Recommended by Ricochet Members Created with Sketch. The Crisis of Low Unemployment and High Wages

 

The Washington Post has a story about the aging population in Maine, and I was struck by the following paragraph (emphasis mine):

“Across Maine, families like the Flahertys are being hammered by two slow-moving demographic forces — the growth of the retirement population and a simultaneous decline in young workers — that have been exacerbated by a national worker shortage pushing up the cost of labor. The unemployment rate in Maine is 3.2 percent, below the national average of 3.7 percent.”

Wow. So the Washington Post apparently believes that supply and demand works, which makes one wonder how they support the economic policies of the Democrat party. But it also brought something else to mind:

During the Bush years, the economy grew nicely, but job growth was relatively flat, so the leftist media called it, “a jobless recovery.” With Obama, the economy tanked and unemployment skyrocketed. So many people dropped out of the workforce that the Obama administration started coming up with new ways to compile unemployment statistics, to make it sound less dire. The media tried to ignore the economy and unemployment, and focused instead on Obama ‘promoting moderate tax increases on the wealthy to pay for healthcare for all.’ Now, with Trump, the economy is growing and unemployment is falling. So rather than praise low unemployment and high wages, the media complains of “a national worker shortage pushing up the cost of labor.” Of course, the left also claims to want full employment for all workers, and higher wages, so you would think this would make them happy. This is all so confusing.

So if President Bernie Sanders institutes full employment and high wages via executive order, that’s good. That’s fair. That’s healthy. That’s also impossible, but forget that for a moment.

But if capitalism creates lower unemployment and higher wages, that’s a crisis.

It must be tough being a journalist. Keeping track of your unbiased objectivity, as it changes like the seasons. As the graph above demonstrates, American voters continue to figure out that the economy is doing better and better. It’s becoming so obvious that it’s being noticed by more people every day. So the media must work harder and harder, and look more and more ridiculous, trying to find negative slants on good news. Like the horror of low unemployment and high wages.

Don’t get me wrong; I know that there are some downsides to low unemployment. But this is just absurd. Why does anyone get their information from these clowns anymore?

The problem is, a representative republic doesn’t work without a functioning media. If the voters don’t have good information, how can they make good decisions? It’s almost as if the left didn’t want our voters to make good decisions. But of course, that’s ridiculous. Right?

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There are 27 comments.

  1. Stina Inactive

    Scale back welfare should be step #2.

    Will it happen? I doubt it. They’ll increase immigration first… which means welfare will never be scaled back.

    • #1
    • August 20, 2019, at 12:46 PM PST
    • 4 likes
  2. Arthur Beare Member

    Dr. Bastiat

    It’s almost as if the left didn’t want our voters to make good decisions. 

    Of course the left wants us to make good decisions. Its just that their idea of a good decision and your idea of a good decision are rather different.

    The press is merely trying to bring lost sheep such as yourself back into the fold.

    • #2
    • August 20, 2019, at 12:47 PM PST
    • 5 likes
  3. KentForrester Coolidge

    Doc, your comment about people’s inability to make good decisions when the stories they hear come from a terribly biased MSM rings true to me. In fact, that phenomenon may be the most serious downside to the Trump years.

    It’s been sad to watch the most of the media decline in their most important role: the dissemination of objective news stories about politics.

    I was watching CNN at the gym the other day. It was one anti-Trump story after another. That’s all they seemed to know. Sometimes a story had no real connection to Trump, but CNN would twist the story just so that it could get in a hit on Trump. The station has become a scandal. I would be embarrassed to be employed by CNN.

    CNN is not alone. MSNBC may be even worse. 

    • #3
    • August 20, 2019, at 1:04 PM PST
    • 5 likes
  4. Dr. Bastiat Member
    Dr. Bastiat Post author

    KentForrester (View Comment):

    I would be embarrassed to be employed by CNN.

    CNN is not alone. MSNBC may be even worse. 

    How much better is NBC? Or CBS? Or The New York Times? Or any of the rest of them?

    • #4
    • August 20, 2019, at 1:13 PM PST
    • 2 likes
  5. Old Buckeye Member

    “…so you would think this would make them happy.”

    If there’s one thing that’s become obvious to me about the left, it’s that they’re never happy. Give them what they ask for and they immediately launch the next crusade for something else. 

