while the Establishment Survey only showed a rise of 114,000 [people employed].” So one survey shows 114,000 new jobs added, and another showed 873,000 more people employed.  Throw in that this is the single largest drop in the unemployment rate in 29 years in a period of time when other economic indicators are showing stagnation across much of the economy, and you can queue the right’s head scratching and, honestly, I think it is completely legitimate.

The president will be trumpeting this for the next month, as he should, and Romney’s response is going to have to be strong.  He can state, simply and accurately, that the primary reason for this drop is workforce participation keeps dropping, and he is accurate.  How much of this is due to the retirement of elderly workers as the American workforce ages is up for debate (Federal Reserve Bank of Chicago says potentially as much as half).  Either way, Romney can argue the rate would be 8.5% is the same people were working now as in January of 2012, and that the rate would be around 10.7%.  It is a convincing counterargument if it is heeded, and only time will tell if it is.  The heat has been turned up.

Edit:  Just had this thought:  does this mean President Obama thinks he is vulnerable on the economy and unemployment rate?  I would argue yes.  Romney probably needs to keep the attacks up.

President Obama’s First State of the Union

President Obama’s first State of the Union (SOTU) was given at a crucial time in his presidency.  Since his election in November 2008 swept the Democrats into power in Congress for the first time since 1994 President Obama has had a rocky road.  His nominees, though undergoing an intense vetting process, yielded several who failed to pay taxes and whose backgrounds were far from politically beneficial to the President.  His stimulus package, passed with ease, has been decried as a worthless purveyor of pork which will do nothing but add to our deficit.  His much championed climate change bill was DOA in the Senate and while both the House of Representatives and the Senate have passed health care reform bills, many House and Senate Democrats are of the opinion that the victory of Scott Brown in Massachusetts is a public rejection of Obama’s health care agenda.

In short, President Obama has a lot to talk about.  None of his major policy items, beyond the stimulus, have made it to his desk in this first year in office.  With the largest first year approval rating drop in history for a President (Rasmussen has a drop for the low 80s to the mid to high 40s), Obama needs to get momentum back on his side.  This speech is crucial to do so, since he will capture most of America as his audience and be able to put forth his agenda.

What I intend to do is to analyze the President’s speech from a transcript pulled from the White House web site.  There are numerous themes the President hit on, so I will address them one by one.  So sit back and enjoy. Read more of this post

SOTU, Part 2

Part 2. Read more of this post

Health Care, Part 1

To my faithful reader, I offer my most sincere apologies.  It has been a very long and overwhelming seventh semester of college and I rejoice, having made it to the end, to have pulled off another good semester.  The highlight was my engagement to my beautiful fiancé and I couldn’t be more excited about marrying her this spring.  I have genuinely missed blogging.  It is a place my thoughts on politics and governance find refuge.

The downside of being away so long is I have so much that I wish to talk about.  I want to talk about Obama and Afghanistan, Obama and Iraq or Iran, health care and the debt, labor unions in general and I have a little rant on the economy.

But since it is the 24th of December and liberals across the country are rejoicing in our new Health Care Day I think that is the most pressing issue to discuss.  Please keep your arms and legs inside the vehicle at all times. Read more of this post

Optimistic Economic News

If you want to see a slightly cheerier opinion of the US economy at the current time, then you should read this.  Alan Binder is a former Vice Chairman of the Federal Reserve Board and currently teaches at Princeton and offers some fairly easy to understand optimism.  Basically Binder says the economy is in good shape for some 4Q 2009 and 1Q and possibly 2Q 2010 numbers.  Whether that sticks in 2010 before 4Q 2010 is a different story Binder admits, but there is some optimism.

Especially when it comes to the job market.  His analysis points out there is a very good chance that employers have payroll “pared to the bone” and will need to hire workers as prospects improve in 2010.  Since I will be graduating in May I am glad to hear it.

On another note (pessimism creeping in), Congress still seems intent on spending lots and lots of money.

Some Polling Data

Here are the highlights of a Rasmussen Reports survey released today.

  • 33% of the nation’s voters now Strongly Approve of the way that Barack Obama is performing his role as President. 33% Strongly Disapprove giving Obama a Presidential Approval Index rating of 0.
  • Seven percent (7%) rate the economy as good or excellent while 59% say it’s poor.
  • 55% believe business leaders will do more than government officials to get the economy moving again.
  • Overall, 55% of voters say they at least somewhat approve of the President’s performance so far. Forty-four percent (44%) disapprove.
  • 54% oppose the Cash for Clunkers plan.

The Obama numbers are not surprising at first glance, bringing to mind the 33-33-33 split of the electorate we talk about in class so often.  But then I recall the electorate was supposed to swing to the left, possibly a 37-40-23 split or so (Those numbers are not accurate in any way).  I guess it really hasn’t changed much for now.

Economically I wonder if the 7% are workers in the unemployment offices cause their business should be going up right now.  I am glad 55% of the populace believes that business will revive the economy and not the government.  Let us hope it stays that way.

Jobs Created and Saved

If you have heard President Obama speak since the his election day victory and the release of his stimulus plan you have heard about how his plan will create and save jobs.  Look up any economic statement he has made and you will find it there, including yesterday.

Let me provide a little blurb from the Wall Street Journal, a newspaper filled with economic types.

Of course, the inability to measure Mr. Obama’s jobs formula is part of its attraction. Never mind that no one — not the Labor Department, not the Treasury, not the Bureau of Labor Statistics — actually measures “jobs saved.” As the New York Times delicately reports, Mr. Obama’s jobs claims are “based on macroeconomic estimates, not an actual counting of jobs.” Nice work if you can get away with it.

You cannot measure that figure and there is no way to measure such a figure.  No one does it.  The President is making numbers up.  The question then becomes why and honestly, the only reason he would has to be to justify his initiatives.  If you have to lie to the public with fake numbers, not even misconstrued facts, what does that say about your policies?