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Trump’s SOTU Triumph, Democrats’ Defeat
At 5,100 words, President Trump’s first State of the Union address was one of the longest on record. But that’s not the only reason Democrats were checking their watches. Trump set aside his bombastic communications style to solemnly deliver the most conservative SOTU since the Reagan era. And it put Dems in an awful pickle.
Trump used the hour and 20 minutes of spin-free airtime to report a year of news that the mainstream media never quite got around to telling. “Since the election, we have created 2.4 million new jobs, including 200,000 new jobs in manufacturing alone.” As Trump spoke, Nancy Pelosi sucked her teeth.
“Unemployment claims have hit a 45-year low. African-American unemployment stands at the lowest rate ever recorded, and Hispanic-American unemployment has also reached the lowest levels in history.” The Congressional Black Caucus glared at Trump with their arms folded.
Whether Trump heralded the stock market, employee bonuses, or the destruction of ISIS, glowering Democrats remained the evening’s most consistent theme. It’s understandable for progressives to sit on their hands for conservative jurists, the Second Amendment, and cutting regulations, but again and again they fumed at America’s very success. Let a thousand midterm campaign ads bloom.
The emotional highpoints were generated by the many guests in the gallery: The grieving families who lost their daughters to violent gang members; the parents of Otto Warmbier; a policeman who adopted the child of a homeless addict. The most powerful moment belonged to Ji Seong-ho, a man who escaped North Korea on ragged crutches to find freedom in the South.
But the speech focused primarily on the American people. Instead of promising all the wonderful things the government would do, Trump underlined that its citizens were her salvation.
“[T]hey are Americans. And this Capitol, this city, and this nation belong to them,” he concluded. “Our task is to respect them, to listen to them, to serve them, to protect them, and to always be worthy of them.”
The modern Democratic Party believes that the American people belong to the government — and fervently wish the rabble won’t embarrass them so. We’ll find out in November which message is more attractive.
Published in Politics
That’s fine, but how do we measure the success of those policies? Do we accept the unemployment rate as one measure of a healthy economy, or not?
Their are names for these different figures, but this is part of a written statement. The whole stated is linked in the embedded highlight :
“In December, 1.6 million persons were marginally attached to the labor force, about unchanged from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. (See table A-16.) Among the marginally attached, there were 474,000 discouraged workers in December, little changed from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.1 million persons marginally attached to the labor force in December had not searched for work for reasons such as school attendance or family responsibilities. (See table A-16.)”
The way I read this, those not even being counted have not changed in number over the past year. So Trump is using apples to apples numbers in comparison to Obama. But both men are using a deceptive number for unemployment. One day somebody should be brave enough to stop doing this.
I don’t know if they readjusted the employment numbers. I did have a difficult time with how Obama did it, but I don’t have the energy to dig through Bureau of Labor Statistics website to figure out what numbers are being used and how they track to previous numbers. I did that during Obama’s administration. You are welcome to go dig it up and give us a reporting of it (assuming you have the time… commenting on Ricochet is not anywhere the same as researching and investigating for a well-done post).
But the BLS does publish all the numbers. Its just a matter of which ones the media reports or what is released in the white house official numbers.
Given the fact that the tax bill was only passed last month, it’s hard to see how it could already be reflected in employment rates. First year presidents always take credit for a booming economy, but when it’s struggling, it’s obviously a carryover from the last guy because the economy doesn’t react that quickly. What will matter is how the economy is doing in a few years, when we’ve had time to see the impact of Trump’s policies.
So, what is the CBC’s beef? Are they mad that the “wrong” policies created jobs for black people? Or are they angry because reducing black poverty isn’t good for them politically?
While it’s too early for the tax cuts to have had much impact, the regulatory reductions started day one. I think they’ve had a huge impact.
Average Numbers for Civilian Workforce for African Americans in 2017 (in thousands):
32,000 Non-institutionalized Civilians
57.6% Employment
7.5% Unemployment
12,000 Not in Work force
The most concerning numbers are in the age-range of 25-35, where the average for adults is above the average for 16+. 35+ carries an average around 5%.
