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ThePlumLIneGS whorunsgov plumline
Posted at 11:06 AM ET, 08/03/2012

A reality check about today’s jobs numbers

The status quo is not okay. But today’s jobs numbers, having been better than expected, may only serve as an incentive for further inaction. Ed Kilgore comments:

The jobs number, which came in well above the consensus prediction of 100k, is the best since February. It greatly diminishes the credibility of widespread Republican cheerleading for a double-dip recession prior to the election. But the stubbornly high unemployment rate, with which Americans are far more familiar than with job growth or GDP statistics, remains a big problem for Obama.
I would also guess that the better-than-expected jobs numbers will give the Fed the excuse it wants to do nothing to further stimulate the economy. That could matter much more than these numbers in the long run, don’t expect much of anyone to raise their eyes from the next two steps down the road between now and November.

Noam Scheiber has more:

There’s no hint of acceleration in the rate at which we’re creating jobs, in other words, but no indication the bottom is about to fall out either. One-hundred and fifty thousand is kind of what we do these days.
That’s probably mildly encouraging if you’re rooting for Barack Obama, since moderate job-growth gives him a decent chance at re-election. But it’s pretty discouraging if you’re rooting for something resembling normalcy, since at this rate it’s going to take well into the next decade to get unemployment back to a healthy 5-6 percent rate....
Or, put somewhat differently: The country may well settle for two years of 150,000 new jobs per month in the aftermath of the worst recession and financial crisis in 80 years. But it won’t (and shouldn’t) settle for five years of barely adding new jobs each month. And yet, given the trend-line that’s coming into focus, that’s where we seem to be headed.

Part of the problem is that we tend to analyze the economic news through the prism of the presidential race, rather than as a window on to a genuine humanitarian crisis that has inflicted years of suffering on millions and millions of Americans. (Don Peck’s excellent book documents the extent to which mass unemployment, and the wrenching changes that are occuring in the wake of the Great Recession, are taking a severe social, cultural, and psychological toll on those who have been hit hardest by it.) And so, if the jobs numbers are above 150,000 — the benchmark set by many analysts — that’s seen by Obama partisans as “good news.” If they are below that, or below 100,000, it’s “bad news” for Obama. What’s lost in this calculus is that both outcomes continue to represent a status quo that’s unacceptable.

The tendency to look at the jobs numbers through a political prism also has negative consequences in another way. We’ve basically come to accept that the political impasse over what should be done to fix the crisis is not resolvable. As a result, we are telling ourselves that the coming election will break the “stalemate,” as Obama has repeatedly put it. And so we’ve persuaded ourselves that action may be right around the corner. But action may not be right around the corner at all, even if Obama wins. Congress may remain divided. More broadly, even though Democrats have proposed ideas to fix the short term crisis that economists say would work, while Republicans haven’t, elites in both parties seem to be conditioning themselves to a political dynamic in which the American public has essentially given up on the idea that a president and Congress can act to fix the economy.

That’s admittedly a pretty big generalization, and I hope I’m wrong about it. But if today’s jobs numbers have defied expectations, what does that say about what’s become of our expectations?

By  |  11:06 AM ET, 08/03/2012

 
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