Posted: 08 Oct 2012 12:24 AM PDT
Good news for Obama in the form of polls, employment reports -- whatever -- drives the right crazy:
Truth About Jobs, by Paul Krugman, Commentary, NY Times: If anyone had doubts about the madness that has spread through a large part of the American political spectrum, the reaction to Friday's better-than expected report from the Bureau of Labor Statistics should have settled the issue. For the immediate response of many on the right — and we're not just talking fringe figures — was to cry conspiracy. ...
It was nonsense, of course. Job numbers are prepared by professional civil servants, at an agency that currently has no political appointees. ... Furthermore, the methods the bureau uses are public...
Some background: the monthly employment report is based on two surveys. One asks a random sample of employers how many people are on their payroll. The other asks a random sample of households whether their members are working or looking for work. And if you look at the trend over the past year or so, both surveys suggest a labor market that is gradually on the mend ... The eye-popping number from Friday's report was a sudden drop in the unemployment rate to 7.8 percent from 8.1 percent, but ... you shouldn't put too much emphasis on one month's number. The more important point is that unemployment has been on a sustained downward trend. ...
None of this should be taken to imply that the situation is good, or to deny that we should be doing better — a shortfall largely due to the scorched-earth tactics of Republicans, who have blocked any and all efforts to accelerate the pace of recovery. (If the American Jobs Act, proposed by the Obama administration last year, had been passed, the unemployment rate would probably be below 7 percent.) The U.S. economy is still far short of where it should be, and the job market has a long way to go before it makes up the ground lost in the Great Recession. But the employment data do suggest an economy that is slowly healing...
And that's the truth that the right can't handle. The furor over Friday's report revealed a political movement that is rooting for American failure, so obsessed with taking down Mr. Obama that good news for the nation's long-suffering workers drives its members into a blind rage. It also revealed a movement that lives in an intellectual bubble, dealing with uncomfortable reality — whether that reality involves polls or economic data — not just by denying the facts, but by spinning wild conspiracy theories.
It is, quite simply, frightening to think that a movement this deranged wields so much political power.
Posted: 08 Oct 2012 12:21 AM PDT
This is from David Warsh (note that, despite Dodd-Frank and other regulatory measures instituted since the financial crises,we are still susceptible to the shadow bank run problems described below):
Posted: 08 Oct 2012 12:03 AM PDT
Posted: 07 Oct 2012 09:57 AM PDT
Paul Krugman has another post arguing that, contrary to Romney's assertions, "the progress is real":
The Payroll Data: Another quick note, this time on what the payroll data say. Again, you want to focus on somewhat longer-term trends, not monthly numbers. Over the past year the employer survey says that we've added 1.8 million jobs, or 150,000 a month ... And this number is likely to be revised up.
This is substantially more than the number of jobs we need to keep up with population growth, which is currently something like 90,000 a month. ...
So the two survey are saying the same thing: job growth fast enough to make gradual progress on the employment front. Not fast enough; it will take years to restore full employment, and we should, um, end this depression now. But the progress is real.
I think the 90,000 estimate is a bit low, 125,000 is probably closer (e.g. see here). So while I agree we are making progress, I also agree it's far too slow -- perhaps even slower than Krugman's estimates. The question is why, and two answers come to mind. First, as Krugman explains here, recoveries from financial crashes tend to take awhile:
However, as he also explains, this is far from the slowest recovery we've seen -- "it's way better than Bush's recovery." We started with a huge problem, the initial stimulus along with the efforts at the Fed stopped it from being an even bigger problem -- the no-stimulus at all outcome would have been far worse -- but more needed to be done.
That brings up the second point. Republicans in Congress have blocked efforts to implement fiscal policy measures over and above the initial stimulus effort (and they would have blocked the Fed as well if they had the power to do so). An aggressive infrastructure construction effort would, for example, buttress monetary policy and speed the recovery, and it would also provide benefits (including higher future growth) that exceed costs, but Republicans are not going to let that happen. This is like hiding half of the medicine a patient needs for recovery based upon medical quackery, and then asking why the doctor is doing such a lousy job.