New Fox News Analysis Piece: What Obama's Not Going to Tell You About Jobs

My new Fox News piece starts this way:

The major focus of President Obama’s State of the Union address tonight is expected to be on jobs. But as he pushes for more of the same solutions to get folks back to work maybe we should ask how well his policies have been working out after his first year in office. The White House recently announced that during the president’s first year between 1.5 to 2 million jobs were “saved or created” by the stimulus. When the December unemployment numbers were released, Christina Romer, President Obama's chairwoman of the Council of Economic Advisers, pointed out that while jobs were still being lost, the rate of loss had slowed dramatically. "In the first quarter of 2009, when we first came in, we were losing on average 691,000 jobs per month. With these new numbers in the fourth quarter, we were losing 69,000 jobs," Ms. Romer claimed. . . .

I think that the data that this piece provides is pretty damning. Please read.

The Obama administration has changed how it is counting jobs helped by the stimulus. The strange thing is that they dramatically change how the jobs will be counted, but the totals seem to remain unchanged.

Peter Orzsag, director of the Office of Management and Budget, has made a big change in the way the Obama administration keeps track of jobs created by the stimulus bill.

Instead of trying to count all the jobs "created or saved" by the $787 billion legislation, the White House will now count all jobs funded by the bill, according to a Dec. 18 memo written by the OMB chief.

OMB says doing this will help improve data quality and improve the public's understanding of the numbers, but some Republican critics view it as a calculated move towards boosting the overall jobs created by the bill.

"Instead of trying to define jobs created or saved this will look at jobs funded by the Recovery Act," OMB spokesman Tom Gavin told The Washington Times.

"No one understood what created or saved meant," he added. "So we are using a more easy to understand definition." He also noted that the Government Accountability Office recommended these changes in a report issued last fall. . . .

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Blogger Al B. said...

Figure 1 sure looks like a decaying exponential to me. The fact the the U3 unemployment rate appears to be asymptotically approaching some maximum value isn't indicative of any improvement at all. The dollar index also appears to have bottomed out, at least temporarily.

I would expect that any further weakening of the dollar would drive further increases in the cost of all imported raw materials as well as imported energy used in producing goods and services in this country, thereby driving up costs and reducing demand, resulting in even higher unemployment.

Printing money through deficit spending has this effect. If you look at the dollar index (DXY), you'll see that the dollar started tanking last March, shortly after the stimulus package was signed into law. We haven't seen much inflation yet, only lots of small businesses forced out of business by rising costs which they can't absorb in the short term as well as larger businesses. Eventually though, even the larger businesses will have to start passing on their higher costs to their customers, which will result in higher costs of everything (inflation), further reductions in demand, and even higher unemployment, i.e., 'stagflation'.

But then, I'm not an economist (or a liberal democrat), so what do I know?

1/27/2010 4:29 PM  

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