Tag: economics

About that “zero” job-growth number

The economy gained 45,000 jobs in August — 62,000 in the private sector. Yet the media have been telling us since Friday that the United States added “zero” jobs, as the economy essentially ground to a halt.

I’m not here to defend anyone. In fact, 62,000 is a terrible number, and is really all the proof we need that the fragile recovery has flickered out. But for news organizations to adopt the methodology used by the government amounts to a form of innumeracy.

The key to this is that the government counts the 45,000 Verizon workers who were on strike as having lost their jobs. There may be reasons for the government to do that, but it’s ludicrous for the media to repeat it. They didn’t lose their jobs, they’re back at work and thus those 45,000 jobs shouldn’t enter into anyone’s calculations.

So who did lose their jobs? Government workers — 17,000 of them. And, as I already noted, the economy added 62,000 private-sector jobs. Thus there is no basis for asserting that there was zero job growth.

Oh, wait — there is one thing: the “optics of a giant zero in the jobs column,” as the New York Times puts it. It’s a stark bit of political symbolism. It’s just that it also happens not to be true.

Scott Brown versus economic reality

“Failure should be admitted in Washington, and not repeated. With last month’s news that we lost another 85,000 jobs, and with unemployment stuck in the double digits, it’s time to admit that while the $787 billion stimulus had the best of intentions, it failed to create one new job.”

— Scott Brown, Boston Globe, Jan. 14

“Perhaps the best-known economic research firms are IHS Global Insight, Macroeconomic Advisers and Moody’s Economy.com. They all estimate that the bill has added 1.6 million to 1.8 million jobs so far and that its ultimate impact will be roughly 2.5 million jobs. The Congressional Budget Office, an independent agency, considers these estimates to be conservative.”

— David Leonhardt, New York Times, Feb. 16

Brownanomics

Assuming that state Sen. Scott Brown wins the Republican nomination for the U.S. Senate on Dec. 8 (first he has to get by perennial candidate Jack E. Robinson), he’s going to have to show greater economic literacy than he has to date.

On Saturday, the New York Times quoted Mark Zandi — an economic adviser to Republican president candidate John McCain in 2008 — as saying that the $787 billion stimulus has created or saved 1.1 million jobs. If anything, Zandi added, the stimulus should have been bigger.

And Martin Feldstein, a top economic adviser to President Ronald Reagan — who, you may have heard, was also a Republican — told the Times that the main problem with the stimulus was that it relied too much on tax cuts and too little on federal spending. Feldstein said:

There should have been more direct federal spending that would have added to aggregate demand. Temporary tax cuts and one-time transfers to seniors were largely saved and didn’t stimulate spending.

Now here’s what Brown told the Boston Globe when asked if he would support a second stimulus (he would not): “It hasn’t created one job that I’m aware of.”

It gets worse: “It created government jobs certainly, and government is doing well.” Brown does not explain what government jobs were created, but perhaps he’s referring to government jobs that were saved — those of teachers, police officers and firefighters. Would he rather they be unemployed?