    • #5
    • August 20, 2019, at 1:22 PM PST
    • 6 likes
  6. Henry Castaigne Member

    According to Steven Pinker. Most intellectuals hate progress and intellectuals who call themselves progressive really hate progress.

     

    • #6
    • August 20, 2019, at 1:30 PM PST
    • 8 likes
  7. Full Size Tabby Member

    KentForrester (View Comment):

    I was watching CNN at the gym the other day. It was one anti-Trump story after another. That’s all they seemed to know. Sometimes a story had no real connection to Trump, but CNN would twist the story just so that it could get in a hit on Trump. The station has become a scandal. I would be embarrassed to be employed by CNN.

     

    You would be embarrassed, but only because you know more than the typical CNN employee because you have contact with a wider range of people and ideas than does the typical CNN employee. I suspect the typical employee has such a narrow range of contacts that the employee is unaware that there are people with functioning brains who are not completely anti-Trump.

    I still remember hearing from a person who had spoken to an audience of news media employees a few years ago, and discovered (via hand poll of the audience) that few to none of them had any contact with large segments of society (in that case specifically people who attended church regularly). 

    • #7
    • August 20, 2019, at 1:36 PM PST
    • 4 likes
  8. Vance Richards Member

    Russia . . . no but Obstruction . . . darn, what about Racism . . . OK, OK . . . how about crisis level Prosperity?

    • #8
    • August 20, 2019, at 2:29 PM PST
    • 5 likes
  9. David Foster Member

    It is remarkable how *little* most media people actually know. I’ve repeatedly observed articles about energy written by people who don’t grasp that a Kilowatt and a Kilowatt-Hour are two entirely different things, pretty important if you’re talking about energy storage in the context of “renewable” energy sources. Business media isn’t much better than the general media on this.

    Even the WSJ, in a recent article about the Boeing 737 Max 8, confused “Altitude” and “Attitude” when discussing the MCAS activation criteria.

    • #9
    • August 20, 2019, at 3:10 PM PST
    • 5 likes
  10. JoelB Member

    The quality of the propaganda is suffering -misspelling, poor grammar, and even photographs that depict something obviously other than what they are captioned to be. A downside of low unemployment is that it’s hard to get good help.

    • #10
    • August 20, 2019, at 4:53 PM PST
    • 4 likes
  11. DonG Coolidge

    JoelB (View Comment):

    The quality of the propaganda is suffering -misspelling, poor grammar, and even photographs that depict something obviously other than what they are captioned to be. A downside of low unemployment is that it’s hard to get good help.

    Profits are down in the news business. Nobody is waiting around to watch ads for something that broke on Twitter hours ago. The average age of evening news viewers is nearly 70. Low income means low spending, so news gathering now consists of “reporters” watching Twitter trends, which further cements the fact that news organizations provide no value beyond Twitter. The bias and fake news are symptoms of a death spiral. Buh-bye.

    • #11
    • August 20, 2019, at 7:34 PM PST
    • 2 likes
  12. Jon1979 Lincoln

    Dr. Bastiat: The problem is, a representative republic doesn’t work without a functioning media. If the voters don’t have good information, how can they make good decisions? It’s almost as if the left didn’t want our voters to make good decisions. But of course, that’s ridiculous. Right?

    A lot of this is why do people come to media, is media the same all over, and does the public perceive and act that way? Inside-the-Beltway media had become completely politicized because of the national ideological implications, and even media at the bigger state capitols around the country has fallen victim to this, as the people who gravitate to those locations don’t care as much anymore about simply reporting the news as they do about shaping what their readers think about the news.

    But even the famously liberal New York City media has an adversarial relationship with Bill de Blasio — they’re perfectly willing to report on his incompetence and corruption, even though they’re in ideological sympathy with most of his goals, in part because the negative outcomes of his actions are negatively affecting their own quality of life (plus they don’t see any Rudy Giuliani around the corner and figure some Democrat’s still going to be mayor in 2022). And you can point around the country to major stories where the national media was all-in on reporting The Narrative, but the local media actually reported the news — the Miami Herald revealed the failures of the Broward County Sheriff’s Department at Stoneman Douglas High School a day after CNN held their Spanish Inquisition town hall with Sheriff Israel, and local Chicago media outlets got to the truth about the Jussie Smollett assault, when the national media outlets were ready to buy the hoax hook, line and sinker.

    There is still good reporting going on around the country. But the ideologues and talking heads in D.C. and other selected locations have really done a job in poisoning everyone’s reputation. And people still need to know about local issues.

