Truth About Jobs

Truth About Jobs

By PAUL KRUGMAN
Published: October 7, 2012

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.

 

Fred R. Conrad/The New York Times

Leading the charge of what were quickly dubbed the “B.L.S. truthers” was none other than Jack Welch, the former chairman of General Electric, who posted an assertion on Twitter that the books had been cooked to help President Obama’s re-election campaign. His claim was quickly picked up by right-wing pundits and media personalities. 

It was nonsense, of course. Job numbers are prepared by professional civil servants, at an agency that currently has no political appointees. But then maybe Mr. Welch — under whose leadership G.E. reported remarkably smooth earnings growth, with none of the short-term fluctuations you might have expected (fluctuations that reappeared under his successor) — doesn’t know how hard it would be to cook the jobs data.

Furthermore, the methods the bureau uses are public — and anyone familiar with the data understands that they are “noisy,” that especially good (or bad) months will be reported now and then as a simple consequence of statistical randomness. And that in turn means that you shouldn’t put much weight on any one month’s report. Continue reading “Truth About Jobs”

Some Uncomfortable Truths for Republicans

AFL-CIO Now

 

09/10/2012; William Spriggs

William Spriggs is the chief economist at the AFL-CIO. 

Here is an uncomfortable truth. Republicans’ obstruction of President Obama’s policies means they have gotten the policies they wanted. But, these policies have been least effective in growing jobs.

The Romney campaign argues that the path to American prosperity starts with lowering the taxes on American business and unleashing American entrepreneurial zeal. Republicans complain that President Obama has not cooperated with them to implement this vision. Of course, the truth is more nuanced.  Republicans have won on getting President Obama’s version of helping small business. The Republican version is to give tax cuts to those with high income and then argue that high income and small business are synonyms. So, a hedge fund manager with a Swiss bank account who brokers sending a firm from Kokomo, Ind., to China is equated with the owner of a five-person start-up electronics firm in Newton, Mass. The president has targeted tax cuts to actual small business income and expenses—eight cuts in all, ranging from: the payroll tax holiday that lowers taxes for firms that are hiring workers; to tax credits for hiring workers who were veterans or long-time unemployed; to allowing firms a longer window to credit losses from earlier years onto current profits; to expensing investments in machinery and equipment; to relief on scheduled estimated tax payments allowing companies to hold cash longer; and, to a 75 percent exclusion of capital gains for small businesses. Many of the president’s proposals were included in the American Recovery and Reinvestment Act (ARRA) stimulus that Republicans dismiss as a waste and failure. Many were included in his Small Business Job Act of 2010. Continue reading “Some Uncomfortable Truths for Republicans”

Obstruct and Exploit

New York Times

Obstruct and Exploit

By PAUL KRUGMAN; Published: September 9, 2012
 
Fred R. Conrad/The New York Times

Does anyone remember the American Jobs Act? A year ago President Obama proposed boosting the economy with a combination of tax cuts and spending increases, aimed in particular at sustaining state and local government employment. Independent analysts reacted favorably. For example, the consulting firm Macroeconomic Advisers estimated that the act would add 1.3 million jobs by the end of 2012.

There were good reasons for these positive assessments. Although you’d never know it from political debate, worldwide experience since the financial crisis struck in 2008 has overwhelmingly confirmed the proposition that fiscal policy “works,” that temporary increases in spending boost employment in a depressed economy (and that spending cuts increase unemployment). The Jobs Act would have been just what the doctor ordered.

But the bill went nowhere, of course, blocked by Republicans in Congress. And now, having prevented Mr. Obama from implementing any of his policies, those same Republicans are pointing to disappointing job numbers and declaring that the president’s policies have failed. Continue reading “Obstruct and Exploit”