Dude, Where's My Recession?

 

Rezoned development around a suburban transit hub. Image via New Jersey State League of Municipalities.

Happy beginning-of-the-month Freaky Friday, when the Bureau of Labor Statistics releases last month's job numbers and we sit down to play another round of Good News is Bad News:

I'm looking at this jolly message

Holy moly, we've got another one!

Payrolls grew a huuuuuge +253k in April, well above market expectations. There's no hint of any sort of labor market slowdown in these numbers. Other indicators had been hinting at a slowdown, but these are more reliable.

— Justin Wolfers (@JustinWolfers) May 5, 2023

and instead of smiling, I'm instantly telling myself ruh-roh, Fed's gonna keep pushing those interest rates up. Bad News! But wondering, can't you let it be Good News for a change, just the one time?

Annals of Derp: Unemployment in the Le Pen philosophy

Photo by AFP/Getty Images via Daily Mail.

NPR Tuesday morning, interviewing a member of the Le Pen campaign, Mikaël Sala:

GREENE: Let me just step back and look at Europe and the world right now. There was a lot of talk that there was this populist surge across Europe and in the U.S. But, you know, recently Austria rejected a populist candidate for chancellor. Geert Wilders in the Netherlands did not do as well as expected. Angela Merkel seems safer now in Germany than a lot of people thought politically. I mean, is there really still a populist surge that you're seeing?

SALA: Sure. I'm going to tell you why it is really powerful in France. In France, we have two problems. We have a problem with mass immigration that we cannot afford anymore, and we have a problem with our economy which is unable to grow. And it so happens that in the Netherlands and in Austria, they have one of those two problems. They're facing mass immigration, but their economies are still going about all right. So it's not that we're not compassionate, it's that we can't afford, you know, welcoming any more people because we are on the brink of bankruptcy.

Doesn't that suggest anything to you? Like maybe if the Dutch and Austrian economies are growing in the teeth of all those immigrants—to say nothing of immigrant-friendly Germany and Sweden and Belgium—maybe immigrants aren't the problem?

Annals of derp

From Jim Hoft, often regarded as the "Stupidest man on the Internet", the following chart showing that Obama has impoverished our country by taking everybody's job away:

Or you might look at it a different way, in terms of how the unemployment rate changed during each presidency, showing what each president might be said to have achieved rather than splitting the difference between the beginning and end of his time in office:

i.e., under Clinton from a little over 7% to a little over 4% (creeping upward at the end of his term toward the 2001 slump, one of the mildest in US history), under George W. Bush from a little over 4% toward a high of about 10% before Obama and Bernanke's Federal Reserve were able to bring the situation under control, and under Obama from 10% back down to 6.6% at last report 6.7% as of March 7 (about a year earlier than MarketOracle was predicting in 2012).

You might also note from the convenient chart below that the US and the European Union entirely ceased to track together during the Obama presidency, as Europe followed what can only be described as a Republican policy of stern budget-balancing, while the US did not, as far as Congress allowed us to while the Fed took up some of the slack that Congress refused to carry.

This is really not rocket science.

One or two Lumps?

As the defeated Tea Party legions begin their long trek west from Moscow, out come the traditional-minded Republican senators and their cocktail friends—haven't Susan Collins and Max Baucus, for instance, been in the headlines an awful lot lately?—to see what damage they can do in the intervening chaos. Yesterday's report was of Senators Corker and Alexander (formerly known as Lamar! with the exclamation point included, anybody remember that?) to demand that the retirement age be raised, or they'll blow up the debt ceiling, trapping us all inside the building.

Now old Lindsey-Woolsey* Graham is on board with the same extortion plan.

Sorry, I don't negotiate with terrorists.

*I have long felt that "Huckleberry", with its cornpone crackle, makes a lousy nickname for this starchy, perpetually indignant fussbudget.

First edition of Tasha Tudor's book (New York: Oxford University Press, 1946).

Why is it, do you suppose, that they're so fixated on that particular item? I mean, I can really understand the thing about cutting Medicare and Medicaid benefits: it may be a bad solution, but it is to a problem that actually exists. But surely Corker and Alexander have heard by now that Social Security does not contribute to the deficit, will not be in trouble for a good many years, and will be easy to fix when it happens.

Are they just envious of retired friends and neighbors Facebooking their endless vacations, while they themselves must spend literally days every month in tedious Washington haranguing tongue-tied committee witnesses? Is it a moral issue—is our social substance being consumed by shiftless 69-year-old bucks blowing their checks on T-bone steaks, Cadillacs, and smartphones? A-and listening to that filthy bebop music?

Or are they merely representing the old Markets hungry, boss. Must feed markets, plenty fresh cash, or P-E rate go down rent-seeking institutions in their eternal quest for the money nobody else seems to be using at the moment? Because the bond market gets to play with your Social Security as long as you're not collecting it?

Be that as it may, what I was thinking about was something completely different: whether there's a relationship between delayed retirement and unemployment, such that making all us dotards keep slaving away until we're 70 will have the effect of making it harder than ever for others to find jobs—youngsters, and middle-aged layoff victims.

