the Spin Payrolls
Spin the Payrolls
By PAUL KRUGMAN
Published Tuesday, August 10, 2004
When Friday's dismal job report was released, traders in the Chicago
pit began chanting, "Kerry, Kerry." But apologists for President
Bush's economic policies are frantically spinning the bad news.
Here's a guide to their techniques.
First, they talk about recent increases in the number of jobs, not
the fact that payroll employment is still far below its previous
peak, and even further below anything one could call full
employment. Because job growth has finally turned positive, some
economists (who probably know better) claim that prosperity has
returned - and some partisans have even claimed that we have the
best economy in 20 years.
But job growth, by itself, says nothing about prosperity: growth can
be higher in a bad year than a good year, if the bad year follows a
terrible year while the good year follows another good year. I've
drawn a chart of job growth for the 1930's; there was rapid nonfarm
job growth (8.1 percent) in 1934, a year of mass unemployment and
widespread misery - but that year was slightly less terrible than
1933.
So have we returned to prosperity? No: jobs are harder to find, by
any measure, than they were at any point during Bill Clinton's
second term. The job situation might have improved somewhat in the
past year, but it's still not good.
Second, the apologists give numbers without context. President Bush
boasts about 1.5 million new jobs over the past 11 months. Yet this
was barely enough to keep up with population growth, and it's worse
than any 11-month stretch during the Clinton years.
Third, they cherry-pick any good numbers they can find.
The shocking news that the economy added only 32,000 jobs in July
comes from payroll data. Experts say what Alan Greenspan said in
February: "Everything we've looked at suggests that it's the payroll
data which are the series which you have to follow." Another measure
of employment, from the household survey, fluctuates erratically;
for example, it fell by 265,000 in February, a result nobody
believes. Yet because July's household number was good, suddenly
administration officials were telling reporters to look at that
number, not the more payroll reliable data.
By the way, over the longer term all the available data tell the
same story: the job situation deteriorated drastically between early
2001 and the summer of 2003, and has, at best, improved modestly
since then.
Fourth, apologists try to shift the blame. Officials often claim,
falsely, that the 2001 recession began under Bill Clinton, or at
least that it was somehow his fault. But even if you attribute the
eight-month recession that began in March 2001 to Mr. Clinton - a
very dubious proposition - job loss during the recession wasn't
exceptionally severe. The reason the employment picture looks so bad
now is the unprecedented weakness of job growth in the subsequent
recovery.
Nor is it plausible to continue attributing poor economic
performance to terrorism, three years after 9/11. Bear in mind that
in the 2002 Economic Report of the President, the administration's
own economists predicted full recovery by 2004, with payroll
employment rising to 138 million, 7 million more than the actual
number.
Finally, many apologists have returned to that old standby: the
claim that presidents don't control the economy. But that's not what
the administration said when selling its tax policies. Last year's
tax cut was officially named the Jobs and Growth Tax Relief
Reconciliation Act of 2003 - and administration economists ...