Friday, October 3, 2008

Job creation, 1993-2008: Three comments

Job creation, one month net change, 1993-2008. Source:

Jobs, Jobs, Jobs

According to government statistics, the Bush Administration has governed over 34 months in which the country lost a net number of jobs, including the last nine months in a row. In contrast the Clinton Adminstration governed over just six negative job months, and never two in a row. So far in 2008, the country has lost 760,000 thousand jobs. Soon it will become recognized knowledge that Bush was a bad 'jobs' president. Three comments:

1. Is it a fair characterization? Probably not entirely. For one, it could be argued that Pres. Clinton enjoyed sociological conditions particularly conducive to economic growth, and Bush the opposite. 'Globalization' -- the interdependence of nation-states and the emergence of supra-national organizations -- was a positive force for the US economy in the 1990s, and I would argue it no longer is. In the 1990s, the ability of capital to move freely around the world helped keep labor costs low while financing low consumer prices. Today we still have globalization, but the returns are diminishing. In particular, as developing countries develop and gain significant measures of wealth, we have begun to face a world of upward wage and price pressure. In sum, global relations must be taken into consideration when explaining recent US economic outcomes. It is not fair to explain the bad performance simply by saying 'Bush.'

2. That said, the Obama campaign could ceize for his gain this two-decade long relationship between party and job creation. To do so Sen. Obama must find a way to make unemployment and job creation data central to how American voters (and many non-voters) experience this election. Clearly, he and the Democratic Party are trying to use the economy to their benefit. In fact, in a beautiful twist, a fateful meeting of interests between the Democratic Party (who benefit from the public perception that there is an economic crisis this large) and George W. Bush (who is saved from going from bad on the economy to Hoover-bad) goes a long way to explain the passage of the bailout bill. But if Sen. Obama is to win decisively, he could make clear that the crisis facing Americans is not just about 'credit' but also about jobs. Greater numbers of voters will see their key economic experience in the notion of a job rather than credit. Credit is important to most, but to most not as important as their job. He should talk about jobs, and make sure everyone knows the data.

3. On the flipside, the biggest disadvantage facing McCain is that he is structurally prevented from taking advantage of the bad economy. He wants to be a maverick and a populist, but he can't because he can't have the economics issue. Perhaps what he should have done, when he had the chance, was bet his candidacy on opposition to the 'Bailout.' He could have been the anti-Bush populist. Risky, because what if Warren Buffett's 'economic pearl-harbor' rhetoric was based in truth? He can't be on the hook for that. Plus, the last two men who ran as anti-Bush populists -- Al Gore and John Kerry -- lost.

Sen. McCain comes off to me as a frustrated man. I think I understand why.

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