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Stop the Obamapologists Before They Kill the Data

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Saturday, 05 May 2012 07:43

Peter Coy is ordinarily a pretty good reporter, but he really misses the boat with this chart, with the comment, "this jobs recovery is weak, all right, but right in line with the past two recoveries."

btp-2012-05-05

When you evaluate the strength of a recovery, you also have to consider the depth of the downturn that preceded it. In the 1990-91 recession we lost 1.5 million jobs, in the 2001 recession we lost 1.6 million jobs. In the 2007-2009 recession we lost 7.5 million jobs.

The job loss in the downturn provides the room for job growth in the upturn. That is why the economy was able to generate 10.4 million jobs from June of 1975 to June of 1978 and 9.8 million jobs from December of 1982 to December of 1985. (Remember the labor force was less than 2/3rds the size of the current labor force.) In both cases, severe recessions left enormous room for job growth in the expansion. This is also true with the current downturn.

Several Obama supporters have picked up Coy's graph and tried to make a political statement with it. They have. They don't believe that Obama can make a serious economic case to support his re-election.

 

[Addendum: Apparently, this is not the first time they have tried this trick, as my colleague John Schmitt informs me.]

Comments (15)Add Comment
...
written by JSeydl, May 05, 2012 9:16
True. It is a tragedy that the jobs recovery has not been stronger, given the depth of the downturn. But I think the political statement is to combat the Rogoff and Reinhart slogan that recoveries from financial crises tend to be sluggish. In other words, it's a way of basically saying, "Look, Obama has governed in the wake of the worst financial crisis since the Great Depression, and he has still had a stronger private sector jobs recovery than did Bush." It's obviously not right, since millions of workers are needlessly unemployed right now. But it might stick politically.
Chief Doofuss In Charge of Errors
written by dilbert dogbert, May 05, 2012 10:17
I like Calculated Risk's series of graphs that compare the current to past recessions. They tell the story accurately.
Today's CR blog is the place to go to view them.
The bad news is they are in line
written by Bill H, May 05, 2012 10:28
The 2001 recession experianced waht was called a jobless recovery; i remember it well. So if you look at the current point as jobs restored as a percent of those lost then look at what you have:

1990-1991 recession, 160% recovery
2001 recession, 25% recovery
2007-2009 recession, 21% recovery

So Bush presided over a jobless recovery and now Obama is presiding over a jobless recovery.
Alternative
written by James, May 05, 2012 10:37
No doubt that the job news could have or should have been much better.

Let's just accept that: If current Administration is pathetic in handling the economy and this certainly will be exploited, used, and falsely multiplied its effect by Bishop Romney's camp and he will become the next president.

Then what? Better job prospects for average Americans? Better future for the 99% of us? Better health care or social security?

In politics, you don't have to tell the full extent of the bad data, your opponent will surely do them for you.
policy errors
written by Peter K., May 05, 2012 10:39
JSeydl,

One of my favorite Bernanke moments was when he was asked about Rogoff/Reinhart and he agreed that yes recoveries are usually sluggish after financial crises because policy makers don't respond forcefully enough. His analysis is good, his actions not so much.
Perspective, Like
written by James, May 05, 2012 10:46
With a supporting Congress, yet Bush created that many jobs.

Has the House seen any job creation bill that they NOT killed?

What did the Senate Minority Leader said about his mission? Help Administration to create more jobs?

Putting the entire if not most of the blame on one office without the consideration of other relavant opposing forces is as you said.....
...
written by JSeydl, May 05, 2012 12:50
One of my favorite Bernanke moments was when he was asked about Rogoff/Reinhart and he agreed that yes recoveries are usually sluggish after financial crises because policy makers don't respond forcefully enough. His analysis is good, his actions not so much.


Exactly. The 1990s Bernanke would be doing things very differently today.

