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I am struck by the apparent downtrend in job volatility (gross job loss, gain numbers are trending downward).

To me, this is a sign of increased job security, also contrary to Dobbsian job theory.

Steve,

You are consistently optimistic about the days economy but to me Clintons numbers / Clintons economy was far superior.

http://tinyurl.com/2hpjev

But more importantly is what the people think. Two recent polls...3 if you count last Novembers elections suggest everyone else, especially our middle class, are not quite as optimistic.

http://tinyurl.com/2hpjev

http://tinyurl.com/yoq3eg

Also do you know if we calculate our employment numbers differently then other countries? Have we recently changed how we calculate the numbers?

Muirego,

Clinton - Timing is everything. Please give specific examples of exactly what the Clinton administration did that supports your claim.

Steve,

I understand that BLS(?) counts retirement as a job lost. Apparently they assume it won't be replaced. To be fair though, I am interested in the mix of the change. In other words what jobs are being replaced with what jobs.
Don't expect you to do dig that up though.

Excellent post. It's a shame more people do not understand this.

The most frequent counterpoint I hear when I try to explain this stuff to people is that the new jobs are less desirable than the old ones - people seem utterly convinced that high-paying jobs are being replaced by low-paying ones. They even point to declining wages to justify this belief.

I counter that compensation is rising, and that wages are only in decline because non-wage compensation (mostly health care) has displaced them. This seldom seems to convince anyone. Everybody believes the whole economy is circling the drain, despite low unemployment, low inflation, higher compensation, a record DOW, a shrinking deficit and a healthy GDP.

While I agree with your view wholeheartedly, I was just curious if you had any data on (mean/median) salary of the jobs that are destroyed versus the salary of those that are created each quarter.

I have a hunch that the new jobs are better paying, but either way, it'd be interesting to see.

I suspect that Greenspan's liquidity creation leading up to potential Y2K trauma's helped inflate the internet bubble, and along with it, unusually high demand for workers.

How else could we explain violating natural employment (which has strong consensus of economists, plus historical data pattern confirmations) of 4-6%? Muirgeo? Muirgeo? Bueller? Bueller?

Andrew: I did not see your followup to Mike's comment, as I was posting my own.

Rather than looking only at salary trends to determine financial health of people, I would also suggest you look at another one of Steve's sources, the federal flow of funds statements. I like this statement because it captures the strong growth financial and real estate assets, net of liabilities, for all households.

The reason why salary data may not be sufficient is that people move through salary ranges throughout their lives. As teenagers, university & graduate students, and retirees, most of us tend to make less than half the median and average income. However, in our prime earning years of 35-55, most of us tend to make more than half the median/average income.

Caveat Bettor, you beat me to the Clinton bubble based upon the many $100 billions invested in Y2K and its supporting technologies.

If only I had been smart enough to get out of technology stocks in 2K. Oh well, that's another story.

Caveat -

The topic is job creation and wage income not net worth. They can be related but not assured. Poor investments can cause a high wage earner to have low net worth while frugality, patience and smart investing can create a higher net worth for a more modest wage earner.

Something to keep in mind when comparing Clinton job creation and Bush job creation.

When Clintion entered office, the unemployment rate was 7.3%

When Bush entered office, the unemployment rate was 4.2%.

It is much easier to create jobs when you have a much larger amount of unemployment to begin with, and much harder to create jobs when the unemployment rate is near record lows when you enter office.

http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?data_tool=latest_numbers&series_id=LNS14000000

Also, I've done an analysis on the so called "shrinking middle class" and have found it to be bunk.

Here is my analysis to see this idea clearly refuted.

This is the relevant data to see if people's lives are really improving. All data is adjusted for inflation using 2005 dollars
----------------------------------In 2004 there were 18,928,000 households that earned above $100,000

In 2005 there were 19,674,000 households that earned above $100,000. 746,000 new households surpassed the $100,000 in income mark vs. the previous year, an increase of 3.94%
----------------------------------
In 2004 there were 12,694,000 households that earned between $75,000 and $100,000.

