Obamanomics II

More on Unemployment

Since the last post I’ve gotten more information and an explanation from the Obama Administration for why their unemployment forecast was so wrong.

The administration claims, as I noted last time, that the forecast was wrong because they didn’t realize how bad the economy was. I regarded that as silly because I had not read an explanation of what they did not know. Now I have. The claim is, if I understand it, that after the forecast was made, the unemployment and other economic numbers were revised (worse) and so their forecast was overly optimistic.

Since I don’t know their mathematical model and how sensitive that model was to the initial unemployment and other numbers I guess I can’t, with certainty,  say that their hypothesis failed. But I don’t recall a correction being made a month or two after the original forecast that predicted a larger unemployment number.

In fact, both the Administration and the media have been touting our economic recovery for months and months, telling us how we’ve rounded the corner and how it’s only a matter of time now till happy days are here again. So, in my gut, I believe that they didn’t think they needed to revise their forecast based on that new information but kept feeding us a rosy outlook instead. I’m saying I don’t buy their story.

Recently, April 10th, Investor’s Business Daily published an editorial on unemployment. Here are some excerpts.

1) “Today, a record 100.5 million Americans older than 16 don’t have jobs, up 34% since 2000.”

2) “If we were to have the same jobs-to-population ratio as 12 years ago, there would have to be 14.6 million more jobs, or 22.6 million fewer people.”

3) “…this remains the worst jobs recovery since the [Great] Depression.”

4) “…U-5 … includes not just the unemployed, but discouraged workers and those “marginally attached” to the labor force…That unemployment, in contrast to the official government rate of 8.2%, is more like 9.6%.”

5) “…Gallup also does its own jobs survey each month. Its ‘underemployment rate’ — made up of those without jobs and those working part-time but who want full-time work — now stands at 18%.”

The media and the Obama Administration keep telling us we are in a recovery and the economy would be better if it were not for George Bush “driving us into a ditch.” That statement might be believable if we didn’t have access to the numbers. Moreover, those of us who accept free-market principles and the axioms of neo-classical economics are not surprised that the Obama solutions such as stimulus, bail outs, threatened tax increases and central planning in general, do not work and are, in fact counterproductive.

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