For 2016, 8.6% with roughly the same Not in work force numbers
2015: 9.6%; Same
2014: 11.3%; Just under 12k
2008: 10%; 2010: 16%; 2012: 13.8%
So basically, what I just learned in my data mining experience is that there was about a 1,000,000 fluctuation between 2008 and 2017 on Labor Participation over the course of those years. The numbers were dropping, though after the first year, I didn’t look at the Civilian numbers. Its possible those were dropping, too, and I didn’t look.
If the Civilian numbers are the same, then what I just learned is that there was already a steady decline and that the Conservative policies of deregulation and lower tax rates have a negligible impact on employment.
LOL!
Right, and my point here is that the standard unemployment number doesn’t exactly make the case for an economic turnaround under Trump. If we look at the rate over the past 10 years:
We see that it broadly fits the Democratic narrative that Obama inherited a crisis, and presided over a recovery during which unemployment steadily receded from a peak of 10 in October 2009 to 4.8 when he handed over the reins to Trump. All Trump can really claim so far is that handed a healthy, growing economy he hasn’t mucked it up.
And the pro business policies were projected to come, so that businesses knew they had a friendly environment coming. Obama was a jobs and business killer.
This is based on adjusted numbers, factoring out the Out of Workforce. My numbers came from the tables by sex, age, race.
Granted unemployment is a poor indicator, but it is a politically sensitive issue and savvy for politicians to exploit it. It may not indicate Trump’s policies and rhetoric contributed to the economic rise, but the economic rise had a good deal to do with Obama leaving and Trump coming in. So what the heck.
I would say it’s way too early to tell. The tax cut in particular was just passed, what, a month ago? We’ll have to wait a few years before we can really demonstrate the impact one way or another, and even then it will be hard to tease out that one variable from all the other factors that impact the global economy.
Alas the Gorila Channel doesn’t exist. But A gorilla week would be great.
Dig into most of them and you’ll find a race hustler representing an impoverished district. Less poverty -> less demand for racially poisoned envy and freeloading -> they might need a new job.
While generally true, an argument can be made that influential players in the economy anticipated reductions in regulations and taxes that the new Republican dominance in Washington would bring, and ramped up their investment accordingly.
The “night and day” nature of policy change vis a vis the previous administration adds credibility to this argument. Does anyone believe that a ninth year of Obamanomics would have yielded similar results?
So philia rather than eros, eh?
I’m not overly interested in assigning credit for the current economy to anyone. I am absolutely confident that the first year of the Trump administration has been positive for the economy, and that we’ll see the results. Eight years of unconcealed contempt for business, runaway regulation, arbitrary law enforcement, increased labor costs and taxes, and the looming promise of another four years just like it — that’s what ended when we elected Trump. It is inconceivable to me that we won’t see substantial economic growth as a result. Assuming no war. And that we don’t lose both the House and Senate.
Get a chat room, guys.
Maybe, but if they anticipated tax cuts they were taking a gamble, as recently as last fall many of us were skeptical that a tax deal would get done at all, especially after Congress fumbled the Obamacare repeal.
Also there was a lot of uncertainty about the Trump economic agenda, would he stick to conservative orthodoxy and focus on tax cuts and deregulation or would he move in a protectionist direction and possibly start a trade war? To his credit he has so far stuck to the former, but again you’d have been taking a gamble anticipating that on Inauguration Day, and markets don’t much like uncertainty.
We’re starting to see stories now of businesses giving out bonuses, and that makes sense to me: companies that took a wait-and-see approach last year can now settle in and adjust their plans based on the new tax law. I think 2018 will be a better gauge of the real impact of the Trump agenda than 2017.
Taking “gambles” is what execs do. But it wasn’t really much of a gamble. I think most of the doubts you point to were dropped after the election and the emergence of a pretty strong GOP constellation in Washington. Certainly, large doses of deregulation were anticipated. Tax reform was never a question of “if” but a question of what form it would take. Of course, 2018 will be a better guage than 2017; and 2019 will be a better guage than 2018…
My understanding is this. The government collects several numbers for unemployment. There is the U3 which is what is commonly touted as the “unemployment rate”. This is people who don’t have a job but are looking for one. Then there are two other numbers the U5 which includes workers that have given up looking for work (discouraged) on top of those looking for work. Finally there is the U6 which adds to the U5 the number of people who are working part time but only because they can’t find full time work.