In 2005 there were 12,697,000 households that earned between $75,000 and $100,000, an increase of 3,000, for roughly no change. This is ok, since almost 750,000 were added to the $100,000 range, so we can see that they weren't just simply shifted from this income range to the next, leaving everyone else stagnant.

----------------------------------
In 2004 there were 20,742,000 households that earned $50,000-$75,000.

In 2005, there were 21,047,000 households that earned $50,000-$75,000, an increase of 305,000, or 1.47%
----------------------------------
In 2004 there were 16,548,000 households that earned $35,000-$50,000.

In 2005 there were 17,043,000 households that earned $35,000-$50,000, an increase of 495,000, or 3.0%.
----------------------------------
In 2004 there were 13,148,000 households that earned between $25,000-$35,000.

In 2005 there were 13,040,000 households that earned between $25,000-$35,000, a decrease of 108,000, or .8%.
----------------------------------
In 2004 there were 14,395,000 households that earned between $15,000-$25,000.

In 2005 there were 14,184,000 households that earned between $15,000-$25,000, a decrease of 211,000, or 1.47%.
----------------------------------
In 2004 there were 7,481,000 households that earned between $10,000-$15,000.

In 2005 there were 7,321,000 households that earned between $10,000-$15,000, a decrease of 160,000, or 2.14%.
----------------------------------
In 2004 there were 5,554,000 households that earned between $5,000-$10,000.

In 2005 there were 5,719,000 households that earned between $5,000-$10,000, an increase of 165,000, or 2.98%
----------------------------------
In 2004 there were 3,854,000 households that earned under $5,000.

In 2005 there were 3,775,000 households that earned under $5,000, a decrease of 79,000, or 2.05%.
----------------------------------
The total number of households that earned above $35,000 in 2004 was 68,912,500.

The total number of households that earned above $35,000 in 2005 was 70,460,500, an increase of 1,548,000 or 2.2%.
-----------------------------------------------------------------------
The total number of households increased from 113,343,000 in 2004 to 114,384,000 in 2005, an increase of 1,041,000, or .9%.

This data clearly shows that most households are clearly improving their situations from 2004 to 2005, contrary to what that NYT article would imply. Most higher income brackets showed nice increases. Almost all lower income ranges showed decreases. The only one for which this was not the case was the $5,000-$10,000 range, but this is partially offset by the decrease in the under $5,000 catagory, likely implying that many in the under $5,000 catagory shifted up to the $5,000-$10,000 catagory and also perhaps due to new immigrants perhaps being added to this catagory (where immigrants typically start of near the bottom, about 900,000 legal immigrants were added to the U.S. population in 2005).

All data gathered from page 38 of the following .pdf file with comprehensive statistics from the U.S. Census:

http://www.census.gov/prod/2006pubs/p60-231.pdf

I eagerly await the new report that is going to be released for 2006 at the end of August this year.

Also, for those curious about what jobs are being created, as I often get questioned by people who believe there is nothing good left, take a look at this website to see what jobs we have and how much they pay (data is from 2005, 2006 data will be released sometime this Spring)

http://www.bls.gov/oes/current/oes_nat.htm#b00-0000

Ignore the comment about the NYT article in my comment above, I copied and pasted the analysis from another post of mine on a different site and forgot to edit it out.

An annual rather than quarterly chart would highlight this fairly astonishing fact: According to these numbers, about 30 million, or 25% of all private sector jobs, are eliminated every year.

Excellent job on the "jobs" info, Stephen.

Something to keep in mind when comparing Clinton job creation and Bush job creation.

When Clintion entered office, the unemployment rate was 7.3%

When Bush entered office, the unemployment rate was 4.2%.
from Stephen Reed


So why was it 7.3% when Clinton took over? Oh yeah Reagan/Bush.

And why was it 4.2 when Bush W took over? Oh yeah Clinton.

But of of course Clinton just timed it well.

Come on guys I'm an amatuer but I'm not a fool. Some point you have to look in the mirror and ask if your being intellectually honest.

