I know its hard to remember back that far, but a year ago a Democratic presidential campaign was talking about how George W. Bush had ruined the economy. As theme, it was second only to Bush's career in the Air National Guard. So how does the economy look now? The Wall Street Journal has a helpful editorial on this.
We would like to take a moment to pause and marvel at the U.S. economy. Last week's Labor Department report of more than 200,000 new jobs in July, and two million over the past year, provides the latest bullish details. But the larger story of American job creation, and its causes, is even more impressive.
First, more Americans have jobs today than at any other time in history. Second, over the past two decades or so, the U.S. has created more than 40 million jobs--twice as many as Europe and Japan combined. And third, the U.S. has one of the lowest jobless rates of all developed nations.
More jobs created than in Europe and Japan combined. One wonders if Michael Dukakis has finished that book on Swedish land use planning yet. Back in 1988 I speculated that it would take about this long to read.
Of course Bush is responsible only for the end of that period, and must accept responsibility for the recession that occurred as he came on watch. Still,
The 5% jobless rate today is almost a percentage point below what it was during the same stage of the business cycle during the vaunted "Clinton expansion." In the past 24 months 3.5 million more Americans have found work, which is the equivalent of a new job for every worker in the entire state of Indiana. Every single job that was lost during the bursting of the technology bubble and stock market collapse of 2000-01 has been matched by a new job, often in a new industry.
One wonders if, perchance, it had anything to do with Bush's tax cut? Well, the Journal has a chart.
No doubt it is a complete coincidence that Bush's tax cut was followed by a strong economic recovery, just as it was accidental that Ronald Reagan and John F. Kennedy did the same thing and saw the same results follow. History can be irritating.
The current line coming from the liberal chatterbox is that the low unemployment figures are really bad news.
Why? Because American workers are allegedly becoming discouraged in their quest to find work, and this surge in dropout workers brings the real jobless rate to between 6% and 8%. The evidence for a surge in discouraged workers is that the percentage of working age Americans in the labor force has fallen from an all-time high of 67.3% to 66.0% today. If this seems worrisome, it isn't. The average labor force participation rate for the post-World War II period is 63%--well below today's rate.
In fact, the relative drop in labor force participation is a sign that some American families are comfortable enough to invest their time in something other than a job.
With median family income now above $52,000 a year, more families can maintain a comfortable lifestyle with one spouse working rather than two.
I seem to recall that, back in the Reagan era, the complaint was that too many people were working.
Ironically, for years critics of the U.S. economy have complained that Americans are "overworked" and that "it now takes two incomes to produce the living standard that once required just a working father." To the U.S. bashers, it is a sign of decline if more people are working, and it is just as bad if fewer people are working.
The bad news that seems to follow from Republican policies is the sort of bad news we can handle.
Recent Comments