What am I missing? (Obama's performance from a historical perspective)

[HughMoran]

The 3 charts below show what many people consider to be the ultimate indication of the health of an economic recovery - the unemployment rate. I've repeatedly read here that the current Great Recession is a "jobless recovery" like no other and how Obama isn't doing enough to bring the rate down. Calls for the return of the WPA are common. In 1929, the U.S. unemployment rate averaged 3%. By 1933, 25% of all American workers and 37% of all nonfarm workers were unemployed. The WPA wasn't passed until April of 1935 - two years after the unemployment rate hit 25%. Unemployment didn't lower to 10% until 1941 - 6 years later (yes, it was still a major achievement considering how high the peak was.) Reagan started his term with the same unemployment rate as Obama (~7.5%). Granted, the rate wasn't rising rapidly at the time, but it was 6 months before he did anything to "help" the economy and look what the result was! Obama acted immediately upon getting into office and the slowing of the unemployment rise was already evident just 10 months later. This appears to be very good performance when put into historical perspective.

If the unemployment rate has indeed peaked during this current downturn (remains to be seen), shouldn't Obama get credit for negotiating one of the faster recoveries (fastest?) from a major economic downturn (>10% unemployment)?

[obliviously]

1. Your right it has only gone up 25% this is great for one year!

[HughMoran]

3. Perfect ID

:cheers:

[obliviously]

5. The current numbers are based on

people actually drawing unemployment insurance and not on total unemployed and you are comparing them with total unemployed in the 20's 30's and 40's, I would think that is not comparing apples to apples is it?

[HughMoran]

8. The absolute numbers were not the point of my post though

Thus my previous comment.

[obliviously]

10. The actual numbers of unemployed are more

realistically double the number of people drawing unemployment checks. The figures that predate the unemployment insurance should not have even been included in this comparison. also we had a recession caused by the dot com crash at the begging of this decade that should be shown for a more complete picture.

[HughMoran]

14. The dot com crash peaked at only 6.3%

No matter how you look at the numbers, my point still stands. :shrug: What are you arguing?

[obliviously]

15. The picture is not pretty right now no matter how you color it!

The 'Real Unemployment' Needs Real Solutions


"Everyone agrees that the recession is over," said Larry Summers, President Obama's top economic advisor, on December 13.

Yet December's unemployment numbers announced last Friday suggest otherwise -- especially the 'real unemployment' figure.

According to the Bureau of Labor Statistics the official unemployment rate is 10%, a figure which itself caused a major headline to blare, "U.S. Job Losses Dim Hopes for Quick Upswing."

But in fact real unemployment in the United States is stuck at a dismal 19%, a figure nearly twice the so-called official number. And the economy is short a staggering 22.4 million jobs in order to have an overall full unemployment rate of 5%, which is more than twice the 9 million figure the administration is using.

These sharp contrasts arise because the BLS uses only survey data rather than much more accurate payroll data. It also excludes changes in employment among the nation's 11.2 million farm and self-employed workers, even though together they represent more than 7% of the civilian labor force. Most important, however, it does not take into account the 15.1 million workers who are either part-time-of-necessity because they can't find full-time work, marginally attached because they live on the very fringes of employment, or out of the labor force because they are discouraged and have given up looking.

With these three adjustments made, the number of real workers in all four categories of unemployment -- BLS, part-time-of-necessity, marginally attached, and discouraged -- totals 30.4 million instead of BLS's single category figure of 15.3 million. And the number of real unemployed workers has increased by 13.6 million since the start of the recession instead of by BLS's figure of 8.4 million -- in contrast, we should have been creating a net 2.6 million new jobs just to keep up with the natural growth in the labor force of around 108,000 workers per month.

Even the average full-time worker in the U.S. is now working the economic equivalent of only 33 hours per week, a record low number. And in further stark signs of the ongoing depths of this recession, unemployed workers are out of work an average of at least 29 weeks, and the real number of workers unemployed a half year or more is around 10 million.

The economic recovery that Mr. Summers was trumpeting after the meager 2.2% September GDP growth numbers came out is in fact a "jobless recovery" -- one which already involves the largest absolute number of unemployed American workers ever, and one which may see another half million jobs lost before we really bottom out. And sadly, it will take years to recover both the 13 million jobs that have been lost in just the last two years plus the 9 million additional jobs we need to find in order to get back to real full employment.

