Libya and the democracy movement in the Arab world have sucked much of the oxygen from the political air. President Obama, after deciding to intervene against Muammar Qaddafi, returned to campaign mode. He boasted on April 1 that the decline in the unemployment rate to 8.8 percent meant that it dropped 1 percent in the last four months. He added that this was the largest four-month decline since 1984. One can understand why the president pointed to 1984, hoping that employment gains will produce a victory in 2012 as it did for Reagan in that year. Do not be fooled. The president?s advisers cherry-picked the numbers.
During the first six quarters of Reagan?s post-recession years, the economy gained 4.2 million jobs; in the comparable period during the Obama years, the economy lost 264,000 jobs. In 1984 the economy grew at 6.6 percent. There?s no chance of that in 2011 or 2012, the way things are going. The president failed to report that weekly average hours in 2011 stayed the same at 34.3 while in the Reagan period they increased by 3.7 hours to 41.2. (Rising hours is a sign that employment gains will follow.) Also, wages were stable in 2011 while they rose in the equivalent period in 1984. Finally, adding those who do not have a full-time job and blame that on the economy yields an unemployment rate of 15.7 percent. One in six people in America want to work full-time but cannot find a job. Still, the breathless Washington Post found that the additional 216,000 jobs were ?promising signs that the recovery is building momentum.?
My point is not to praise Reagan, who achieved growth by boosting consumption not investment, borrowing not investing, and trading well-paid manufacturing jobs for ill-paid service ones. (On the other hand, the jobs that the Obama administration is touting have been lower-paying than the ones that have ended. The National Employment Law Project found that jobs in lower-wage industries, such as retail and food preparation, made up 23 percent of the jobs lost in the recent recession. However, they make up 49 percent of the jobs that the economy has gained in the last year. Only 14 percent were in so-called higher-wage industries.)
Reporters, as well as the president, have forgotten what a good economy is and how government can improve it. Let us remember: in 1968 the National Association of Manufacturers preferred Richard Nixon to Hubert Humphrey, but not by much. It concluded, ?If unemployment reached 4 percent, Humphrey would be willing to attempt almost anything to check the decline?Nixon would attain the same frame of mind at 4½ percent.? I am not invoking Nixon nostalgia any more than Reagan nostalgia. But the self-satisfaction of the political class and the press with 8.8 or 15.7 percent unemployment is offensive.