August 2, 2013

I finally get what Obama's recovery summer is all about

Year after year the president has been able to spin that the unemployment rate has been slowly but surely falling.  The latest jobs report indicates that the unemployment rate has fallen from 7.6% to 7.4%.  Obama's plans must be working, right?  Well yes, if his plan is to reduce unemployment by having everyone leave the job force.
The labor participation rate had become startlingly anemic during the recession, and at those lower rates, it's easier to hide a bad recovery.  People are no longer looking for jobs and are therefore not counted, as this graph indicates.
After the recession inherited by president Reagan, and the double dip, labor force participation rate climbed dramatically for the remainder of the decade after 1983.  Don't be fooled into thinking that we are talking a couple of percentage points and these differences are small - a few points represents millions of job seekers. 
After the mild recession of 1990, the labor force participation rate took off again after roughly 1994.  After the 2001 recession, the recovery was more mild but it was a recovery nonetheless.  But look at the non-recovery post 2008.  There is no recovery in labor force participation rate.  Millions of people are no longer actively seeking jobs. 
And I finally get what Obama's recovery summer (version what, 5?) is all about.  It's about playing with the denominator in the equation to make the numbers look better and make people feel better about the nation - even as  their own circumstances inform them otherwise.  Don't believe your own eyes and own circumstances people, Obama says everything is going well as he pivots once again, back to the economy...
Sure he will be touting this latest reduction of the unemployment rate as a success.  And the media will lap it up.  But it is only a success if the objective is to have everyone leave the workforce.  Then he is succeeding admirably.  Wait until the stalled mandates for Obamacare kick in.  We'll be pining for the days of 58% labor force participation rate.  With an aging population and a soaring national debt, we're going to need a lot better labor force participation rate than low to mid -60's anyway.  But that's not going to happen under this president, ever.  He had his shot with his $787 billion stimulus that may be the biggest waste of money in history until the end of time. He had his shot, he blew it. All that is left for this president is to keep hiding the mess. That's his recovery summer.

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