08 March 2013

Good News, Bad News

It's the nature of (semi-)democratic politics for those parties out of power to complain that Good News isn't really (for some conspiracy that *they* would never engage in) so Good, and that Bad News (ditto) is really worse. And so it is today. The monthly jobs report was released earlier today. If not already, certainly by the end of the day, the Republicans/Libertarians/Free Market Capitalists will be crying foul.

Let's have a look at some numbers.

The headline grabber is that the "official" unemployment rate for February was 7.7%, which was last the case just before Obama was inaugurated: December, 2008. Non-farm payrolls were up more than predicted, 165-170K predicted with 236K reported. So, all is good, yes? Well, may be not.

As stated a few times here: these numbers come from sample surveys, not censuses, and the "official" unemployment rate has been, and continues to be, criticized as too positive. The "official" number is called U-3, and it is down .6 point YoY. U-6, the most encompassing measure is down from 15.0 to 14.3, .7 point, but a much lower percentage improvement. The ratio of employed to population (an arguably more accurate measure) is the same at 58.6%. So, how did the rate go down? The measured labor force decreased by about 2,000,000. Ain't algebra fun?

You can peruse Table B-1 for clues to where the jobs are growing (hint: it ain't those who live in 90210 land). The right wingers should be happy. Hated Gummint employment is down, again.

Is the situation any better? The global numbers say no. Wall Street has been hogging the trough of QE money, with little effect on Main Street. Those with a Left Wing agenda, and those who've seen the movie before, said from the outset that Obama's stint in the White House wouldn't help much if the only lever used was monetary policy. Monetarism, when it isn't used to actively punish Main Street, ends up punishing Main Street anyway, since it is a matter of pushing a string. That can't work. As the Prosperity Through Austerity folks in Europe are demonstrating, efforts to force the victims of the Great Recession to suffer even larger losses only leads to greater concentration of wealth, and thus power.

The numbers tell the story. And the story is that those out of power have managed, in part because those in power are feckless, to increase the pressure on the necks of the 99%. Makes one wonder whether quants have devolved to being mouthpieces, just as economists did some decades ago.

No comments: