More economic recovery:

[underlankers.livejournal.com]

http://www.bbc.co.uk/news/business-12648347

 

The US unemployment rate fell slightly to 8.9% in February, down from 9% the month before.

It is the third month in a row that the jobless rate has fallen, with February's figure marking a near two-year low.

Employers added 192,000 jobs last month, the US Labor Department said, above market expectations.

Paul O'Neill, former US Treasury Secretary, described the data as "very positive".

A Labor Department statement said that most job gains were in manufacturing, construction, business services and transport.

State and local government slashed 30,000 jobs, the most since November as budget cuts continue to bite.

The data showed that the jobless rate for adult men was 8.7%, for adult women 8%, and for teenagers 23.9%.

The unemployment rate has come down from 9.8% in November.

____________________

I'll be the first to admit that this is not what the Obama Administration predicted or really wanted when they wanted unemployment to stay where it was when they were inaugurated. However looking at this, the unemployment figures appear to be showing more, and more effective, growth since the Administration's stimulus package has gone into effect. It makes me curious in fact whether or not a larger stimulus package would have had more effect. What do you guys think?

Comments

[nevermind6794.livejournal.com]

The "stimulate" crowd predicted that too. Remember that Romer asked for a $2 trillion stimulus, and Krugman criticized the stimulus as far too small from day one.

But we know there is a cost because economists study it. (http://en.wikipedia.org/wiki/Output_gap) Of course, the question then becomes whether that cost should be looked at as an investment in getting the economy re-aligned properly, or if it is a loss to be minimized with government action.

[badlydrawnjeff.livejournal.com]

The "stimulate" crowd predicted that too. Remember that Romer asked for a $2 trillion stimulus, and Krugman criticized the stimulus as far too small from day one.

No, from day one (http://krugman.blogs.nytimes.com/2008/11/10/stimulus-math-wonkish/), Krugman calculated far, far less. He started talking more only when Obama actually ran with numbers closer to what he came up with, and still complained (http://krugman.blogs.nytimes.com/2009/01/06/stimulus-arithmetic-wonkish-but-important/). In other words, who gives a flying fuck what Krugman thinks?

But we know there is a cost because economists study it. Of course, the question then becomes whether that cost should be looked at as an investment in getting the economy re-aligned properly, or if it is a loss to be minimized with government action.

Yes, we know that economists study things. You've completely ignored, however, the cost of doing something making things worse, which is what stimulus historically does in practice. The multipliers look great in theory, but we need to stop concerning ourselves so much with the theory and start concerning ourselves with the reality.

[nevermind6794.livejournal.com]

His (very cursory) estimate explicitly relied on the level of unemployment. Of course it was low when unemployment was only expected to get to 8.5%. What matters is the stimulus per percentage point of unemployment (the Okun's law thing), which was higher than Obama's.

Your historical revisionism regarding stimulus is a non-sequitur. Your original complaint was about how we knew there was a cost to inaction, which is what I showed you.

[badlydrawnjeff.livejournal.com]

His (very cursory) estimate explicitly relied on the level of unemployment. Of course it was low when unemployment was only expected to get to 8.5%. What matters is the stimulus per percentage point of unemployment (the Okun's law thing), which was higher than Obama's.

That Krugman fails to see the relationship is not something I'm able to fix.

Your historical revisionism regarding stimulus is a non-sequitur. Your original complaint was about how we knew there was a cost to inaction, which is what I showed you.

No, my original complaint was that the "cost to inaction" was entirely fabricated. Inaction was, in retrospect, the better choice.

[nevermind6794.livejournal.com]

So you're saying there is no such thing as natural GDP, or an output gap? That's an odd argument to make.

[badlydrawnjeff.livejournal.com]

I don't know why you'd think I believe that. I'm saying that, historically speaking, government has done a terrible job trying to address those things, and, in some cases, have actively made them worse.

[nevermind6794.livejournal.com]

But that has nothing to do with what I'm talking about. I was just saying that there is a cost to inaction, as illustrated by an output gap.

Government action isn't limited to fiscal stimulus. Federal Reserve rates and tax/spending cuts count, too.

[badlydrawnjeff.livejournal.com]

But that has nothing to do with what I'm talking about. I was just saying that there is a cost to inaction, as illustrated by an output gap.

My error, I thought you were talking about the output gap that the stimulus was trying to fill.

Government action isn't limited to fiscal stimulus. Federal Reserve rates and tax/spending cuts count, too.

Absolutely, but the fiscal stimulus was what the government chose - to our detriment.

[nevermind6794.livejournal.com]

No, I was speaking generally. But looking back at my original comment, I did say "stimulus" where I really meant "government action."

Tax cuts are a form of stimulus, though - Keynes advocated for those in addition to spending boosts.

[badlydrawnjeff.livejournal.com]

No, I was speaking generally. But looking back at my original comment, I did say "stimulus" where I really meant "government action."

Fair enough.

Tax cuts are a form of stimulus, though - Keynes advocated for those in addition to spending boosts.

Sure. It's too bad we didn't really go for those, though. Did some small tax credits, which don't cut taxes and were temporary enough where no one would actually do anything with them. But thems the breaks.

Pay no attention to the man behind the curtain:

[underlankers.livejournal.com]

Actually we did try the biggest tax cuts in history:

http://www.washingtonmonthly.com/archives/individual/2009_02/016863.php

I believe if Obama were to start spouting every nostrum of the GOP they'd turn into hardcore Bakuninites the next day.

Re: Pay no attention to the man behind the curtain:

[badlydrawnjeff.livejournal.com]

There were no tax cuts in the Obama stimulus, only tax credits. Obama didn't actually sign a tax cut until last December.

Re: Pay no attention to the man behind the curtain:

[underlankers.livejournal.com]

My God, it's like talking to David Irving!Bot.

Re: Pay no attention to the man behind the curtain:

[badlydrawnjeff.livejournal.com]

Again, facts are important.