Because, as it happens, there's a good deal of delayed retirement going on already:

In 2009, 31 percent of eligible people signed up for Social Security, up from 27 percent in 2007. But the take-up rate has since declined to 28.3 percent in 2010 and 26.9 percent in 2011. The Urban Institute found that a smaller proportion of eligible people signed up for Social Security in 2011 than in any other year since 1976.

The rise in retirements from 2007 to 2009 was a response to the housing-and-finance crisis which put so many out of reach of ever getting a job again; the later decline reflects the changes in Social Security that have already taken place, the general crappiness of the new-style pension plans (just ask Richard Armey!), and a higher educational attainment that puts more of us in jobs that we are physically able to do until we have to be carted away into the R&R we can't afford.

Uncredited image from the apparently now defunct blog Upper Italy, in a post that reminds us that linsey-woolsey, a "garment mingled of linen and woolen", is shatnez, an abomination unto the Lord (Leviticus 19:19).

Well, Dr. Google informs me that the received wisdom among economists is that I am guilty of the Lump of Labor fallacy in expecting delayed retirements to interfere with employment growth. Or rather, that early retirements don't increase employment, as they used to believe in Europe in the 1980s and still do in France. The fact that they still believe it in France is a sign that it's a little more complicated than that.

The Lump of Labor fallacy is when** you believe that any community has a fixed amount of work that has to be done, so that for example if you hire immigrants you are taking work away from the natives. It was first used to mock the English Luddites who believed that the spinning jenny would eliminate their jobs, which of course it didn't.*** Obviously the amount of work in a given community constantly changes, the work itself being one of the factors (the more suits you make the more dry cleaners you require). When you add immigrants, you add economic activity, so the number of jobs may increase. Thus, anybody who really believes in the Lump of Labor is an idiot.

I'm no economist, but I must warn you, I have studied logic, and this putdown is a transparent, elementary straw man. You don't need to believe in the Lump of Labor to worry about the retirement system affecting the jobs market; all you need is to walk into your local Barnes & Noble and look at the grumpy 70-year-old manning a cash register, doing a job that is a godsend for a student or aspiring actor sharing an apartment and groceries with five other people, but is of very little use to this guy.

There is no fixed number of jobs in a community, but there are historical moments when there is a shortage of jobs, and they happen when there is a deficit of demand, and that comes when nobody has enough money. Like, uh, now. And if you force people to remain at an advanced age in jobs they don't want (don't look at me, I love my job), it's not going to help. Lumps of Labor have nothing to do with it.

**See the very remarkable Ecological Headstand for a splendid tirade against Professor Krugman, who seems to be somewhat on the right on this topic, a complete history of the Lump of Labor trope, and much more.

***Although, didn't England virtually have to mummify South Asia and later Africa in English cotton in order to keep the industry going?

Short times

Henri IV exercising the Royal Touch to cure scrofula. Engraving by André Du Laurens ca. 1609. Wikipedia.

The Times teaser for its editorial this morning seems like a true Shorter*:

After the unmistakably weak employment report for April, it’s obvious that the economy will not heal itself without more government help.

Gosh,  Sparky, ya think? And that oh so subtle line between "obvious to everybody not representing a major journalistic enterprise or the Republican Party" and obvious tout court, what does it specially have to do with this April's report as opposed to, oh, say, the report for April 2009?

Nevertheless the editorial itself is not so ingenuous, and not disingenuous at all; it may start off all "nor is it clear where more growth will come from," but it's very clear about the source of the dissipating unclarity:

Election-year politics are bound to further confuse the economic picture and the way forward. On Friday, Mitt Romney blamed President Obama for the April jobs figures, saying that in a normal recovery “we should be seeing numbers in the 500,000 jobs created per month."

The truth is that the economy has not seen job growth like that in nearly 30 years. More to the point, the policies Mr. Romney espouses — notably deregulation and tax cuts for the rich — were the favored policies under President George W. Bush, years when job growth and wage gains were, at best, anemic.

The reason it's this April is that it's the April of the presidential campaign, and the reason it's newly obvious is that the policy debate for the campaign is taking on its definitive form, with its Democratic picture of job growth as something that can be done by anybody who can put some money together with a job description and a hire, and your Republican picture of "job creation" as some kind of quasi-ethnic property, like the ability to cure scrofula, remaining there even if it is unused, so that Willard Mitt Romney was still a job creator when his main job was slashing thousands upon thousands of actual jobs and in all the years he has been a simple rentier (with a hobby of political campaigning rather than RV travel and the like).

And even though what would really be nice is if it inspired somebody to say, "Hey, let's ship some money out to those state capitals," just taking that position is a help.

*We are selectively aware of certain Internet traditions.

The idle 'prentice

The idle 'prentice executed at Tyburn. From William Hogarth's Industry and Idleness (1747).

The Times this morning, Landon Thomas, Jr., was all on about the young people of London who are never in their natural lives going to have jobs—

Perhaps the most debilitating consequence of the euro zone’s economic downturn and its debt-driven austerity crusade has been the soaring rate of youth unemployment. Spain’s jobless rate for people ages 16 to 24 is approaching 50 percent. Greece’s is 48 percent, and Portugal’s and Italy’s, 30 percent. Here in Britain, the rate is 22.3 percent, the highest since such data began being collected in 1992.

And indeed it's horrible, the sequence of stories of... Hang on a minute, when did Britain [jump]