Jobs Numbers Are A 'Delusion'

by JASmius



David Stockman tells it like it is:

The latest rosy national jobs picture is a "paint-by-numbers delusion" that hides a brutal erosion in the nation's employment picture, according to David Stockman, U.S. budget chief in the Reagan White House.

Stockman, not one to sugarcoat the failings of Washington, D.C. — or of the Federal Reserve in particular — said the delighted squeals of the "bubblevision commentariat" (his characterization of traditional financial TV coverage) about the October employment report were bogus.

"Well, now. Here we are nearing the end of 2014 and the nation's once and mighty 'jobs machine' is fixing to utilize no more labor hours this year than it did way back at the end of the 20th century," he wrote on his Contra Corner blog.

Stockman, who knows his way around government data crunching, said the index of total labor hours in the non-farm business economy is at about the same level as way back in the third quarter of 1999.

"This means that during the 21st century to date the U.S. economy has been bicycling up-and-down an essentially constant amount of labor during the intervals between the serial financial market booms and busts engineered by our monetary politburo."

Stockman said the Fed's leadership should be required to answer why, even after inflating the nation's balance sheet debt from $500 billion to $4.5 trillion, its "monetary elixir has not generated a single additional labor hour in the nonfarm business economy for fifteen years running."

Oh, they'll never answer that question truthfully, Mr. Stockman.  Were they to do so, they'd have to admit that it's all a gigantic smokescreen to conceal the Obama Depression from an ignorant electorate relentlessly anesthetized over the past six years to regard joblessless, dependency, and widespread, institutionally-mandated poverty as "The New Normal" - and, of course, "economic recovery," no matter how long it stubbornly fails to materialize.

While he noted that the October report showed gains in leisure and hospitality jobs and retail clerk positions, those were mostly part-time jobs at low wages, and he questioned why they should be considered by the government to be equal in the data to real full-time jobs at normal salaries.

"The headline jobs number is not the equivalent of a reliable index which measures the rate of change in labor inputs supplied to the U.S. economy. It is essentially a statistical anecdote. It not only counts ten-hour per week 'temp' gigs and real fifty-hour jobs the same, but also ignores entirely the quality of hours worked as proxied by the hourly pay rate," Stockman explained. [emphases added]

Cynical, partisanly self-serving statistical cherry-picking.  Which the media will be loudly pointing out if a Republican is elected to the White House ever again, just as they smeared the Bush43 recovery "jobless" and the twenty-one million jobs created in the Reagan boom as "burger-flipping".

Stockman's conclusion is that central bank policies reinforce a make-believe world instead of promoting real employment.

"They permit the government to fund with ultra low-cost bonds and notes a massive transfer payment system that keeps potential productive labor out of the economy, and thereby props up bloated wages rates; and enable households to carry more debt than would be feasible with honest interest rates and competitively priced wage rates…"

Aaaaaaand, thus, keeps Democrats in power.  Or at least, it did before a week ago yesterday.

But remember the Democrat that does remain in power, and who is, most likely, going to remain that way for years and years to come.  Which means this "make-believe world" isn't going anywhere anytime soon.