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More jobs might be created this year than during George W. Bush's presidency

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« on: May 14, 2010, 03:09:50 pm »

Repairing The Job Machine
More jobs might be created this year than during George W. Bush's presidency.
by Ronald Brownstein

Saturday, May 15, 2010

If the economy produces jobs over the next eight months at the same pace as it did over the past four months, the nation will have created more jobs in 2010 alone than it did over the entire eight years of George W. Bush's presidency.

That comparison comes with many footnotes and asterisks. But it shows how the economic debate between the parties could look very different over time -- perhaps by November, more likely by 2012. More important, the comparison underscores the urgency of repairing an American job-creation machine that was sputtering long before the 2008 financial meltdown.

First, the numbers: From February 2001, Bush's first full month in office, through January 2009, his last, total U.S. nonfarm employment grew from 132.5 million to 133.5 million, according to the Bureau of Labor Statistics. That's an increase, obviously, of just 1 million. From January through April of this year, the economy created 573,000 jobs. Over a full year, that projects to 1.72 million jobs. Job-creation numbers are notoriously volatile, so the actual result could run above or below that estimate. But Obama administration economists are increasingly optimistic that job growth this year will exceed expectations. Few of them will be surprised if more jobs are created in 2010 than over Bush's two terms.

Now the principal footnote: To compare job growth in 2010 with Bush's record ignores the nearly 4 million jobs lost in Obama's first year, during the freefall that began in Bush's final months. That's like ignoring a meteor strike. Over time, voters are likely to judge Obama by his degree of success in eliminating that deficit and reducing unemployment. Still, if the economy this year produces more than 1 million jobs -- or, conceivably, more than 2 million -- that will give Democrats more ammunition to argue that their agenda has started to turn the tide.

The real point of looking again at Bush's record is to underscore how few jobs the economy was creating even before the 2008 collapse. Bush's tally of 1 million jobs was much less than the economy had generated during any other two-term stretch since World War II: Dwight Eisenhower produced nearly 4 million, John Kennedy and Lyndon Johnson (together) almost 16 million, Richard Nixon and Gerald Ford (together) 11 million, Ronald Reagan 16 million, and Bill Clinton more than 22 million.

Bush's total, of course, was suppressed by the slowdown he inherited from Clinton and the full-scale meltdown during his last year. But even during the recovery in between, job growth lagged. In only eight of Bush's 96 months did the economy create as many jobs as the 290,000 it did last month. Clinton exceeded that level 33 times. Reagan exceeded it 24. In all, the economy gained about 1.2 million jobs annually during the six years of recovery under Bush. It averaged about twice that during the expansion from March 1991 to February 2001.

This record suggests two conclusions. One is that there's no evidence to support the argument from congressional Republicans that tax cuts offer a silver bullet for expanding employment. Job growth boomed after Reagan cut taxes, but expanded even faster after Clinton raised them, and then faltered despite two massive tax cuts under Bush. If tax rates are the critical factor in that record, the relationship is well disguised.

The other point is that even optimistic scenarios suggest a sustained period of uncomfortably high joblessness. The economy lost more jobs during 2008 and 2009 than it gained throughout the Bush recovery. Obama administration officials see positive signs of the economy's reaching what one called "escape velocity," but acknowledge a long tough climb, even under relatively hopeful projections, to recreate the jobs vaporized by the recession. It is possible that the economy could experience a full decade without any sustained period matching the rapid job growth of the late 1990s. Obama himself has privately described long-term unemployment as his greatest domestic concern.

Although the immediate jobs picture is clearly brightening, lasting surges in U.S. job growth usually have followed technological breakthroughs (the personal computer, the Internet) or expanded access to education (mass primary schooling in the late 19th century and increased access to college after World War II). Obama is betting heavily on both fronts, with big increases in federal investment in education and new technologies, such as alternative energy. But the engine that will propel the next great burst of American job creation has yet to be discovered.
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