There is no vice so mean, so pitiful, so contemptible; and he who permits himself to tell a lie once, finds it much easier to do it a second and a third time, till at length it becomes habitual; he tells lies without attending to it, and truths without the world’s believing him. This falsehood of the tongue leads to that of the heart, and in time depraves all its good disposition. –Thomas Jefferson
The jobs report came out last Friday and showed that we are still suffering the worst recovery since World War II. Can we believe this report? In a few weeks we can. Two weeks after the official reporting for April, the government revised the numbers down and increased the unemployment rate. Also in April, the government initially reported that applications for new unemployment benefits had fallen to a four-year low. Later, the number was revised to show an increase of 4,000. Dow Jones reports that the Labor Department has revised upward its first estimate of new claims in 57 of the past 58 weeks. First quarter economic growth was also revised down from a sluggish 2.2% to an anemic 1.9%. Of course revisions have always occurred. Except under prior administrations, revisions went in both directions.
Government-reported economic statistics are closely watched by politicians, financiers, and businesspeople. In this economic environment, the first numbers generate headlines. They move stock and bond markets. They move President Obama’s approval ratings. They affect future activity—economic and political. Later revisions are pretty much ignored.
Initial unemployment claims remain high and job growth is so tepid it cannot keep up with the natural growth in population, yet the unemployment rate seems stuck around 8%. When asked for an explanation, the government says people have left the job market. Excuse me, but if someone leaves the job market involuntarily, then they should be counted as unemployed. In fact they are, but by a different measure. It’s called the Labor Force Participation Rate. This is a measurement of the proportion of the adult population that is gainfully employed. This chart shows this measurement as calculated by the Bureau of Labor Statistics.
In Golden Valley, Minnesota, Obama recently repeated his refrain that, “We are still fighting our way back from the worst economic crisis since the Great Depression.” Except this excuse is nonsense—the more severe the downturn, the more robust the recovery. Obama should have the wind at his back. Rapid recovery has been true throughout our history except under the first two terms of Franklin Roosevelt. Roosevelt followed the same policies of bashing business, raising taxes, restricting trade, and trying to goose the economy up by pouring borrowed money into the public sector. It didn’t work then and it is not working now.
The economy is bad, and no amount of dissembling will change facts. President Obama may not have got us into this nice mess, but he is responsible for obstructing our recovery. I doubt he has the necessary moral beliefs to reset the course of the nation. As Thomas Jefferson wrote, “falsehood of the tongue leads to that of the heart.” Getting us out of this mess will first require a president who admits we are in a mess.
At the risk of sounding like Chancy Gardener from the movie Being There, the economy is like nature. Economies flourish, and then get overgrown with excesses, fraud, and inefficiencies. In nature, autumn and winter and an occasional wild fire get rid of the overgrowth that’s holding back more productive growth. Spring brings a fresh beginning with brisk growth. Some winters are worse than others, but they bring more vibrancy when the weather finally turns. Hopefully, we’ll see a change in our weather next spring.
James D. Best is the author of the Steve Dancy Tales and Tempest at Dawn, a novel about the 1787 Constitutional Convention. Look for his new book, Principled Action, Lessons from the Origins of the American Republic.