July 31, 2010
Obama’s ‘Right Track’ Runs to Deep Jobs Hole
By Donald G. Mashburn
Among the steady stream of words coming from President Barack Obama, when he talks about jobs, one hears repeatedly the claim, “We’re on the right track.” He especially likes to repeat the mantra when speaking to groups like the United Auto Workers, who got bailed out with billions in taxpayer dollars for General Motors and Chrysler.
It’s hard to tell if he’s knowingly not telling the truth, or is just such a true believer in bigger and bigger government he doesn’t recognize that the Labor Department’s own data show we’re in what Investor’s Business Daily calls the “deepest job recession of out time.”
In its July 15 issue, IBD published a striking chart showing Nonfarm Payroll as Percent of Prior Peak versus Months After Peak Employment. The chart is based on data from the Labor Department, Datastream and CalculatedRiskBlog.com.
The chart shows in graphic form, for 10 recessions going back to 1953, “how long it has taken the economy to return to its prior employment peak.” The current recession, labeled the 2007 recession, shows that this recession dipped to about minus 6.0 percent in nonfarm payrolls about 23 months after peak employment, then three months later reached its low point of about minus 6.1 percent. From there, it was nearly flat for about two more months, then rose to only about minus 5.8 percent over the last eight-month period, of the total 31 months depicted.
The next deepest payroll decline was during the 1957 recession, when nonfarm payrolls dipped to about 4.4 percent. By comparison, the 1980 recession reached a low point of about 1.3 percent, and that was only three months after peak employment.
Only one of the 10 recessions reached its low (of only minus 2.3 percent) point later (beyond 27 months) than did the 2007 recession. None of the other nine recessions lost a greater percentage of nonfarm payrolls, and only one took longer to reach its low point (of a much more modest loss in nonfarm payrolls).
More strikingly, all but two of the other nine recessions had already recovered and had reached positive (plus) territory in nonfarm payroll growth when compared to the 2007 recession which, 31 months later, is still struggling along at a minus 5.8 percent deficit in nonfarm payrolls as a percent of prior peak.
So when President Obama claims “We’re on the right track,” he either isn’t telling it to us straight, or his advisors are keeping the real data from him.
Either way, his “right track” seems to have run into the biggest job hole yet, even after record billions in stimulus money (taxpayer dollars) and trillions of additional debt!
There seems to be no “right track” in a leftist-run economy.