Friday, July 06, 2012

Creators of Jobs Growth: Fact v. Fantasy

While critics of the Obama administration, pundits, and some economists point to weak job growth over the past 30 months as a failure of leadership, and lament the announcement that the Obama administration created only 80,000 jobs in June, no one is asking how about no job growth? That's right. How about no job growth at all!

A quick look at some numbers from the Bureau of Labor Statistics will show that for the first time since 1941, more than seventy years ago, the only time the average annual job growth rate was in the minus column was back in 2008 under another president, George W. Bush.

Oh, there you go again, you say, blaming Obama's predecessor for everything. Right you are, it was actually under another Bush, George H.W. Bush, that the average annual job growth rate fell from +2.53%, under Reagan, to +.69%, a problem Bill Clinton solved when, by the end of Clinton's first term, the average annual job growth rate rose to a whopping +2.60%. Yearly job growth under President Clinton surpassed all three terms of Ronald Reagan, as well as Jimmy Carter under whom annual job growth came in slightly lower at +2.30%.

Of course, the percentage of average yearly jobs created fell a full percentage point at the end of Clinton's second term to +1.60%, but George W. Bush managed, in 2004, to lower the annual job growth to +.51%. By the end of his second term, George W. Bush would see the average annual job growth rate drop to a seventy year record of -.84%.

That's right, for the first time since Franklin Delano Roosevelt, former President George W. Bush managed to take a positive growth rate and move it squarely into the minus column. Many of the economic policies and practices implemented by Bush, tax cuts for the rich, deregulation, loosening of environmental controls, subsidies for big oil, big pharmaceuticals, and outsourcing, the same product is now being sold with a new brand name: Mitt Romney.

Agreed, job creation under President Obama, from 2009 through the present, has been anemic, and comes in at an average annual rate of about +.75%, but forget the number that comes after the "+," and just focus on the +. For the first time since 2008, the average annual increase in job creation is in the plus territory.

Having read this, any reasonable person will want to also take a look at job growth under Mitt Romney, the presidential candidate who touts his experience as a job creator. Granted, when he took over the governorship of Massachusetts, Romney inherited a $3 billion deficit, the fact is that under his leadership the state's long term debt grew. As Media Matters reports, on Romney's watch, Massachusetts' "job growth was among the lowest in the country." While he was governor, Massachusetts gained only 1.3% in the category of non-farm workers at a time when the national average for states' job growth was 5.3%.

Romney may boast that unemployment declined when he held his first, and only, elected office, but the median income in Massachusetts actually fell, and Massachusetts went from being the 36th to 47th state in job creation.

Bottom line: there is no way to spin one's way out of the minus column. When President Obama took office, this country had experienced its first average annual job creation number in the minus column in over seventy years. The president took that minus and turned it into a plus, and while 80,000 jobs may be low job growth, it is undeniably job growth and not job loss.

If you have any questions about how many jobs were lost when he was chief executive of Bain Capital, just ask any of Mr. Romney's former employees.

If you have any questions about the efficacy of Governor Romney's economic policies, just look at his job approval rating when he left office in 2007. His job approval rating went from 61% in 2003, his first year in office, down to 34% in his last year, making Mitt Romney 48th in popularity out of 50 U.S. governors.

Massachusetts came in 47th out of 50 states in job creation, and Mitt Romney 48th in popularity out of 50 U.S. governors. It doesn't get any plainer than that. Numbers don't lie. They may change, but they don't lie.

We can no more afford the illusion of robust job creation than we can the reality of zero percent annual job growth. Slow but steady job growth may not be sexy, and may not result in landslide elections, but the alternative is to pitch tent in the minus column which is untenable, and unsustainable.

To put this in perspective, let's look at just one statistic. George W. Bush lowered taxes on the wealthiest Americans, what the Romney camp like to call "job creators," and the average annual job growth rate in 2008, Mr. Bush's last year in office, was about -.5%. Again, Bush was the first president in more than seventy years to produce annual job growth in the minus column. Mitt Romney has made it clear that he will continue what he likes to think of as tax incentives to "job creators," so we may expect Romney to create jobs like Bush did.

But, in the end, it isn't just about creating jobs. Mr. Romney's claim that he is the kind of economic Houdini this country needs now is not credible. A Romney presidency will doubtless result in a deficit of credibility, one that is more dangerous than any budget deficit we now face. Oh, and how does the saying go, those who forget the past are condemned to repeat it.