High U.S. Unemployment Rate, Obama Failure Or Bush Catastrophe For Romney To Continue?

High U.S. Unemployment Rate, Obama Failure Or Bush Catastrophe For Romney To Continue?

ElectionOracle / US Presidential Election 2012
Oct 06, 2012 - 01:11 AM
By: Nadeem Walayat

Democrats and republican have been busy putting their own spin on the latest unemployment data released by the BLS which shows that the US unemployment rate fell below 8% for the first time in 45 months by falling 0.3% to 7.8% for September 2012, down from a high of 10% reached in October 2009.

Amidst an election frenzy, both parties and candidates have jumped on the data to their advantage.

Romney called it a jobs crisis -"By any rational measure, it's crystal clear we're in the middle of a jobs crisis", "My priority is jobs. And from Day One of my presidency, I will lead us out of this crisis."

Obama said the 114,000 new jobs in September, coupled with the drop in unemployment, was "a reminder that this country has come too far to turn back now.", "We've made too much progress to return to the policies that caused this crisis in the first place."

In sticking to the official standardised statistics produced by the BLS rather any of the political motivated statistics found around the net, the below graph illustrates the trend in the unemployment rate from 1992 to the present in terms of Presidency.

The data clearly illustrates the extent to which the Bush presidency was a catastrophe for America as Bush handed Obama an economy that was literally in a state of free-fall, the consequences of which were that it took Obama some 10 months to bring the rate of free fall to a halt, with the subsequent recovery at a very similar rate of decent as that under the Clinton Presidency which suggests, should the trend continue than the U.S. unemployment rate should fall to about 6.5% by the time of the 2016 election.

On the other hand all Mitt Romney has to point to is the track record of GW Bush, which would imply a further catastrophe sending the US unemployment rate soaring towards 13%, which explains the complete denial that the Republicans have been in where effectively the economic and financial world stated on 1st of January 2009, with zero acknowledgement of the Bush catastrophe.

A further look at the historic of unemployment rates amongst previous Presidents shows that there is a clear tendency for Republican Presidencies to push up unemployment rates whilst Democrat Presidencies tend to cut the unemployment rates.

Therefore in all probability if Romney does win the election then US unemployment will be higher than where it is today (10%?) and were Obama reelected the unemployment rate will be lower than where it is today with the trend suggesting it could fall to around 6.5%.

Many in the mainstream (New York Times) are running with the fact that no sitting president has ever been re-elected with an unemployment rate at above 7.2%. However what the mainstream press fail to appreciate is that the actual rate is no where near as important as the TREND in unemployment. Therefore the press are again focusing on a red herring that they will only realise after the event, after the election because the 3 year long falling trend in unemployment is on par to that which delivered Bill Clinton a landslide victory in 1996, which suggests that the gap between Obama and Romney is far greater than that which the opinion polls imply. Therefore many american's may be surprised on election night when the results start coming in that point to a Strong Obama Election win of more than 300 Electoral votes.

The bottom line: the September unemployment rate will have an important impact on voters as it has succeeded in confirming a continuing down trend in the minds of voters, whereas had unemployment risen by 0.3% then that would have sown doubts that republicans have been fighting desperately to instill.

"Look. First, Obama spent his time getting us Obamacare and massive taxation, so he actually FOUGHT employment."

Actually Obama spent his first couple of months getting a stimulus package. Unfortunately he wasted a lot of that. And I'm not sure how much Obama spent his time on Obamacare. I thought that was mostly Pelosi. I thought Obama was mostly silent during that period.

"Second, it was Clinton that put policies into place that caused the housing bubble and crash. National Homeownership Strategy."

Mortgages take a hit in every recession and in hindsight it looks like a real estate bubble. It's not. Mortgages are a symptom not a cause.

What caused the crash was an oil price spike which combined with a weakened economy resulted in a rapid drop in disposable income and a corresponding rise in unemployment. The unemployment resulted in a mortgage crisis which broke the dollar in a money market fund for the first time ever. That resulted in a sudden bank credit dry-up. Then Bush took the wind out of whatever was left of consumer psychology by shocking us all on TV with his demand for TARP.

The weak economy was the result of lowering our tariffs and free trade agreements which effectively outsourced American jobs overseas. You can elminate all taxes and regulations and you still won't be competitive with Communist China's $2/day wages. There is nothing wrong with using tariffs to protect the American market to keep full employment like our founding fathers did. It worked fine until about 30 years ago when they brought the tariffs down.

This was all made worse by the repeal of Glass-Steagall which allowed banks to engage in riskier behavior. The failure of the FDIC to regulate Credit default swaps while allowing banks to use them to offset their risk. And the lowering of the bank reserve ratio by the Federal reserve to an effective 1%. Consequently when the liquidity crisis hit the banks, they had no where else to go, but to go to Congress and ask for TARP.

"Get real. Obama is ANTI CAPITALISM, ANTI JOBS FOR NON GOVERNMENT.

I don't think Obama is truly anti-capitalism. He doesn't think the free market cures everything. And he relies too much on Government. That was evident in the way he spent the stimulus funds.

However, Romney is to the other extreme. Romney thinks the solution to unemployment is MORE free trade. Romney thinks if he just cuts government spending, the economy will bounce back immediately whether or not we are stil competing against $2/day wages.

Romney is a slight positive on energy policy. And cheaper energy will help the economy.

I don't plan to vote for either.

I don’t know where they are pulling those statistics, but here it is straight from the Bureau of Labor and Statistics.

This measures the civilian unemployed against the civilian labor force.

January 2009: 7.81% (12,049,000 - 154,236,000)
September 2012: 7.80% (12,088,000 - 155,063,000)

Obama’s massive breakthrough on unemployment? 0.01%

Oh my gosh. By January 2017 we could expect to see 7.79% unemployment. Simply amazing...

Note that the civilian work force grew by only 827,000 under Obama in his first 44 months. Under Bush the civilian work force grew by 3,615,000 in the first 44 months of his first term. It grew by 6,530,000 in the first 44 months of his second term.

Source: http://data.bls.gov/cgi-bin/surveymost?bls

Romney said that he would provide more jobs for government schools. He’ll do the Republican socialist thing: shovel more pork to local teachers, social workers, planners, police, building inspectors, NGOs: those who keep their eyes and ears (gossiping NIMBY pensioners) out against any peasant attempts to start new businesses. The debt regime continues to inflate. “States’” socialist “rights” to more federal pork, eh?

The Democrats want to keep more of the debt pile for federal jobs and strengthen the bigger evil eye more from the federal end. Both parties want to continue enforcement of political correctness (feminism, homosexualism, anti-family-ism, etc.,...keeps the riff raff from producing anything).

Anyway, just be sure to vote for Republican candidates for the House. The House of Representatives is our last legislative defense of constitutional rights. The less government does, the better.

The pile of recirculating debt will be more worthless each year, and that’s just going to happen. Toward the end of default time, government will shrink, as it’s forced to lay many employees off and cut spending (see Greece, Argentina, all). Government won’t willingly shrink itself.

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