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Friday, March 4, 2011

Worse Is Better, and Less Is More

There is an economic measurement phenomenon developing which has the potential -- in a bass ackwards way -- to help Obama's re-election prospects.

The jobs situation is so bad and so lacking in hope that more and more people simply are dropping out of the workforce, which has the effect of dropping the "unemployment rate."  I have posted about this phenomenon after the release of unemployment numbers in January and February.

Today, numbers were released showing another small drop in the "unemployment rate" to 8.9%.  Once again, this gain reflects a large number of people who have dropped out of the workforce.

Jay Cost at The Weekly Standard has an interesting take on the effect of unemployment on the upcoming election, and includes this chart showing the precipitous drop in the percentage of people participating in the workforce:

We need to start focusing on this number, and the real unemployment rate (including people who have given up looking).

We face the real prospect of Obama being reelected by spinning worse as better, and less as more.

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  1. I'm also looking forward to your upcoming series on polling, given that the "official" unemployment rate is in some part an opinion poll, i.e. "Do you want to find a job?"

  2. Obama doesn't need to spin...he'll simply lie.

  3. It's pretty easy to get the outcome you want when you simply drop 5 million people from the available job force.

  4. Why the Rising Price of Gas May Sink Obama

    "According to an analysis of data from the Department of Energy, in every election but one, stretching all the way back to 1976, if the price of gasoline was higher on Election Day than four years before, the incumbent president or the candidate of his Party seeking to succeed him LOST."

    White House Dossier

  5. It is going to be difficult to oppose the spin of the MSM, the business press and leftist spin doctors. The MSM, lately, has been reporting on employment figures like they were football scores and their team was winning.

    The knowledgeable, articulate David Rosenberg from Gluskin Sheff:

    "Yes, the unemployment rate dipped again to a 22-month low of 8.9% from 9.0% in January and the nearby high of 9.8% in November. This reflected a 250k risein Household employment — the third increase in a row — and a flat participation rate. A couple of behind-the-scene facts: from October to February, an epic 700k people have left the work force. If you actually adjust for the fact that the labour force participation rate has plunged this cycle to a 27-year low the unemployment would be sitting at 12% today. Moreover the employment-to-population ratio — the so-called “employment rate” — stagnated in February at 58.4% and is actually lower now than it was last fall when “double dip” was the flavour du jour."

    Zero Hedge

  6. This is disturbing. Not the numbers, but that the administration is going to be able to spin this.

  7. I knew it, there was just something so phoney in the numbers released today. Las Vegas unemployment was over 14%, no way was that going to change so quickly. There were quirks with recipients receiving unemployment checks & the system as well which may reflect a false number.

    Obama could just get away with the spin too. Yikes!

  8. I agree that we need to start focusing on the real unemployment rate but I am thinking that by 2012, there will be so many people out of work that no matter how Obama's team spins the 'economic recovery', he'll just be ignored.

  9. While the general public may be not be able to explain an 8% unemployment figure, they know that gas and groceries are costing them more and jobs are few and far between. The cost of gas in 1980 played a big part in electing Ronald Reagan.

    1980 ad: The Democrats are out of gas.

    I also think the protesters, and their often violent and vile attacks, are wearing thin on the public. Most people do not behave like that.

    PS... As of yesterday, gas was $3.67 in Corning, NY.

  10. That's exactly right!  We aren't able to slow or eliminate dropping unemployment rates, so if we change the rules by the way unemployment is conventionally measured, we can spin the results so it helps Republicans.

    Is there anything we can do other than drastically cutting spending to increase unemployment?  Reading the Constitution and pro-life legislation are OK since it looks like we are doing something, but it obviously don't help us proactively reduce jobs.

    Any ideas?

  11. So, how does the right-wing plan to reduce unemployment? Let me guess: tax cuts for the rich, corporate welfare and "austerity" for the rest of us.