First Principles

Today on Nevada Newsmakers we had a spirited discussion about the unemployment rate, with a claim that the number of jobs has actually been increasing under President Obama.  (You can see the full panel discussion here – it was much feistier than usual!)  I threw out some rough approximation of stats during the debate (you never know what’s going to come up), but thought they were worth following up with in some detail here.

Our unemployment rate is officially dropping, but the economy isn’t adding enough jobs to keep up with new entrants into the workforce – a net loss.  It’s only because so many potential productive workers are just dropping out of the economy altogether that the math works out for the administration.  The bottom line from the Washington Post?

If the same percentage of adults were in the workforce today as when Barack Obama took office, the unemployment rate would be 11.1 percent. If the percentage was where it was when George W. Bush took office, the unemployment rate would be 13.1 percent.

The Washington Post gives some demographic excuses for this, but even they have to admit that it’s bad for the economy.  And it’s not what President Obama and his supporters are claiming – they’re claiming the jobs picture is getting better and the economy more productive, when neither claim is accurate.

Ed Morrissey has a great roundup on this issue in The Financial Times as well, with more stats and charts.  Here’s the guts of it, though.

But what about the claim that this is all a result of public sector layoffs (Aiieee!!!  Scary Austerity!!!)?

Not so much – at the federal, state, and local level, the actual numbers of government employees is either rising or standing relatively steady.

Besides – government employees are on the expense side of the overall economic growth ledger.  They are a cost to the economy, which is why it’s so important to minimize government agencies and programs (and yes, the people who staff them) when their economic drag doesn’t pay for itself by substantially empowering or protecting the private economy.   In other words, you don’t grow an economy by increasing public employees just for the sake of increasing employment – quite the opposite, in fact.  If centrally managed and mandated government employment was economically beneficial, that whole Cold War thing would have worked out a little differently…

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I do want to take a second to thank Chris Wicker and Elisa Cafferata, who were on the panel with me.  I disagree with them both fundamentally about many many many things, but they’re both particularly smart, thoughtful folks who care deeply about our public policies, and are fun and interesting to spar with to boot.  It’s a shame there isn’t time in the show for the many fascinating off-line discussions I’ve had with these and other amateur (but brilliant and knowledgeable) wonks and pundits in our community.  I’m very grateful to Sam Shad and the rest of the folks at NNM for letting me come play in their sandbox from time to time!