Clinton increased taxes and had a better recovery then Bush who decreased taxes and that data speaks against a lot of what is claimed about tax cutas and the economy.


muirgeo, did you miss the explanations re: the tech bubble Clinton rode? Timing or planning, but was it Clinton's planning? Doubt it!

muirgeo:
I don't share your nostalgia for Clintonomics, for a number of reasons. One is the fantastic political-spin-driven reversal of cause-effect that still inexplicably goes unchallenged: "The surplus caused the economy to grow." Right... and the crowing rooster caused the sun to rise. And you probably already know what I think of sacrificing national security on the false altar of surplus-worship.

I strongly recommend this Alan Reynolds article: "Comparing the Bush and Clinton Economies" at http://tinyurl.com/2mcp4b

Stephen:
Thanks for those excellent links; I bookmarked them for future study.

Andrew:
Good question about the quality of new jobs. We know they aren't all hamburger-flipping positions. Real GDP per capita, real GDP per worker per week, real compensation per worker per hour (or week) would seem to point the direction; I'm investigating.

Bob: The BLS has a lot of excellent data available. Here are two tables that you might find interesting:
http://www.bls.gov/news.release/empsit.t14.htm
http://www.bls.gov/news.release/empsit.t16.htm


Caveat Bettor, you beat me to the Clinton bubble based upon the many $100 billions invested in Y2K and its supporting technologies.

If only I had been smart enough to get out of technology stocks in 2K. Oh well, that's another story.

Posted by: Counter Revolutionary


Boy oh boy, Clinton was in the right place at the right time. Catching the wave of a rebounding economy, lucking out on a fluke tech bubble and leaving just before a fall. A veritable Mr. Magoo of a President.


Of course the current economy based on no-ineterest housing loans, hedge funds, negative private savings and 2 trillion of deficit public spending increasing military contractor and energy sector stocks is just brilliance on Bush's part.

mrmuir, I think your on the wrong blog to be bringing up these subjects. Just sayin....

There's a lot of difference between inheriting an economy going INTO recession, and an economy coming OUT OF recession.

Most people think the country is still in a recession. However, the majority of people say they are better off financially than they were under Clinton, with only a small group saying they are worse off.

So...I don't really put much stock in what most people think about the health of the economy.

muirgeo:

Also, please explain the massive policy differences between Reagan and Clinton. Because, the taxation and spending rates as a percentage of GDP didn't change much, and Clinton continued the deregulation movement of Reagan.

Look, Clinton had a good economy because of timing and the fact that he basically carried on the Reagan economic legacy (better than either of the Bushs, I might add).

Why wallow in all of this he said/she said nonsense?

The economy under both Clinton and Bush has been outstanding and we should be proud of that fact rather than play a game.

I'll be on the record as no great fan of Clinton, especially personally, but as much as supporters of Bush (including myself) give him some credit for our current economic boom, the same should be said for Clinton.

as much as I disagree with muirego on global warming, I do agree the it is intellectually dishonest to chalk the Clinton economic boom up to timing and luck

"as much as I disagree with muirego on global warming, I do agree the it is intellectually dishonest to chalk the Clinton economic boom up to timing and luck.

Well then Patrick, I will ask the same question of you. Please tell us exactly what the Clinton administration did to cause the boom. I'm looking for specifics here.

Bob:

Im not saying Clinton did anything to cause the boom, he just didnt get in the way. Personally, I dont think the government has the ability to create a good economy, only to create a bad one (thru poor policy). I really dont think Bush policy has "created" the good economy we have today, again, I think they have done a good job staying out of the way.

So, perhaps I should have been more clear in that if you are going to give Bush some credit for the good economy we have now, then you have to give some credit to Clinton as well.

Patrick,

Okay. I become more than just a little annoyed with those that assert that somehow Clinton created all the conditions for the economy during his time in office. The question that I posed to you and muriego is one I have used often and never get an answer to. At least you admitted to not having one.

If one were to do some homework one would find that there was a confluence of events, many of which preceded Clinton, that contributed to the boom (and subsequent bust - of course the bust happened under Bush so it must be his fault). Those events are not likely to be repeated any time soon

In his book, Irrational Exuberance, Robert Schiller identifies those events and illustrates how they contributed to the momentum that exploded in the nineties.