Read more>http://www.huffingtonpost.com/leo-hindery-jr/the-real-unemployment-nee_b_420108.html

[HughMoran]

16. Guess you've never heard of the terms 'relative' and 'trend'

You are not arguing with my post, you are arguing about how unemployment is measured. I agree that the actual numbers are bigger than they appear, but that's not the point! It was a comparison of how long it took for past president to act and how long before the effects of their actions were realized by the American people (in Reagan's case, he made things worse. To turn a rapidly rising unemployment rate during a major downturn to a '0' slope in just 10 months is historically significant.

[obliviously]

17. I am a realist and things are getting progressivly worse!

[HughMoran]

18. I hope not

I am not sure which way the economy is going to turn next, but the recent trends do appear to be pointing to an improving job market.

[obliviously]

20. I sure hope you are right! I'm not ready to give up yet

but it is getting harder every month.

[pinqy]

36. Where on earth did you get that idea?

The unemployment is not and has never been based on Unemployment Insurance. It's a monthly household survey that defines unemployed as anyone who did not work in the reference week and has been actively looking for work in previous 4 weeks.

Bureau of Labor Statistics

People are classified as unemployed if they meet all of the following
criteria: They had no employment during the reference week; they were
available for work at that time; and they made specific efforts to find
employment sometime during the 4-week period ending with the reference
week. Persons laid off from a job and expecting recall need not be
looking for work to be counted as unemployed. The unemployment data
derived from the household survey in no way depend upon the eligibility
for or receipt of unemployment insurance benefits.

Oh, and there was no systematic measurement in the 20s and 30s...questions on whether someone had a usual job and if they were doing it were included in the 1930 Census, and there was a 1936 postcard census, but that was it....certainly no measurement of all unemployed.

[goclark]

2. K and R

[PM Martin]

4. kick

[tblue]

6. I think so, too. Good points you made. nt

[leftstreet]

7. Must have been that Cash For Clunkers thing that did it, eh?

If you believe the unemployment rate is hovering around 10%....

:eyes:

Where are the fucking jobs?!

[ddeclue]

9. The official gov't unemployment rate is a work of fiction - it is not the REAL unemployment rate

which is actually more like 15% nationwide or 20% if you count the vastly underemployed.

The rate does NOT reflect the actual number of employed but only those who have applied for and are still receiving unemployment insurance benefits - when those run out they stop counting you whether you have a job or not.

[pinqy]

37. Wrong, wrong, wrong

Bureau of Labor Statistics

People are classified as unemployed if they meet all of the following
criteria: They had no employment during the reference week; they were
available for work at that time; and they made specific efforts to find
employment sometime during the 4-week period ending with the reference
week. Persons laid off from a job and expecting recall need not be
looking for work to be counted as unemployed. The unemployment data
derived from the household survey in no way depend upon the eligibility
for or receipt of unemployment insurance benefits.

[Glenda]

11. k & r

[blue neen]

12. .

:thumbsup:

[Hydra]

13. -1

We're already in the midst of 17%+ actual unemployment and it's supposed get WORSE.

Are we supposed to wait around until it gets to 25%+(assuming we aren't there already) before we do something massive about it?

[obliviously]

19. You are thinking the way I am

rather than find ways to try to make are current situation sound okay why don't we face the truth and find real answers to the problems we are having. You can make it sound wonderful when you are working full time but if you are part of the 20% that don't know if they can pay their house payment at the end of the month reality sets in hard!

[HughMoran]

22. I am working - my 3rd job in less than a year

Just to add a little perspective - I was out of work for 3 months last year, did contract work for a few months, now I work at a small company where health insurance is $36,000/year (before company subsidy, obviously) and the owner (& me) are praying for health insurance reform so we can hopefully stay in business for the long-haul. I know it's not easy out there, and that is precisely why I am trying to be optimistic (besides, the idea for this post just hit me randomly as I was watching Futurama - lol)

[Hydra]

33. That's fine

But guess what? The Repubs(Or Powers that Be) crashed the system, and all they're talking about is more ways to siphon off money from people while more jobs disappear in a continuing vicious cycle.

I was out of work for 9 months last year(laid off right before the inauguration) and only barely got back to work because someone I knew had a position available for $9.50/hour barely 30 hours. I was almost making more on unemployment.

President Obama needs to be aggressively getting people back to work so that the consumption cycle(70% of our economy) can get back on track. No Jobs = lowered demand for goods/services = lower sales = layoffs/firings, rinse and repeat.

So on top of this, Our agent of hope and change is giving handouts to the people who CAUSED this in the hopes that they will fix it and won't do it again(Is that what he's really hoping?).

Too many people are pleading "Patience" or "It's only been ___ time." IMO, we don't HAVE time. This is KILLING people. And they're finding more ways to kill us in the meantime and get fat off of it.

