Promises, Promises

[Donutboy 0]

Wishful Thinking on Jobs

Sources: Bureau of Labor Studies; Economic Reports of the President, 2002, 2003 and 2004.

By PAUL KRUGMAN

Published: March 9, 2004

Despite a string of dismal employment reports, the administration insists that its economic program, which has relied entirely on tax cuts focused on the affluent, will produce big job gains any day now. Should we believe these promises?

Each February, the Economic Report of the President forecasts nonfarm payroll employment — generally considered the best measure of job growth — for the next several years. The black line in the chart above (inspired by a joint report from the Economic Policy Institute and the Center on Budget and Policy Priorities) shows the actual performance of employment, both before and after its peak in March 2001. The gray lines show the forecasts in the 2002, 2003 and 2004 reports. Notice that the February 2004 forecast, which, as in previous years, is based on data only through the preceding October, is already 900,000 jobs too high.

Economic forecasting isn't an exact science, but wishful thinking on this scale is unprecedented. Nor can the administration use its all-purpose excuse: all of these forecasts date from after 9/11. What you see in this chart is the signature of a corrupted policy process, in which political propaganda takes the place of professional analysis.

This chart, created by two non-partisan groups, shoots down two popular Republican myths. First, that this is Clinton's recession. The loss of jobs started in March 2001, AFTER Bush's first tax cut. The first tax cut was NOT to spur the economy. The economy was flowing along fine then, thanks to Clinton.

The second Republican myth that this shoots down is that the lingering recession was caused by 9-11. The slide continued for the remainder of 2001 but then leveled off. It's been stagnant ever since, even with two additional tax cuts.

This also shows that Bush's economists are very bad and always seem to be overly optimistic about the economic signs in front of them or someone is intentionally overstating jobs growth and then quietly lowering them months later.

The one thing that it does show is that this Bush has no more of a clue on economic issues than his Daddy did 12 years ago!!

[Tiger in Spain 0]

Not so fast, my friend. According to the Business Cycle Dating Committee of the Cambridge, Massachusetts-based National Bureau of Economic Research (the people that officially sets the timing of the country's business cycles), the data suggest the recession actually began in December 2000, while Clinton was still in office.

The U.S. economy slipped into recession during Democrat Bill Clinton's presidency rather than under President George W. Bush, the group that officially sets the timing of the country's business cycles may decide.

The seven-member Business Cycle Dating Committee of the Cambridge, Massachusetts-based National Bureau of Economic Research may change its determination that the recession started in March 2001 to reflect recent revisions to government growth statistics, committee members, including Victor Zarnowitz, said.

``We are discussing it now, and in my opinion it should be changed,'' Zarnowitz, a senior fellow at the Conference Board in New York, said in an interview. ``The recession started in December 2000.'' Zarnowitz said he was speaking for himself and not for the committee.

The committee's review has been triggered in part by revised Commerce Department figures last month showing that gross domestic product shrank in the third quarter of 2000 instead of beginning its slide in the first three months of 2001.

Bloomberg.com

Cronwatch.com

[Donutboy 0]

Not so fast, my friend. According to the Business Cycle Dating Committee of the Cambridge, Massachusetts-based National Bureau of Economic Research (the people that officially sets the timing of the country's business cycles), the data suggest the recession actually began in December 2000, while Clinton was still in office.

The U.S. economy slipped into recession during Democrat Bill Clinton's presidency rather than under President George W. Bush, the group that officially sets the timing of the country's business cycles may decide.

The seven-member Business Cycle Dating Committee of the Cambridge, Massachusetts-based National Bureau of Economic Research may change its determination that the recession started in March 2001 to reflect recent revisions to government growth statistics, committee members, including Victor Zarnowitz, said.

``We are discussing it now, and in my opinion it should be changed,'' Zarnowitz, a senior fellow at the Conference Board in New York, said in an interview. ``The recession started in December 2000.'' Zarnowitz said he was speaking for himself and not for the committee.

The committee's review has been triggered in part by revised Commerce Department figures last month showing that gross domestic product shrank in the third quarter of 2000 instead of beginning its slide in the first three months of 2001.

Bloomberg.com

Cronwatch.com

Yes, this is the same group who have claimed they were coerced into moving the date back into 2000 by the government after initially setting March 2001 as the start of the recession. I made a post (with links) to this article a few weeks back. The charts themselves tell the story. Job growth was still strong until after Bush took office. That's when the jobs started disappearing!!

[Tigermike 3,717]

Yes, this is the same group who have claimed they were coerced into moving the date back into 2000 by the government after initially setting March 2001 as the start of the recession.

That is a serious thing to say. Do you have anything to back it up or is that just something you just heard or madeup?

Links please.

[CarolinaTiger 0]

DB: 1st off, welcome back!

