22
Aug
12

unemployment numbers as a case study in the contradictions of american politics

I’ve been trying to learn enough about the employment numbers to get beyond the debate as I’ve seen it, which consists of one side showing one chart and then saying “see, no one’s employed,” or throwing out one chart and sneering “Obama has done better than Bush at creating jobs.”

It’s all more complex than anyone wants it to be though, and this post is what helped me open it all up.

One reason comparisons are tricky is that recessions don’t coincide neatly with presidential terms. Obama took office in the depths of a recession, but Bush was in office for a while before 9/11 happened (though the economy was soft before that). Another reason things are tricky is that one needs to distinguish between JOBS and PEOPLE EMPLOYED. The numbers are not the same. As quirk of the data, there are usually about 9M more people who are employed than their are jobs. This is a result of the methodology used in creating these numbers. Last, one needs to consider the category of employment being discussed. Seasonally adjusted or not, private sector or total jobs (private+public).

In short, one should consider:

1. timing

2. statistical methodology

3. statistical category

The post I cited above puts these together nicely.

The most interesting thing I learned is that Bush’s employment numbers were buoyed pretty significantly by public sector employment. For example, Obama created more JOBS than Bush had created by the same time in his presidency, but he has also created MANY MORE private sector JOBS.

I capitalized “jobs” in the preceding paragraph because things are different when one looks at “number of people employed.” Bush increased the NUMBER OF PEOPLE  EMPLOYED much more than Obama by this time in his term.

But again, comparing the same point in Obama and Bush’s first term isn’t that helpful. More instructive is to compare numbers from the same time after the “bottom” of the recession. Bush had created a good deal more JOBS 28 months after the worst of his recession hit. However, again, in keeping with the point about Bush’s reliance on public sector employment, he only created slightly more private sector jobs than Obama.

On the other hand, Obama has created slightly more EMPLOYED PERSONS in the 28 months since the big 2008 recession.

Now for a philosophical point. None of this matters as much as people says it does. People compare Bush and Obama as if it somehow settles an important political point. Obama supporters reason that if they can show that Obama has done better than Bush, than conservatives must “shut up” about the economy. But there is nothing that can be proven by these comparisons. The reason is that political choices are made in terms of comparisons. One might be happy with Bush’s performance due to believing that it’s better than Al Gore’s, and dissatisfied with Obama because of confidence that McCain would have been even better.

Or alternatively, a conservative who voted for Bush might think that Obama is doing better, but nonetheless believe that he’s doing badly in an absolute sense. This is not hypocritical. One’s preferences can change. One might have believed that Bush managing the economy well due to deception or just partisan fervor, but after seeing Obama do slightly better and still realizing that it’s not very good overall, reject both presidents as bad and vote for Mitt Romney.

What is actually important for voting in November is one’s relative confidence in Obama and Romney in the next four years. Unfortunately, this is exactly the sort of information that no voter has access to, mainly because we don’t really have any idea what either person will do if elected to the 2012-2016 presidential term. I mean, it’s shocking how little information is available to the average voter. Sure, one could look at Romney’s past policies, but how relevant are they to his presidency. And even Obama might try radically different policies depending on what Congress looks like.

The curse of American politics seems to be that voters are thrown irrelevant information because the information that would make a difference basically can’t be had.

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