[Hekate]

21. KnR.

Good luck getting through to the Debbie Downers. :hi:

Hekate

[HughMoran]

23. It honestly never occurred to me that this post would be controversial.

The idea just came to me out of the blue. After doing some research, I was actually somewhat surprised to see that the Obama plan was implemented and has shown positive effects faster than plans implemented during other major downturns (looking at the unemployment data for the past 100 years.)

[obliviously]

26. I am a little touchy it's the 18th of the month and I don't have all

my bills paid that were due on the first(late on the 15th) I'm kind of sweating it now but it looks like i'll have them paid pretty soon but that will only give me a week to come up with next months payments.

[HughMoran]

28. Uggh,

...hope your situation turns around soon. :( Wish there was something I could do to help.

[obliviously]

29. I need to quit whining and keep trudging!

[Political Heretic]

24. Hmm well, you might be missing the fact that policy matters more than popularity

be that popularity in the positives or in the negatives.

Or you could be missing the fact that unemployment is at 13% in my state.

Or the fact that we need to be measuring unemployment using U6 numbers, not U3 numbers.

A few things you could be missing.

But hey I supported ARR (aka stimulus bill) as a perfect example of something that was insufficient and had some crappy policy sections, but had enough good in it and benefits for working families to make supporting it the better options.

My biggest disappointment with the handing of the economic crisis, part of the mass give-away buffet to wall street and the trickle-down economic approach of this Democratic administration pulled straight out of Reagan's playbook...

....my biggest disappointment is the lack of political courage to address the structural injustices in our economic system itself - in our core way of doing business in this country - and instead sought to return everything to the status quo. The status quo is why we keep having these burst bubbles, and its progressively leading to greater income inequality, debt, declining wages and all around economic unsustainability.

Rather than doing something serious about it, this administration continued on with wall street business as usual. :(

[HughMoran]

25. Where does popularity fit into the argument I am making?

I don't see what you're getting at - please expand...

(I see you edited and I've already agreed (above) that different unemployment numbers would look, well, different, but that was not the point of my post either)

Edit 2: I now see that you were responding to my rhetorical - I did not catch that)

[Political Heretic]

27. Sorry I've been editing a few times as you typed a response.

Take another look at it, I'm done now.

Sorry about that.

[HughMoran]

30. Responding to the fully edited version :o)

(I tend to do quick updates to my posts as well, so I have sympathy)

I've already responded to the unemployment number issue - I don't disagree that the actual numbers are larger.

Yeah, ARRA helped me directly by subsidizing my Cobra, am hopeful that it was enough to turn the economy back to the + column.

Nobody 'liked' the Wall St. bailouts, though Bush did set this into motion and Obama chose not to 'disrupt' a policy that seemed to be stopping the freefall of the banking system. Did I like it? No, nobody liked it - but I gave the new kid a 'pass' on this as I can't imagine he had the expertise to deal with so many crises simultaneously (banking collapse, housing collapse (related), automotive industry collapse, Afghanistan & Iraq, Gitmo & working on ARRA - all on his plate right away - not an enviable position.)

As stated above, I'm not sure that he has had enough time to catch his breath and work on the injustices in our economic system yet. There was a reason that I mentioned FDR not passing the WPA until 2 years after the unemployment rate hit 25%. The President is neither a dictator, nor can he do too many things at once without losing focus on what is important - in this case simply stopping the free-fall was job 1. Will he make fundamental changes to our "way of doing business" in the future? I don't know - the political climate in this country is horrible - people seem to care more about 'teams' than getting anything done (nobody on the left or the right is exempt from this statement.) Look at my O/P again and think about how long it has historically taken to change things - this in a country that prides itself on being 'strong and stable'. We can help or we can be 'in the way'. I will try to help progress in any way that I can.

[Political Heretic]

31. One of the disagreements I seem able to have thoughfully with others is on this:

Many people that I talk with seem to talk about the speed of the administrations actions, reminding me that its simply not possible to fix everything at the same time and in such a condensed timeframe (one year.)

Oh, how I wish that speed was my concern. For example on health care, I wish that my issues were that the proposed health insurance reform legislation does not go far enough, or doesn't get where we need to be quickly enough. Because then, I think all the arguments people made to me would have to win the day.

The logic that we can't always get 100% of what we want or need at once is very true, the reasoning that we sometimes need to lay a strong foundation to support future change before we can see all the change that we need would make the most sense. The reminder that the administration inherited a huge mess and can't possibly be expected to solve everything in a short period of time would be totally compelling.

