Obama jobs recovery well underway

A fact plainly in evidence, to anyone willing to look at the data.

It seems that everyone, Right or Left, is critical of Obama’s programs to reverse the massive jobs losses that resulted from the past 30 years of specious economic policy, most of it driven by Republicans. But the evidence is now clear that Obama’s policies are working, and the regressive Republican pattern has been reversed. It will take some time to gain full reversal, no set of policies can overcome three decades of institutionalized economic mismanagement in just a year, but we are well on the way and for that Obama and other Democratic leaders deserve substantial credit and support.

The enormity of the challenge cannot be glossed over. There are many charts showing the dramatic loss of jobs associated with the Great Bush Recession, but this one from Brad DeLong is especially instructive because it is paired with another of his showing what is called variance. What these two spikes, one sharply down and the other sharply up, tell us is that this recession-driven jobs loss is both massive and unprecedented.

employment to population ratio and variance
[Both graphs slightly manipulated to bring their abscissae into alignment.]

Reversing this employment drop is an enormous and extraordinary challenge, unlike anything seen since the Great Depression. In fact, because the actions available to government are much more limited now than then by regulatory restrictions and because the basic economic conditions favoring growth are now more constrained due to the record high level of personal credit debt, the challenge is greater than in any time past. As many have pointed out, this recovery will therefore likely be slower in terms of job growth than earlier downturns.

But the administration’s policies, dominantly the 2009 stimulus legislation, have indeed begun to have a positive effect. While looking just at the aggregate employment statistics as compiled by Arun, the sharpness of employment decrease is again striking for both men and women

employment population ratio m/f exploded

while a closer look at the most recent data in Arun’s plot shows that employment ratios for both men and women are now trending upwards, as seen by the upticks visible in the exploded box.

A more refined set of data, looking at net jobs lost and created based on payroll reports,

employment level bush obama 2008 to 2010

clearly demonstrates that what were rapidly increasing rates of job loss across all non-farm employment sectors under Bush have now been reversed by Obama. While the construction and financial sectors are still losing jobs on net, albeit at a much slower rate, the rest of the economy is now adding more jobs than are being lost. Since the two dominant components of the BushBubble were exactly excess housing value and funny-money finance, those sectors will likely be slower to recover than others. None the less, they are on an upward path along with the jobs picture as a whole.

Compiling those sectors together, it is clear that what had been a near freefall under Bush has not only stopped under Obama but actually been reversed:

jobs bush obama 2008 to 2010

The 2009 stimulus bill certainly should have been larger. It was, however constrained in size and scope by lock-step Republican obstructionism and the BlueDog Democrat’s nearly as obstinate regressive behavior, neither of which are Obama’s fault or the fault of others in the Democratic leadership. In retrospect, however, it is now plain that the real limitation in the bill’s short-term effectiveness was the number of projects that could be immediately undertaken. The regulatory reviews holding up most newly funded projects are just now being overcome, and the remainder of unspent funding in that stimulus bill can now begin to take effect.

With job growth still sluggish and employment remaining high, a second jobs stimulus bill is needed and Obama has proposed one of $150+ Billion that the House has passed. It is, however, again being obstructed by Republicans and BlueDogs in the Senate and likely will die there. Obama and Reid have countered with a series of smaller bills, each of which will try and incorporate what are essentially bribes to try and entice a couple of Republicans to get on board but the effectiveness of this strategy is at best uncertain.

Those who know their US history will recognize this pattern of obstruction from the Right, the same one that hamstrung FDR’s attempts at economic recovery and prolonged that era’s employment depression for nearly a decade. The obstructionism then wasn’t FDR’s fault, and blame for this modern version does not belong on Obama either.

But Obama anticipated these regressive actions by Republicans and BlueDogs in his new omnibus budget proposal, which includes $266 billion in jobs growth funding scattered in bits and pieces throughout. It will be difficult, if not impossible, for reactionary forces to pick them out, because they are structured in such a way that most of the funding will become entangled with funds headed toward districts and states represented by Republicans and BlueDogs. If they excise the funding, they remove the kinds of take-home projects and financial support they depend on to curry favor with their own constituents. Very clever, that.

Looking long-term, it becomes even clearer that Obama’s economic plans are the complete opposite of Bush and other Republican presidents. A review by the non-partisan Tax Foundation shows that carried on through as proposed, Obama’s economic initiatives will reverse the now decades-long trend towards concentration of income and wealth at the very top. As has been the case with other Democratic administrations, Obama’s policies will increase the percentage of income flowing towards the middle-class and the poor while reducing the relative share of net income for the very wealthy.

gross income distribution by presidency 1948_2005 Bartels
[It is this trend in greater economic opportunity equitability that keeps me voting Democratic, as well as the sustained uniform bigotry of the Republicans.]