What I've always found confusing, however, is the fact that conservatives are the ones pushing the Rogoff/Reinhart research, yet they blame everything on the Obama Administration. Of course they like the Rogoff/Reinhart research because it fits nicely with the lower potential GDP argument, which fits nicely with the slashing entitlements argument. But isn't it, then, a huge contradiction when they turn around and say that the economy wouldn't sluggish without Obama's job-killing policies?
"the depth of the downturn"
written by Ellen1910, May 05, 2012 1:08
From the Wall Street Journal --

Conservative economist:: The jobs recovery is normal -- no need for expansionary fiscal or monetary policy.

Conservative politician: Jobs loss is still huge after three years of the "most liberal president in United States history" -- vote for Romney.
...
written by Dan Kervick, May 06, 2012 2:43
Let's be frank. Obama really doesn't have much to run on. Everything good that he did for the economy happened in the first couple of weeks of his presidency when he did his one-night stand with Keynesianism. It has been mostly downhill since then - a depressing 3 1/2 years of throwing the unemployed under the bus and looking for a centrist grand debt bargain with Republicans. 8.2% unemployment. Holy cow.
The Graph You're Looking For....
written by Jacob AG, May 06, 2012 5:52
is here: http://1.bp.blogspot.com/-GMf_...il2012.jpg

HT to Calculated Risk
5 more years!
written by David, May 07, 2012 12:36
That's the approximate amount of time, according to Jacob's trendline, until full recovery, presuming PotUS (Obamney) stays the course. Pitchforks, please.
Economics Editor, Bloomberg Businessweek
written by Peter Coy, May 07, 2012 11:08
Dean et al.,
I stand by my chart. You argue that the deeper the downturn, the faster the rebound should be. That seems to make sense, but it's not the pattern we've seen since WWII. Jim Paulsen of Wells Capital has created a scatterplot showing growth in the first 11 quarters of recoveries vs. the depth of recessions. Amazingly the regression line tilts slightly upward, meaning the shallower recessions have been followed by faster growth. I should have mentioned this in my post but I didn't want to complicate things. I link to the chart in my Twitter feed, @petercoy. http://twitpic.com/9igist
8.75 million jobs lost
written by Ben Leet, May 07, 2012 12:52
Dept of Labor, Monthly Labor Review, states 8.75 million jobs lost. See http://www.bls.gov/opub/mlr/2011/03/art2exc.htm
In fact, 15 million lay-offs occurred and 7 million were re-employed. This article uses the figure 7.5 million. More important, private sector employment was slightly greater 12 years earlier, 110 million private sector workers in 2000, and same again in 2012. Clearly, Peter Coy misses the mark.
job loss is only a small part of the problem
written by mel in oregon, May 07, 2012 4:25
okay you have obama & his apologists saying how much he's done, when he really hasn't done anything. then you have romney saying gw was far too conservative, & he'll get tough with iran, russia, china & everyone else. course he or his 5 sons refuse to do any military duty themselves, but it's alright for your son or daughter to die for nothing except to help the corporations making money off war. so why does mel keep saying america is on a heavy decline? well it isn't happening overnight, we still have the biggest military by far plus the biggest economy. but look at it from the viewpoint of a say a 20 year old in college. what will you have to look forward to in the next 20 years? well you'll start young adulthood in debt, probably $20,000 on up. you'll probably live with your parents until your 30. your parents face an uncertain future because of loss of home equity, lost pensions & lost 401ks. if social security & medicare are chopped, you may have to take care of them when you reach middle age. what about the environment? well the polar ice caps are melting which is a fact regardless of what your political or religious beliefs are. so we'll have less water in the future for drinking, farming & sanitation. as the population increases, this obviously will lead to more pandemics. domestically we are doing almost nothing except opening the heartland up to fracting & contamination of our resources. china built the best high speed rail in the world in 6 years. the united states, er, we don't have one. so don't look for us to rebuild our infrastructure, improve our schools, or do anything that will improve the lives of we the people. if i were the hypothetical 20 year old i mentioned, check out australia where the minimum wage is $16 an hour. because regardless of whether hopeless obama or offshored wealth romney wins, things are going to get much worse for america, particularly for young americans.
...
written by JSeydl, May 07, 2012 5:08
Mel, that was awesome. You just busted up the joint. Beautifully written.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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