But the problem for me is that my objections are not about the speed of things. My objections are than I feel the administrations policy decisions on several critical issues are actually taking us in the wrong direction from where we need to go. I don't believe they are getting some of what we want but not all; I believe they're creating policies that are going to do more harm to working families in the long run than they will do good, and policies that will have to be undone in the future before the right kinds of policies can be made.

When you believe an administration is moving in a completely different direction that you believe to be the right one on major issues, it creates a problem that can be solved with the "he hasn't had enough time" argument.

On ARR for example, there's an example of policy that I had problems with, but at least felt was going in the right direction, and had enough benefits for working americans that it needed to be supported, even with its flaws.

On HCR I feel the opposite - that the policy goes too far in placing the wants and whims of the financial elite ahead of then needs of low-income and working class individuals and families, and will make the long term situation for working Americans worse where health care is concerned, not better. That's a directional problem, not a speed problem.

I do have to object to your characterization of Obama and Wall Street however. I feel that a careful examinations of the policy and actions implemented after this administration took office reveals and administration that inherited TARP yes, but took great strides of its own accord to craft economic policy that was a hand out to Wall Street, not just passively follow through on what was already in-place from a previous administration. Obama's economic team, Geithner, Summers and the rest - are trickle-down economic practitioners; no one I am aware of denies this. And their decisions across a wide range of decisions impacting Wall Street reflected that commitment.

[HughMoran]

34. Philosophical differences

It seems that you are essentially conceding that the economic policies put into place (mostly ARRA) have helped get a grip on the economy as I've pointed out in the O/P. This is good.

OK, now you say that you have several policy issues related to the direction his administration has chosen. OK, this is valid criticism and I don't have any issue with that. Specifically, you seem to have an issue with HCR and "placing the wants and whims of the financial elite ahead of then needs of low-income and working class individuals and families". OK, that's an admirable description, but I have looked at the compromises made and I feel that most of what is in the HCR bill will benefit many millions of "low-income and working class individuals and families". I see this as a step in the right direction and a building block for future progress. Nationalized exchanges, for instance, make it relatively easy to add a "public plan" later when it is clear that the ins. companies are still not playing fair. The exchanges should also allow people like me who pay 2-4x for the same coverage to get competitive rates due to being in a pool of thousands versus about 10 now. Removing lifetime caps and preventing the ins. cos from denying coverage due to a pre-existing condition is crucial to guaranteeing coverage for many who can't get it now. There are other regulations that will prevent insurance companies from playing unfairly. Is this the perfect solution? No. Can idiots like Lieberman be convinced to do the right thing and allow for single payer or a public option? I dare anybody to claim that they can be. Can reconciliation be used to force some changes to the system? Yes, but it can not be used to implement many of the critical changes included in the bill that are not related to budgetary matters (if I've read all the essays on this topic correctly.)

As far a Wall St. versus Obama goes, I'm not an expert on this topic (as I doubt many here are), so my comments will be limited. I will repeat what I said earlier - that I don't think Obama was an expert on Wall St. policy when he took office and that he chose the path of least resistance due to the impending depression. This included a relatively conservative approach to Wall St. He wasn't willing to bet the future of the country on gambling wrong in an area where he was not an expert and had to rely on people whom he thought were competent enough to get us through this mess. Ideal? No, but a depression would have been the end of his Presidency. If things economic are indeed turning positive (back to my O/P), then he will now have some leverage to start cracking down on the practices that lead to this crisis. I don't see what the hurry was to crack down during the crisis. All this "oh, it's too late now, he's already let the horse out of the barn" talk doesn't hold much water with me. He's the President and can set his agenda as he sees fit. Granted the levies on the ass-hole banks who are giving out massive bonuses during a major downturn is perhaps only a small beginning, but it signals that he is NOT happy with the system as it is currently set up. And don't forget what the Agent said in the Matrix - "only human". Barack Obama is not a machine - assuming one can just batter him incessantly into submission is probably not the path to the best outcome. Dialog like this is constructive, but this discussion is the exception, not the rule.

[TheKentuckian]

32. The biggest issue is at least closing the barn door before another horse

gets out. We're already potentially on the hook for many trillions and have taken trillions more in economic damage and crisis response and really can't handle another crash. There may as well be an invading army and a naval blockade for all the risk of economic security we have right now. Responsible leadership cannot just hide and ignore something of this magnitude.

The systemic financial issues just won't wait for any taking of breaths or incrementalisim, we've got to end to big to fail and "heads I win, tails the taxpayer loses" like the day before yesterday and if the political will isn't there then the President is responsible for laying out the situation and the constant risk of another meltdown the rally the people to pressure Congress and name names of those who are being obstacles to national security.

[HughMoran]

35. kick

for a change of pace - whew!