NRO Corner Blog
May 18, 2010
by Diana Furchtgott-Roth
Ron Brownstein makes an assertion in the new National Journal that has raised the spirits of Democrats going into the mid-term elections: “If the economy produces jobs over the next eight months at the same pace as it did over the past four months, the nation will have created more jobs in 2010 alone than it did over the entire eight years of George W. Bush’s presidency.”
Brownstein reaches this fallacious conclusion in two ways. He projects a stream of overly generous job creation numbers — 290,000 per month — until December 2010. The economy rarely has job increases of that magnitude for nine months in a row. Then, Brownstein compounds the error by comparing net job creation in the Bush presidency (1.9 million) with what he thinks would be gross job creation in year 2010 of the Obama presidency (2.9 million).
The net figure of 1.9 million jobs created under President Bush includes recession years caused by the bursting of the tech bubble in 2000-2001 and by the September 11 attacks, as well as the bursting of the housing bubble in 2007. Although Congress passed Bush’s proposed tax cuts in June 2001, they were not designed to be fully implemented until 2003. As a result, job losses continued into 2002. In May of 2003, Congress enacted an additional round of tax cuts, which produced 46 months of uninterrupted job growth beginning in September of 2003, the second-longest streak on record.
To be fair and balanced, Brownstein should also use the net jobs created under President Obama — from January 2009 to December 2010. Using Brownstein’s assumption of 290,000 monthly jobs for the remainder of 2010, the net job loss since the start of January 2009 would be 1.8 million, the sum of 4.7 million lost jobs in 2009 and 2.9 million potential jobs created in 2010. Even under Brownstein’s generous assumptions, the economy would lose jobs during the Obama presidency during the period 2009 to 2010. That’s right, not only zero net new jobs, but a job loss of 1.8 million.
At 9.9 percent, unemployment is higher than in any of the Bush years (when unemployment peaked at 7.2 percent), even after Obama’s $787 billion stimulus program and other large spending bills. The administration’s 2011 budget forecasts that unemployment will stay near double-digit levels for the next two years, because labor-force participation is at 1986 levels; almost 2 million people are still on the sidelines waiting to come back into the labor force, raising the unemployment rate when they do. According to the Bureau of Labor Statistics, 46 percent of the unemployed have now been out of work for 6 months or longer — the highest since the Bureau of Labor Statistics started keeping records in 1948.
To be sure, the employment situation is gradually improving. But if Democrats think that they can crow about jobs going into the mid-terms, then they really are out of touch.
Diana Furchtgott-Roth, former chief economist of the U.S. Department of Labor, was a Senior Fellow at Hudson Institute from 2005 to 2011.
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