The President's Stimulus Rhetoric

Posted by Brian Patrick on

FYI –

Last night, President Obama again tried to sell his failed stimulus plan as a success. With the unemployment rate above 8.5% for 33 consecutive months and over two-thirds of Americans saying the President has made “no real progress” on fixing the economy, it’s hard to believe the President’s stimulus spin.


• Kroft: I'm not saying this as fact, and hindsight is always 20-20. But there's [a] general perception that the stimulus was not enough. That it really didn't work. That...

• President Obama: Let me stop you there, Steve. First of all, there's not general perception that the stimulus didn't work. (CBS 60 Minutes Interview, 12/11/11)


Background:

The Obama Administration predicted that if the stimulus passed it would keep unemployment below 8%. (The Job Impact Of The American Recovery and Reinvestment Plan, 1/10/09)

Since the stimulus was signed into law, unemployment has never dropped below 8%. In fact, it has been above 8.5% for nearly 3 years. (BLS, Accessed 12/12/11)

75% Of Americans Believe The Nation Is On The Wrong Track.

68% Of Americans Say President Obama Has Made NO Real Progress On Fixing The Economy

60% Disapprove Of President Obama’s Handling Of The Economy.

58% Of Americans Disapprove Of The President’s Approach To Job Creation.

51% Majority Of Americans Disapprove Of The Job President Obama Is Doing.

49% Of Americans Believe President Obama’s Policies DID NOT prevent a deeper recession


Last Month Alone 315, 000 Discouraged Americans Stopped Looking For Work:

The Drop In Unemployment Wasn’t Caused By Unemployed Americans Finding Work, It Was Because 315,000 Americans Dropped Out Of The Work Force. The unemployment rate dropped to 8.6 percent in November from 9 percent in October in the jobs report released Friday. … Yet, properly understood, the new figures reveal more about the depth of distress in the job market than about real improvement in job prospects. Most of the decline in November’s unemployment rate was not because jobless people found new work. Rather, it is because 315,000 people dropped out of the work force, a reflection of extraordinarily weak demand by employers for new workers. (The New York Times, 12/2/11)

The “Hidden” Unemployed: Decline In Labor Force Participation Worsens The Unemployment Situation Facing The Nation. What did mainly lower unemployment? A look at the labor force participation rate tells the story. In November it fell by a statistically significant 0.2, from 64.2 percent to 64.0 percent, as more of the unemployed in the face of a weak job market gave up looking for work and withdrew from the labor force. Job search is not costless. Had the participation rate not declined last month, with employment as it was, the November unemployment rate would have been 8.9 percent - a rate not statistically different from October's 9.0 rate. (It takes a monthly change of 0.2 in the unemployment rate to be statistically significant.) So what we really had was mostly bad news. Officially measured unemployment declined mainly because more jobseekers lost hope and joined the already swollen ranks of the "hidden" unemployed. … By my estimate, if the hidden unemployment rate is added to the officially reported unemployment rate (the government's U-3 series), the adjusted total rate is currently over ten percent - well above the official 8.6 percent rate. And that doesn't include the understatement in unemployment due to response errors in the data collection process or the full-time equivalent of partial unemployment, i.e., the involuntary loss of working hours among the part-time employed. (Real Clear Markets, 12/5/11)

11% Unemployment - Declining Labor Force Hides The Rise In “Real Unemployment.” America is employing a decreasing proportion of its people. At the start of the recession, the employment-to-population rate was 62.7 per cent. The rate is now 58.5 per cent. Last month, unemployment fell from 9 per cent to 8.6 per cent. On the surface, this looked like a welcome leap in job creation. In reality, more than half of the fall was accounted for by a decrease in the numbers “actively seeking” work. The 315,000 who dropped out of the labour market far exceeded the 120,000 new jobs. According to government statistics, if the same number of people were seeking work today as in 2007, the jobless rate would be 11 percent. (The Financial Times, 12/11/11)

U.S. Job Creation Flat In November, Drop In Unemployment Rate Attributed To A “Sharp Decline In The Workforce.” Job market conditions in the United States were flat in November, as Gallup's Job Creation Index remained at +14, similar to the range seen since May. This is another indication that Friday's sharp drop to 8.6% in the government's U.S. unemployment rate may be overstated. … Further, it may be that the sharp decline in the U.S. unemployment rate last month was more of a negative than a positive sign for the U.S. economy. The sharp decline in the workforce last month may be more of a reflection of the large number of Americans who have given up looking for work -- as a result of the length and depth of the jobs recession -- than of any improvement in job market conditions. (Gallup, 12/6/11)

Underemployment Up From a Year Ago. Underemployment, a measure that combines the percentage of workers who are unemployed with the percentage working part time but wanting full-time work, is 18.1% in November, as measured by Gallup without seasonal adjustment. That is up from 17.8% a month ago and 17.2% a year ago. (Gallup, 12/1/11)





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