This morning, Washington Post political reporter Dan Balz shares his deep thoughts, this time about how (supposedly) Obama launches campaign against Romney, but his real opponent is the economy. In general, Balz’s reporting of President Obama’s reelection campaign kickoff is fine, although certainly nothing original or interesting. The problem is when Balz turns away from his forte, which is politics, to economics, which which is clearly NOT his forte. For instance, take paragraph #3 (please!), and particularly the sentence I’ve bolded:
It was perhaps a coincidence in timing that the president’s opening events came just a day after a tepid employment report that showed only modest private-sector job creation. The unemployment rate ticked down a tenth of a percentage point, but only because the labor force shrank as discouraged Americans gave up looking for work.
Whoa, wait a minute – “but only because?” Warning, alert, #FAIL #FAIL #FAIL!!! In fact, the unemployment rate “ticked down a tenth of a percentage point” for a host of reasons, not “only” because of any one thing, and certainly NOT “only” because “discouraged Americans gave up looking for work.” What’s so lame about this #FAIL by Dan Balz is that if he had only read the article he himself linked to, by Ezra Klein, he would quickly see why he’s dead wrong about this. Let’s let Ezra Klein explain:
In a March report titled “Dispelling an Urban Legend,” Dean Maki, an economist at Barclays Capital, found that demographics accounted for a majority of the drop in the participation rate since 2002…Based on survey data, Maki found that about 35 percent of Americans who have dropped out of the labor force since the recession began in 2007 do want a job, but they have become too discouraged to fire off résumés. That’s a sign of a weak labor market. But the other 65 percent are people who have left the labor force and do not want a job. The biggest chunk of that group seems to be composed of baby boomers, those 55 and older, who have decided to retire early.
Hello, Mr. Balz? Did you read that? If so, did you understand that? If so, it certainly wasn’t reflected in your comment about how the unemployment rate “ticked down” only because “discouraged Americans gave up looking for work.” Wrong, as Ezra Klein and Barclay’s Capital explained very clearly in the article you yourself linked to.
In addition to the fact that most of what’s going on here is demographics, not “discouraged workers,” there are other factors as well for the decline in the unemployment rate, and the 180-degree turnaround from where we were when Barack Obama inherited an economy in free fall from Bush/Cheney. The fact is, when Obama took office, we had been hemorrhaging jobs – as many as 800,000 per month! – due to the Wall Street meltdown and Housing Bubble bursting under Bush. Within a few months of Democrats taking charge, passing an economic recovery package, saving the U.S. auto industry, restoring stability to our financial system, etc., the jobs losses rapidly came to an end and transitioned into private sector job gains – now 26 months and counting. In fact, if it weren’t for public sector job cuts (teachers, firefighters, etc.), thanks to Republicans at the federal (hey Eric Can’tor, I’m talking to YOU!) and state level (hey Transvaginal Bob McDonnell, I’m talking to YOU!), our economy would currently have hundreds of thousands more jobs, and the unemployment rate would have “ticked down” significantly further:
Public sector austerity is a major drag on the job market. If public employment had merely matched the anemic growth in the private sector, the unemployment rate would be more like 7.4% than 8.2%. And if it had matched its post-World War II average, the unemployment rate would be under 7%.
Of course, Dan Balz doesn’t mention any of that in his shallow, clueless-about-economics article in the Post today. Perhaps in the future, Balz might stick to the politics and leave the economics to Ezra Klein and others who actually know something about the subject?
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