Unemployment since Obama became president
Unemployment Rate
Total unemployed, plus all marginally attached workers plus total employed part time for economic reasons, as a percent of all civilian labor force plus all marginally attached workers
Will the unemployment rate still be above what it was when Obama became president three years ago? It sure looks that way.
Peter Ferrara has this discussion available here.
Total unemployed, plus all marginally attached workers plus total employed part time for economic reasons, as a percent of all civilian labor force plus all marginally attached workers
Will the unemployment rate still be above what it was when Obama became president three years ago? It sure looks that way.
Peter Ferrara has this discussion available here.
Labels: Economy, unemployment
posted by John Lott at 5:39 AM
1 Comments:
One can write a differential equation:
ao'' + bo' + co = F(t)
where o is economic output, or a proxy for it, such as the unemployment rate, and F(t) is the sum of a lot of stochastic processes, each with its own probability distribution. Normally, such an equation would be useless. But, in this case, the graph of the unemployment rate looks like a somewhat underdamped decaying exponential response to a step function, i.e., F(t). This indicates a couple of things:
- The economy is a somewhat underdamped system
- Whatever is causing this effect must be huge in scale to affect the entire US economy
Some possibilities include:
- The banking crisis of 2008 (but this has long since been resolved, so it's an impulse, not a step)
- $5.5 trillion in new sovereign debt crowding out investment in the private sector
- Wave upon wave of new regulations driving up the cost of providing goods and services
- Obamacare
- The constant threat of higher taxes forcing businesses to discount future profits in their planning
- Dodd/Frank
- QE1 and QE2
None of these things is going away anytime soon, so we can expect the unemployment rate to continue to decay to a stable point of about 9 percent.
The recent drop in unemployment appears to be due to an anomaly in the way unemployment is estimated, i.e., 470,000 discouraged workers completely left the workforce, thereby reducing the unemployment rate.
The rise in unemployment started in the 3rd or 4th quarter of 2008 with the banking crisis, but, this was an impulse that was resolved by the end of the 2nd quarter of 2009. So we can blame the initial part of the problem on the Bush administration, but Obama owns the last 2.5 years of it.
Of course, it would have been impossible for the banks to write over $2 trillion in bad loans without FannieMae and FreddiMac to underwrite them. In April of 2001, 3 months after he took office, Bush wrote a letter to congress requesting tighter controls on Fannie and Freddie. But, unlike Obama, the republicans have never had a filibuster-proof majority in the senate. When the republicans finally managed to get meaningful regulations on Fannie and Freddie out of committee in 2005, the bill was promptly filibustered by the democrats. The filibuster was led by senators Dodd and Obama.
So, maybe Obama owns the banking crisis also.
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