He makes some future projections that one can quibble with, I admit. However, his analysis of the time line leading up to the date of initial publication was impeccable, IMO.

Clinton definitely did some good things in office, and you don't have to look very hard to find them.

The real boom years for Clinton (as opposed to just ordinary performance) were from 96 on. What did Clinton do in 95? Cut taxes. And again in 96, 97, 98, 99 and 2000. Welfare reform in 96 was also good policy. NAFTA was good policy.

We should definitely repeat the Clinton policies of entitlement reform, tax cuts and free trade.

Pete,

Do you refer to marginal or effective tax rates? For what quintile of income? Can you provide the source of your claim?

I suppose the boom years were attributable to his "lower taxes", welfare reform and free trade.

NAFTA started under Bush 41. Clinton did enhance it. Welfare reform was a good thing.

What entitlements would you reform?

I have not seen any comment that Clinton did not do good things while in office.

I challenge anyone, anyone to provide proof of what Clinton did to create those magical bubble years.


Well then Patrick, I will ask the same question of you. Please tell us exactly what the Clinton administration did to cause the boom. I'm looking for specifics here.

Posted by: Bob

Bob,

My main point is that the Clinton economy doesn't support the simplistic notion that tax cuts are needed for a strong economy.

One thing Clinton did better then Bushs and Reagan was to spend the treasurey on things that benifit OUR economy and not the economies of other countries and multinational corporations.

How well do you think our economy would be if Bush had spent 1-2 trillion dollars less of our treasury?

So I can ask you the same question you asked me of the current economy. What did Bush do? Cut taxes? I don't buy that. I suspect this economy was significantly bolstetered by spendint 2 trillion dollars we don't have.

Cutting taxes and increasing spending...that's the most cowardly thing a president can do IMO, especially during a war and especially to the favor of a monoirty of super wealthy.

Muirego,

I made no claim or statement that Bush did anything better or worse than Clinton nor did I make any post that asserted the Bush tax cuts are the reason for the economic performance under his administration.

It was YOU who made claims about Clinton that I asked you to back up with specifics. Instead of specifics I get references to what Bush is doing now as you stated in your last post. Instead of hard facts I get opinions and the tiresome leftist position of catering to the super wealthy.


The things that Clinton did right:

1)Capital gains tax cut
2)Welfare reform
3)NAFTA
4)Using the Dept. of Commerce as a stooge for American Corporations for foreign business

Of the above 4 only #4 was uniquely Clinton. NAFTA was generally bipartisan. #1 and #2 were Republican initiatives that became almost politically impossible for Clinton not to sign.

What Clinton wanted to do but never got the chance.

1) Carbon tax - this was reduced to a 50 cent gas tax that, IIRC, never got passed in Congress

2) Health care reform - Don't get me started, if Clinton got his way, the health care industry would have been destroyed. His proposal directly lead to the accent of the Republicans in Congress (which was just as important to the '90s economy as Clinton)

3) Japanese style planned economy - This was THE major economic platform for candidate Clinton. In fact, after he won the election Clinton had a series of public meetings on the economy before he took office. The entire reason for these meetings was to show the American people that we needed a planned economy like the Japanese.

2) Health care reform - Don't get me started, if Clinton got his way, the health care industry would have been destroyed. His proposal directly lead to the accent of the Republicans in Congress (which was just as important to the '90s economy as Clinton)

Posted by: Ken

You mean the Health Insurance Industry would be destroyed, which in my opinion would be a good thing. The fact is the health insurance industry consist of useless blood sucking leeches who increase the cost of our health care 25% or more.

Every other developed nation (excluding Soutth Africa) has universal health care. They have national health care cost as much as half of ours and with outcomes as good or better.

The fact that ceo's like William Mcguire of United Healthcare made $125 million a year for 5 years then recieved a $1 billion dollar Golden parachute on retirement has nothing to do with free market capitalism and lots to do with a complicated morass more resembling a Ponzi Scheme.

That sob made the equvalent amount of money needed to provide health care by 1,000 doctors for each of those years he "worked". Never once did he touch a patient or look helplessly on trying to figure how to save a dying baby in the middle of the night and with limited resources.

Single payer is the way to go IMO.

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