On the Economy's Condition As Worse Than When Obama's Term Began, Mitt Romney Is (or Was) Right
On Friday, at its Political Hotsheet, Corbett B. Daly at CBS News, who joined the network in late May after leaving Reuters, appeared to virtually celebrate what he believes was the latest of Mitt Romney's flip-flops.
Though it's clear that Mr. Romney has flip-flopped in the past on a number of matters, it's hard to see how Daly or any of the other flip-flop scorekeepers has a case -- at least before Romney appeared to give in to the media meme.
Here is how Daly characterized it, complete with the presumption that what Romney has been saying on the campaign trail is "factually inaccurate":
Romney flip-flops on charges against Obama
Former Massachusetts Governor Mitt Romney on Thursday backtracked on a central theme of his presidential campaign: that President Obama has made a struggling U.S. economy even worse.
"I didn't say that things are worse," Romney said at a press conference in Allentown, Pennsylvania.
The comments came in response to a question from an NBC producer who asked the putative front-runner for the Republican nomination to explain his factually inaccurate statements on the campaign trail about the struggling U.S. economy.
During last month's Republican debate in New Hampshire, Romney said Mr. Obama "didn't create the recession, but he made it worse and longer."
... Economic growth is considered by economists to be the best overall measure of the economy's performance, and the data clearly show a fragile economy that was falling off a cliff a couple years ago. In the last three months of 2008, just before Mr. Obama took office, the U.S. economy contracted at a 6.8 percent annualized pace, according to the Commerce Department.
... And job growth, which is even more important for most voters, shows a similar story: weak but better than it was. The economy lost 820,000 jobs in January 2009 and continued to lose jobs every month through early 2010. Job creation in mid-2010 see-sawed between growth and loss until October, when there were 171,000 jobs created. The economy has added at least some jobs every month since, though just 54,000 jobs were added in May, the most recent month for which data is available.
Center-right blogger Ace makes two arguments about the economy. I agree with the first, but the facts refute the second:
- Did Obama make the recession worse than it otherwise would have been? Romney's answer, as well as every Republican's answer (pretty much) is "Yes."
- Is the economy currently worse than it was in January 2009, when Obama took office? His answer is "I didn't say that." It would be hard to make this case, and few do.
What no one -- Romney, Ace, or Daly -- seems to get is that whether something is "worse" depends on two snapshots -- One as of January 2009, and another based on the latest data available (March, May or June 2011) plus, where needed and when possible, short-period projections to sync everything to the end of June. The supposed trajectory of the economy at the time of those snapshots is totally irrelevant to the Better/Worse evaluation.
The two key components of the snapshot involve the employment situation and economic growth.
The employment situation can be broken down into three key elements: unemployment, the unemployment rate, and the number of jobholders. Here are the figures for each element, pending revisions (which, as shown in my column yesterday, are can reasonably be predicted to make 2010 and 2011 job-holding figures even further):
This is tough for media types to understand, so I'll lay it out, piece by piece (all figures are seasonally adjusted):
- The first table, the one with the red boxes, shows how many people weren't working, based on the monthly "Household Survey" done the the government's Bureau of Labor Statistics. As of January 2009, that number was 11.984 million. As of May 2011 (there is no June estimate, since forecasters typically don't predict this value), that number was 13.914 million. 1.93 million more people were unemployed in May 2011 than were unemployed in January 2009. Regardless of the upward or downward trajectory as of the respective time periods (and the number of unemployed increased in April and May), unemployment is 16% worse now (1.93 million divided by 11.984 million) than it was 29 months ago.
- The second table, the one with green boxes, shows the unemployment rate, which is also based on the Household Survey. As of January 2009, it was 7.8%. The current estimate for June, according to Forecasts.org, is that the rate will come in at 9.0% when BLS releases its official report for June on Friday, July 8. June's predicted unemployment rate is 1.2 points higher than the unemployment rate as of January 2009. By this second measurement, unemployment is 15% worse now (1.2 points divided by 7.8 points) than it was 29 months ago -- even before considering other alternative measurements; the so-called "U-6 unemployment rate" was 14.1% in January 2009, and 15.8% as of May 2011.
- The third table, the one with blue boxes, shows the number of employed based on the BLS's "Establishment Survey" of employers. As of January 2009, total employment was 133.563 million. The current estimate for June, again per Forecasts.org, is that the number will rise by 130,000 from May's to a total of 131.173 million in Friday's BLS report. June's predicted figure is 2.39 million, or 1.8%, lower than the number of people who were working in January 2009. If employment had actually grown in proportion to the civilian population in the past 2-1/2 years, 136.17 million would be working. 5 million fewer (3.96%) really are. Employment is worse now than it was 29 months ago. As demonstrated in my Pajamas Media column posted yesterday, the odds are pretty high that the figures from the past year or so will be revised further downward when the BLS releases its "comprehensive benchmark revision" early next year.
From all three different angles, it's indisputably clear that the employment situation is worse now than it was 29 months ago -- much worse. It is so far away from getting back to where it was in January 2009 that it's not even worth trying to guess how long it will take to get back to where it was in January 2009.
Now let's look at economic growth, which is Daly's primary argument. It's not that impressive, and in no way makes up for the far worse employment situation.
As seen below, including a rough estimate of 2% annualized GDP growth for the second quarter of 2011, real GDP is up by a bit less than 4% -- but per-capita GDP is only up by 2% (source data):
So, after considering civilian population growth, employment is a painful 4% worse. Also, after considering overall population growth, GDP is only 2% better. If you give each factor equal weight (why wouldn't you?), the economy is 2% worse almost 2-1/2 years after Barack Obama's term as president began. And this is all before considering the frightening and potentially economy-crippling debt overhang and unprecedented deficits as far as the eye can see that Obama's stimulus and other programs largely created, which would obviously move the meter even further in the "worse" direction.
What was that you were saying about "factually inaccurate," Corbett Daly?
Cross-posted at BizzyBlog.com.