Unemployed, and Skewing the Picture

From the New York Times courtesy of FAIR:

This month's jobs report is a great example of how misleading the unemployment rate can be. In February, the economy shed 63,000 jobs, which is a strong indication a recession may be at hand. But the unemployment rate actually fell, to 4.8 percent from 4.9 percent.

How could this be?

The government's definition of the unemployed includes only those people actively looking for work. And last month, the number of people in that category fell significantly. It seems that more of the jobless gave up looking for work. So the unofficial number of unemployed fell, even as the labor market worsened.

Click here for the rest.

Right, so that means any public discourse about unemployment we have is simply not based in reality. That is, economists themselves are aware of how these numbers are compiled, politicians too, but the political discussion is as though the unemployment rate represents actual numbers of American adults who don't have jobs. This makes the economic outlook for average citizens appear to be much better than it actually is.

Really, when you get right down to it, all public discourse in the US plays fast and loose with economic ideas in this way. Uber-blogger Atrios, who is himself an economist, has asserted that politicians, when talking about the economy, tend to stay at the level of a macro economics 101 college course. I wish that was true. The macro economics 101 course I took at the University of Texas was intellectually stimulating, and it was taught by a follower of economist-as-Satan Milton Friedman--come to think of it, my high school economics course, in hindsight, wasn't half bad either. You know, basic facts about supply and demand, how taxes and interest rates affect the overall economy, money supply, that sort of thing.

But man, listening to politicians talk economics is like listening to Charismatic Christians speaking in tongues. That is, it doesn't often make much sense. For instance, there is a persistent belief among the political class that if the economy is growing, Americans are doing better: that's demonstrably not true; since the 1970s a middle class lifestyle has required a double income, which it had not required before, despite the fact that the overall US GDP is larger than it was in the 70s. Now we're in danger of losing the middle class entirely.

Or consider this. Politicians talk about jobs, jobs, jobs, and the best ways to create them. But they never talk about capitalism's dirty little secret, that there can never be full employment, or capitalism will collapse, or that the closer we come to full employment, the more unstable capitalism becomes. Here's why. Full employment means workers can always get a better job elsewhere; it's supply and demand in the labor market: a tight supply in the face of high demand means prices, in this case wages, necessarily will go up. That cuts into business profits, having to pay a larger share of created wealth to the people who actually create it, the workers. Full employment means the rich aren't nearly so rich, profit motive evaporates, and capitalism dies. Conversely, when more people are unemployed, businesses can pay lower wages, and pocket a great deal more. The ruling elite may give lip service to everybody working, but they don't really mean it. They want huge percentages of the population to be out of work so they can fleece those of us lucky enough to have jobs.

Then there's the myth of tax cuts stimulating the economy enough to generate more tax revenue than was generated before the cuts were enacted. Sure, some very specific kinds of tax cuts will do this in some situations, but not like what the GOP offers, tax cuts all the time always, especially for the rich.

Anyway, I'm sure you get the idea. There's a lot of bullshit in American public discussion about economics. And that bullshit almost always favors the wealthy in the long run. It just figures, doesn't it?

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