Look: I am eager to learn stuff I don't know--which requires actively courting and posting smart disagreement.

But as you will understand, I don't like to post things that mischaracterize and are aimed to mislead.

-- Brad Delong

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Monday, July 11, 2011

The Book of Jobs

Friday's jobs report was dismal.  David Beckworth was not surprised.   The  missing jobs conundrum has been a recurring theme at Stagflationary Mark's place.  At Mark's link you'll find how we've strayed from the path of righteous exponential growth.  Well, exponential growth can't go on forever, but that doesn't mean we had to plunge face first into a ditch.  Alas, though, "Our failure to create jobs is a choice, not a necessity — a choice rationalized by an ever-shifting set of excuses."

Mark points to this FRED graph, throws on an exponential trend line, and notes: "The party ended in 2000."  I prefer to look at exponential growth on a log scale - it makes it easier for my aging, bifocal-laden eyes to see what's really happening.  See for yourself.   (Unfortunately, you have to click the green drop-down pointer next to "Graph " click the "log scale" box, and then scroll down and click "Redraw Graph."  Go ahead.  It's fun!)

It's tempting to throw a straight line from about 1945 to 2000 and simply agree with Mark.  However, while I don't disagree with Mark, there is more to the story, and I think it's worth telling.

I've drawn straight green lines peak to peak, and color coded Presidential Administrations red and blue.  Connecting the dots this way gives us not a straight line, but an "S" curve.  It's no illusion.  Here are the slopes of the line segments.

Time                               Slope (Y-axis units/Mo.)
11/1/43 -- 2/1/57              .00135
4/1/60  --  3/1/70              .00223
3/1/70  --  3/1/80              .00201
3/1/80  --  6/1/90              .00153
6/1/90  --  2/1/01              .00147
2/1/01  --  1/1/08              .00049

Most economic graphs show the Clinton administration bucking the slow, agonizing death-trend of the America we think we know and love.  Here, though, all Billy-Bob could do was come close to holding the line.  Shrub, on the other hand, was able to come even closer to totally killing job growth in America, from his very first day in office - what an awesome accomplishment!

B. Hoover Obama might be the first president since his early depression-era namesake to give us negative job growth.  What an accomplishment that would be, as well!  Alas, though, more awful than awesome.  Here is a close-up view of recent history, if you can stand to look at it.  Even getting back to the anemic Shrub-era trend line looks like a forlorn hope at this point.

Yes, the party ended in 2000.  But all the good wine was consumed 40 or 50 years ago, and we've been swilling dregs and Ripple for decades, all the while deluding ourselves that it was Château Gloria.

We've been hung over for at least three years now, and someday and we'll realize what chumps we've been - the whole party has been at our expense!  Sadly, waking up penniless and face-down in the gutter is not a good way to start a decade.

Update:  After I finished the post, I got to wondering if BHO might really be (potentially) the first Prez to accomplish negative job growth over his term - after all, Poppy was pretty horrible.  Turns out, he actually added almost 23,000 jobs.  Over the course of a full four years.  That's how Terrible, Horrible, No Good, Very Bad it was.  But at least it wasn't negative! 

Here's another way to look at it.  I calculated a 4-Yr rate of change by taking a running twelve month average, subtracting the value of  48 months previous, and dividing the difference by the previous value to get a percentage. 

(Update 2 {nuances and a link} in this paragraph) This is again color coded by Prez party, except I gave Poppy his own color (GOLD!) to differentiate from St. Ronnie of the (Lannister?) Crimson V.   Connecting tops and bottoms gives a very discouraging trend channel.  It should come as no surprise that the decline starts in 1980.  Also note that every Rethug regime (ex-Ike, who was an actual Republican, not a Rethug) starts with a big downturn, and every Demo admin (ex-BHO, the Republican in Demo clothing) starts with a big upturn. This is no coincidence.  I've stated before that Rethugs pretty much own recessions (even Ike had 3!) and recessions kill job growth, so this should not surprise anyone who has been paying attention.

I look at that trend channel and weep.  Things might get better someday, but between now and then, things are going to get a hell of a lot worse.


Stagflationary Mark said...

Thanks for the plug.

We've been hung over for at least three years now, and someday and we'll realize what chumps we've been - the whole party has been at our expense! Sadly, waking up penniless and face-down in the gutter is not a good way to start a decade.


The Arthurian said...

Great post title!

Thanks for the FRED lesson. Even with your help it took me a minute to find it. But I got it now.

Any chance the S curve is due to the baby boom?

I don't remember Ike so much, but I do remember Sputnik being in the news.

Jazzbumpa said...

Art -


Any chance the S curve is due to the baby boom?


My mother-in-law remembers Ike's admin as being hard times. I think the post WWII decade would be that way, regardless. I don't love Ike, but I do respect him as being a leader who really tried to do what was best for the country, rather than wing-nut ideologues and moneyed interests. I don't think you can say that of any Rethug since.


BadTux said...

As Krugman put it, when you party like it's 1937, you shouldn't be surprised when you get 1937 results.

- Badtux the Party Pooper Penguin

Jazzbumpa said...

Mark -

Yer Welcum. I like to credit my food-for-thought emporiums.

Tux -

I'm eskeered it's more like 1929.