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| Economy |
| Expect the ‘Unexpectedly |
| 2011-08-26 |
In the Obama years, bad news has always surprised the media. It is the most common adverb of the Obama years: “unexpectedly.” ● “Sales of U.S. previously owned homes unexpectedly dropped in July,” reported Bloomberg. ● “Manufacturing in the Philadelphia region unexpectedly contracted in August by the most in more than two years as orders plunged and factories shed workers,”reported Bloomberg Businessweek. ● “Consumer spending unexpectedly fell in June,” reported Reuters. ● “Dismal economic data on Thursday pointed to an unexpectedly abrupt slowdown in manufacturing and a pickup in inflation,” reported the New York TimesÂ’ business page. This is just in the past week; hundreds of articles each month note that some new bit of economic data is contrary to the expectations of experts. But the term is starting to become an object of ridicule within the conservative blogosphere as the country endures its third year of hard economic times under President Obama. Three years after a financial crisis, unemployment has hit painful highs, GDP growth has been sluggish at best, and some predict a “double dip” recession. During this period, the Obama administration and its allies have repeatedly made bold promises about imminent prosperity — from an infamous chart that projected that the stimulus would keep unemployment rate below 8 percent, to the administrationÂ’s “Recovery Summer” tour of 2010, to Nancy PelosiÂ’s prediction that passing Obamacare would create 400,000 jobs “almost immediately,” to the presidentÂ’s prediction that we would enjoy 3.1 percent growth this year and 4.1 percent growth in 2012 and beyond. For about three years now, conservative bloggers have chuckled at how frequently the unveiling of bad economic news comes with the adverb “unexpectedly” in media reports. As InstapunditÂ’s Glenn Reynolds, Michael Barone, and others have often asked, unexpected to whom? “I think itÂ’s a combination of cognitive dissonance, the terra nova nature of the post-bubble economy, and a healthy dose of partisanship,” suggests Ed Morrissey, who has blogged about the ubiquitous adverb regularly at HotAir.com. Perhaps the perpetual surprise reflects a media desire to focus on pockets of growth or prosperity — at least with a Democrat in the White House. In a widely diversified $14 trillion economy, one can almost always find some areas of economic improvement. Certainly, a media that wanted to paint a more dire portrait of the economy would have no shortage of material to work with. ThereÂ’s considerable evidence that AmericaÂ’s problems in job creation are much worse than the most widely cited numbers would indicate. For example, President Obama spent much of the past year touting the number of consecutive months of private-sector job growth that the country had enjoyed. But that boast comes with some asterisks. Traditionally, the population of American workers grows each month, and while economists differ a bit on precisely how many new jobs are needed each month just to keep the unemployment rate stable, itÂ’s often more than the figure Obama cites. The Heritage Foundation puts the figure at 100,000 to 125,000; some argue that any serious reduction of the unemployment rate will require adding 200,000 jobs per month. Only four months out of the past 17 have seen at least 200,000  jobs added; some months of growth have been minimal, such as January 2010, when the economy added 16,000 private-sector jobs,. Nonetheless, like a bloop single keeping a batterÂ’s hitting streak going in baseball, meager months of job growth permit Obama to keep bragging about how many consecutive months he has presided over private-sector job growth. Obama is lucky that these months of sluggish growth have occurred while a staggering number of Americans have “helped” keep the unemployment rate down by leaving the work force. From February 2001 to February 2009, the American work force grew from 143.7 million people to 154.4 million, an increase of about 10.7 million, or about 89,000 per month. In July 2011, the work force was back down to 153.2 million. For the entirety of the Bush years, the civilian labor-force-participation rate was never lower than 65.8 percent and remained between 66 and 67 percent for almost every month of the two terms. For ObamaÂ’s presidency, it debuted at 65.7 percent and has dropped to 63.9 percent, the lowest since July 1983. If we presume that the countryÂ’s 1.1 million “discouraged workers” (who donÂ’t count as officially unemployed because they have stopped looking for work) would like a paying job someday, we can reasonably conclude that the unemployment rate wonÂ’t be significantly declining anytime soon; as more unemployed workers are hired, those who have stopped looking for work will start looking again and be added to the official count of the unemployed. In the business media, some voices do note these hidden jobless. But even then, thereÂ’s often a tone of mystery or befuddlement, as if no one ever considered that the governmentÂ’s primary solution to high unemployment, the stimulus, could fail to achieve its goal. Groupthink is another possible explanation for why, even after three years, each bit of bad news seems to strike the business-media world as a surprise. One columnist who covers these issues closely observes that many bank economists, such as those at Goldman Sachs and J. P. Morgan, have been similarly optimistic in recent years, only recently slashing their forecasts. “Generally, theyÂ’re all using the same model that the White House uses, all built with a lot of these Keynesian assumptions about the impact of government spending, and about multipliers, and so on,” he says. “If you think those multipliers are way too high, then that would explain why they have been overly optimistic.” In a way, the monthly unemployment report and quarterly economic data are like Charlie Brown trying to kick the football. Each month, the administration and its faithful await the new data with optimism and eager anticipation, certain that this will be the month that the long-awaited national hiring spree begins. Each month, the Bureau of Labor Statistics snatches away the football — and after 30 months, many who watch the economy professionally still canÂ’t see it coming. In December 2010, about a half-hour after new job numbers showed unemployment hitting 9.8 percent, one CNBC anchor closed a segment, “After the break, weÂ’ll have your e-mails about signs of economic recovery,” then he paused and chuckled, motioning to the unseen teleprompter. “Yeah, that was written before 8:30.” If you ever have to get into a fistfight, make sure your opponent is an economist often consulted by the mainstream media, because that way youÂ’ll always have the element of surprise. |
| Posted by:Beavis |