Thursday, August 07, 2003

I Can't Believe this Guy Chaired the Pulitzer Jury
Bob Herbert had an awful opinion piece in the NYT today. He's trying to convince himself the economy is in shambles and it's only getting worse:

This alleged economic upturn is not just a jobless recovery, it's a job loss recovery.

Bob, that's the way it normally goes; it's nothing to get your shorts in a bunch over. If we look at our last recession, the economy sharnk by 0.5% in 1991 and then grew by a healthy 3.0% in 1992. However, unemployment rose from 6.8% in 1991 to 7.5% in 1992 before finally declining for several years. So how bad is it really? "Grim" according to Bob:

The official jobless rate, now 6.2 percent, does not come close to reflecting how grim the employment situation really is. The official rate refers only to those actively seeking work.

Did you just discover discouraged workers, Bob? Do you think this is a new phenomenon? Over the last 48 years the unemployment rate has been over 6.2% in 15 years. And in the same period, the labor force participation rate has been worse in 35 years. And as I wrote yesterday, it is far worse in Europe. But Herbert keeps the idiocy coming at a quick pace:

Right now there is no plan, no strategy for turning this employment crisis around. There is not even a sense of urgency.

Seen any tax cuts recently, Bob?
And then he trots out this old saw:

Working Americans need jobs just to survive. But the Bush administration equates the national interest with corporate interests, and in that equation workers can only lose.

Who do you think hires all those poor out of work people? Where do you think paychecks come from?
And then he ends on an ominous note:

There are ways to spark the creation of good jobs on a large scale in the U.S. But that would require vision, a long-term financial investment [read: taxes --ed.] and, most important, a commitment at the federal level [read: more taxes --ed.] to the idea that it is truly in the nation's interest to keep as many Americans as possible gainfully employed.

Original vision there Bob. The Employment Act of 1946 specified that the "The Congress declares that it is the continuing policy and responsibility of the Federal Government ... to promote maximum employment, production, and purchasing power." Then the Humphrey-Hawkins Act of 1978 set full employment as the Federal Reserve's policy goal. The problem is, unremitting monetary expansion leads to inflation, which acts as a tax on savings. Stagflation anyone? The wonderful economic performance of the 80's and 90's is largely because Paul Volker and then Alan Greenspan decided to ignore Humphrey-Hawkins and focus on price stability. But I'm sure that won't get through to Herbert.

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