See here for the graph of these numbers since 1995. If you look at all three values they peak with the 2008 recession (which makes sense) and then basically slope down at an even rate to today. Roughly parallel to each other. So nothing about 2017 seems to be unique compared to the trend established in previous years. It is the only reasonable way to read the data. So Trump taking credit for unemployment today is a slight of hand. One presidents always employ if they can. So I don’t fault him for doing it. I however to lament that the public at large can so easily be manipulated in such a consistent manner.
I recall back in the days of the Obama administration to promote their stimulus bill they released a a graph with two projections on it of unemployment. One with the bill passed and one with out the bill passed. A few years later one looked at the results compared to the predictions and what you saw was that we had the unemployment rate they predicted would occur with out the stimulus. Their conclusion was that clearly things were even worse than they though and weren’t we lucky we passed that shovel ready bill. That my friends is bad data interpretation.
The danger of the current unemployment rate is that the last time it was this low was 2000. Then we had a minor recession and it went up again. The rate will never drop to zero, 6% was traditionally considered full employment. My suspicion is that this talking point will soon be dropped.
It’s not that they’re using a deceptive number, it’s more that there is no single number that captures the picture accurately. Using the topline unemployment rate (called the U-3 rate, used in the charts above) can be deceptive if there is a significant decline in labor force participation, or if there is significant underemployment that is not being captured in the U-3 rate. The broader U-6 rate captures underemployment, but can still be misleading if there are changes in labor force participation.
Here is the labor force participation rate (link):
As you can see, it’s been pretty stable since late 2013. There was a serious decline from around 66% to around 63% between 2008 and 2013. It was during this period that Obama’s claims about improvements in unemployment were somewhat misleading, because of the decline in labor force participation. In fairness, some of this decline would probably have occurred even in a good economy, as retirement of the Baby Boomers was putting downward pressure on this rate.
Here is the U-6 unemployment/underemployment rate (link):
As you can see, the decline by this broader measure is better, over the past year, than in the top-line U-3 measure. It is down a full point, from 9.1% to 8.1%, between December 2016 and December 2017.
More re unemployment: it’s worth remembering how badly the Obama Administration was wrong in its projections, when it got the Democrat-controlled Congress to pass the stimulus plan back in 2009. Here are the projections, together with actual results through mid-2012:
The actual unemployment rate didn’t return to 5% until September 2015, almost 2 years after Obama’s advisors projected that it would have reached this level even without the stimulus plan.
TKC gave a concrete example of this before he was banned. Small business guys he was consulting with started placing orders for capital equipment upon Trump’s election using assets they’d been sitting on through the Obama years.
Like all good lefties, Obama was throttling back the velocity of money.
It’s also continuing a trend line of down roughly one point per year since 1/10, i.e. about the same as under 7 years of Obama.
In other words, how does this particular statistic show that Trump has done any better than what we would have anticipated had the Obama policies continued for another year under a Clinton administration?
But how do you disprove the null hypothesis between Trump/Republican policies and whatever the economy does? So even if the economy does what you predict how do you know your policies are causal and not coincidental? To me it seems in complex system in which you can’t conduct experiments in, you basically have to assume most correlation observed is do to chance. The other thing is that because the system is so unique you always have one off events to point to, hurricanes, terrorist attacks,wars, etc. Maybe the only real economic knowledge we can get has to be gathered on the scale of decades. This though is inconvenient to politicians wishing to take credit or place blame.
And when you do look at the economy over that timescale you see a long series of booms followed by busts. Capitalism, for all its other virtues, has never been particularly stable.
What worries me is that we seem already overdue for the next recession, and I think one is more likely than not to occur between now and 2020 no matter what Trump does.
I’m not sure exactly how to respond to this except to say that life will pass you by if you’re waiting for proof of things economic.
Economic theory does suggest that deregulation and reduced taxes provide economic stimulus. The policies of Obama and Trump are on opposite poles on those parameters, so it’s pretty clear who is likely to be more responsible for the actual economic growth we are experiencing.
Embrace the power of “and.”