2ndly, you're still harping on who this recession belongs to? you forgot to turn the talking-points page, dude. yet, i guess if you can redefine the term "marriage", you can also redefine how recessions are documented as well. you continue to play the blame game on the most recent recession if you wish...your underlying premise must be that recessions are totally avoidable? even your good buddie TA admits that the economy moves in cycles....

3rdly, on JOBS, you are exactly right. fewer jobs have been created than predicted by this administration. *NEWSFLASH: a prediction was wrong!* i know that counts as a lie in the dem's book, but try to put aside the 'hate bush' glasses and consider these questions as objectively as possible: fewer jobs have been created than predicted. does that mean the tax cuts didn't work? does that mean that a higher tax level would've prevented all those job losses and/or created more jobs? or could it be that other factors contribute to the employment data? your arguments here seem shallow and overly partisan.

4thly, you seem to base your "recession" argument solely on the employment figures. good move.

and finally, you have been replaced by bottomfeeder, and that is a good thing.

ct

[Tigermike 3,717]

*NEWSFLASH: a prediction was wrong!* i know that counts as a lie in the dem's book,

Unless it was a democrat who made the wrong prediction!

[Donutboy 0]

DB: 1st off, welcome back!

2ndly, you're still harping on who this recession belongs to? you forgot to turn the talking-points page, dude. yet, i guess if you can redefine the term "marriage", you can also redefine how recessions are documented as well. you continue to play the blame game on the most recent recession if you wish...your underlying premise must be that recessions are totally avoidable? even your good buddie TA admits that the economy moves in cycles....

3rdly, on JOBS, you are exactly right. fewer jobs have been created than predicted by this administration. *NEWSFLASH: a prediction was wrong!* i know that counts as a lie in the dem's book, but try to put aside the 'hate bush' glasses and consider these questions as objectively as possible: fewer jobs have been created than predicted. does that mean the tax cuts didn't work? does that mean that a higher tax level would've prevented all those job losses and/or created more jobs? or could it be that other factors contribute to the employment data? your arguments here seem shallow and overly partisan.

4thly, you seem to base your "recession" argument solely on the employment figures. good move.

and finally, you have been replaced by bottomfeeder, and that is a good thing.

ct

CT, It's not a "wrong prediction". It's a cycle of overly optimistic predicitons. This administration claims X-amounts of jobs will be created and has their photo-op. Months later when the economic picture shows the figures weren't even close, the photo-op is somewhere else. An occasional mistake is not only likely but probable. However, when the mistake is always to the optimistic side and is never publicly corrected, it gives the impression that someone is being dishonest. Of course, anyone who still believes this administration is honest wouldn't believe the truth if it jumped out and bit them in the rear.

As for the post (with link) to the other article I mentioned, it's there and I know everyone read it. I seriously don't have the time and am not going to put the effort into finding something that you wouldn't believe anyway, even if I found it.

Yes, recessions are cyclical. However, recoveries are determined more by policy than chance. This administration has only tried one thing to spur the economy, tax cuts for the wealthy. Perhaps if he wanted to spur the economy, he should do something to give the nation confidence in his leadership and follow through on some campaign promises.

First off, he should admit that eliminating the federal budget deficit is more important than rewarding himself and his fellow wealthy contributors with tax cuts. In the 2000 campaign, he said we could have tax cuts and still have a budget surplus. Of course, I'm sure some of you still believe that whopper as well.

Secondly, Social Security was considered solvent for at least the next 25-30 years. He promised to add more money to the Social Security surpluses and make it solvent into the forseeable future, along with privatizing it for the younger populace. He has done neither. Instead, he's taken surplus Social Security funds, paid in through Social Security taxes on us working stiffs, and used them to fund his tax cuts and his wars.

Third, he should stop making transfers of jobs overseas profitable with tax breaks and should instead make companies prepare a public impact disclosure before closing a company here and opening one overseas. Let the American public know who's abandoning them and then let them decide if they still want to reward them with their continued business. He should also have immediately fired the nut in his administration that made the statement that losing jobs overseas was good for America and made a statement of his own that jobs staying in this country was a priority of this administration. In other words, ACT presidential for the working class. Let them know that you care and that you're trying to do something to help THEM.

[TitanTiger 21,241]

The loss of jobs started in March 2001, AFTER Bush's first tax cut.

This is incorrect. Bush had been in office less than two months when this recession started...by the most liberal estimates. And his tax cut had not gone into effect. In fact, he didn't even get to sign the tax cut into effect until June 2001:

http://www.whitehouse.gov/news/releases/20...6/20010607.html

None of Bush's policies had any chance to make it through Congress, much less have any effect on the economy by March 2001. This is a recession that was either begun, or well on it's way to beginning under Clinton. Sorry, but those are the facts.

[Weagle98 119]

Jobs are a lagging indicator. At the end of a recession and an the beginning. So if loss of jobs started in 2001 the recession was already occurring.

[Proud Tiger 4,261]

If you promise I don't have to have Kerry as Pres. I will gladly give up my job!!!!