Obama’s economic policies are in fact progressive, and Progressives ought to embrace them rather than incessantly carping because they are not sufficiently radical. Obama would certainly be more aggressive if he could, but he is obstructed by Republicans and BlueDogs in Congress, the branch of our government that has control of the budgetary pursestrings. All unhappiness from the Left should be pointed in their direction, unmercifully.

Beating on Obama and Reid and Pelosi for not being dictators or miracle workers on economic policy is both unfounded and counterproductive, and should stop. They are in fact doing as much as the current system of government will allow them to do, and certainly being effective in a positive way. In this arena at least, they are due far more praise than criticism.

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4 responses to “Obama jobs recovery well underway

  1. no set of policies can overcome three decades of institutionalized economic mismanagement in just a year,

    tax the living daylights out of the rich and and the corporations and use that money to hire people to move rocks in the grand canyon, paint murals in post offices, teach poetry in schools, ….

    the fdr administration created in less than a year what would be the equivalent of about 10 million jobs today. given that we’ve lost a total of about 8.4 million jobs in this recession, that kind of performance would not only reverse the bush-induced recession, but also make a down payment on reversing the rest of the damage inflicted by the republicans over the past several decades.

    a lot of the wpa/ccc jobs created by the fdr administration have been derided as make-work, but we’re pretty much in an economy where a lot of the jobs are going to have to be make-work. either that, or pay people the equivalent of a living wage to stay home and watch tv [or blog!].

    • blacksheepone

      I agree that jobs are needed. I do think that we need to create jobs that leave behind worthwhile products.
      I could deal with going back to brick roadways — yes, they’re labor-intensive. So? They use no asphalt or petroleum products.
      Mud can be baked into brick on most sites in the USA. We need to get off oil as much as possible, no?

      The other thing I want to see us do is bring back art, like the murals, in public spaces. I’ve seen some WPA-decorated
      post offices (Big Spring turned theirs into the city /county library a few years back; the murals are breathtaking!) and
      some WPA-work in 1930s public schools (a terazzo surround for drinking fountains in Lubbock High School’s main hall,
      for example) and the worth of the work can’t be denied. It just makes the place look so much less ‘institutional’ and
      ‘prison-like’.

      There are millions of square feet of abandoned buildings in small towns in the US. Having gangs of government workers
      rehab them or tear them down to create space for community gardens / parks would be a good use of excess labor and
      would also provide reusable building materials to create things like libraries, community centers, expanded schools (imagine
      getting kids out of ‘portables’ all over Texas!, just as one example) and hospitals or rehab centers. Reduce, reuse, recycle,
      rework, rehab. Create better insulated buildings. Create more solar-powered public offices, like the tiny little town of Lorenzo
      in Crosby County is doing.

  2. grahamfirchlis

    Ah, hipparchia, if it were only that easy. But it isn’t, and it wasn’t for FDR either.

    The “created a bunch of jobs the first year” meme refers to the CWA program that spent hugely but only lasted five months. A lot of people were employed, 4 million, but only briefly. When that shut down, the CCC and PWA programs picked up some of the slack but unemployment remained very high, in the mid-20s.

    Eventually, two years into his term, the WPA was born and employment levels began to marginally improve. Unemployment under FDR remained higher than it is today until the start of WWII.

    Obama, Reid and Pelosi proposed a $1.3 Trillion stimulus bill. With the Republicans in lock-step opposition they had to negotiate with the BlueDogs for passage and that reduced the total to $750Billion, watered down with tax breaks. That the final bill was smaller than needed can’t be blamed on O+R+P; blame the Rs and the BDs.

    But even if it were larger, it wouldn’t have had any more of an immediate effect. That is because now, unlike in the Thirties, we have lots of (good, proper) laws that regulate almost all of the projects you suggest. Planning requirements at city and county and, in CA, state level; Enviro impact, OSHA and EEOC compliance studies and documentation; multiple public review periods, challenge provisions, and lawsuits can all substantially inhibit how quickly money can be spent, and there is no mechanism for Obama or congress or the states to sidestep them. It can take anywhere from a year to three years to get even minor public works programs actually started.

    What FDR did about unemployment, which was dramatic but still only marginally effective at best, simply cannot be done today in the same amount of time.

    Well, except for funding the poets and artists, that could be done immediately. D’ya think Congress would pass a bill to employ 10 million artists, poets, writers, dancers and sculptors? No, neither do I.

    You and I would like to see more being done. So would Obama, Reid and Pelosi. Tell me how – repeat, how – that can be made to happen.

  3. Pingback: Obama jobs recovery well underway « Graham Firchlis has a blog

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