    • #12
    • August 21, 2019, at 4:26 AM PST
    • 3 likes
  13. I Walton Member

    Lets congratulate them for finally being honest. If you want good domestic help you have to crowd them fairly close to expensive housing and provide cheep transport. Unfortunately low unemployment and growing wages erodes the supply and requires a steady influx of new unskilled workers. So if that inflow slows down we have to go back to higher unemployment and lower wages. The latter works better because they already know some english and where you keep the sheets.

    • #13
    • August 21, 2019, at 5:02 AM PST
    • 1 like
  14. Paul Erickson Member

    Old Buckeye (View Comment):

    “…so you would think this would make them happy.”

    If there’s one thing that’s become obvious to me about the left, it’s that they’re never happy. Give them what they ask for and they immediately launch the next crusade for something else.

    Exactly. I think that’s what they mean by “progressive.” It literally (and I mean literally, not Joe-Biden-ly) never stops.

    • #14
    • August 21, 2019, at 5:18 AM PST
    • 1 like
  15. Old Bathos Member

    Henry Castaigne (View Comment):

    According to Steven Pinker. Most intellectuals hate progress and intellectuals who call themselves progressive really hate progress.

     

    I think lefties hate innovation and change because it makes central planning impossible not just impossiblt to effect but harder to sell asa political model. When communists stalled the economies of Eastern Europe and Russia for half a century, the real problem was the success of free market economies outside the bloc. The whole idea of a reality that does not fit neatly inside the head of a narcissist is the enemy of progressives.

    • #15
    • August 21, 2019, at 8:10 AM PST
    • 4 likes
  16. Old Bathos Member

    Old Buckeye (View Comment):

    “…so you would think this would make them happy.”

    If there’s one thing that’s become obvious to me about the left, it’s that they’re never happy. Give them what they ask for and they immediately launch the next crusade for something else.

    It is not about being ‘happy’. The revolution hates what is in favor of what is supposed to be. Whatever happens is always a defect that needs to be destroyed in favor of some new malleable ideal. Every institution, belief, tradition, value that threatens to bind people to each other instead of loyalty to the revolution is the enemy. And the revolution derives from the tensions of self-loathing and narcissism to create an appetite for “change” and hatred of everything one is no longer able to affirm and enjoy.

    • #16
    • August 21, 2019, at 8:16 AM PST
    • 2 likes
  17. Henry Castaigne Member

    Old Bathos (View Comment):
    w York City media has an adversarial relationship with Bill de Blasio — they’re perfectly willing to report on his incompetence and corruption, even though they’re in ideological sympathy with most of his goals, in part because the negative outcomes of his actions are negatively affecting their own quality of life (plus they don’t see any Rudy Giuliani around the corner and figure some Democrat’s still going to be mayor in 2022). And you can point around the country to major stories where the national media was all-in on reporting The Narrative, but the local media actually reported the news — the Miami Herald revealed the failures of the Broward County Sheriff’s Department at Stoneman Douglas High School a day after CNN held their Spanish Inquisition town hall with Sheriff Israel, and local Chicago media outlets got to the truth about the Jussie Smollett assault, when the national me

    Forgive me for overusing this cartoon but it is never not relevant. 

    want this that burn ground

    • #17
    • August 21, 2019, at 10:00 AM PST
    • 2 likes
  18. Valiuth Member

    Imagine a pool with a hose dispensing water at a slow and steady rate over the course of three months. In the first month the pool is barely filled, and people walking by say this thing is useless barely a puddle what is Joe the pool manager doing. So they fire Joe and hire Matt. They come back at the end of the second month and see the pool is filled enough to swim in and everyone is happy, and based on that success Matt get a promotion, and apoints Tom to me pool manager. At the end of the third month the pool is overflowing and flooding the surrounding buildings and everyone blames Tom for the disaster. 

    And this is how people talk about the economy and presidents. With nothing but correlation and large amounts of personal bias, formed by anecdotes. Fundamentally nothing about the economic trends under Obama or Bush have changed in the Trump years. As far as I can see we are just now at a happy point in the pool scenario. GDP growth isnt significantly better than it was under Obama, and the rate of job creation is the same we have just burned through the surplus finally.

    Once you run out of workers though how will you get new business going? Once your unemployment reaches rock bottom it has nowhere to go but up. 

    • #18
    • August 21, 2019, at 11:59 AM PST
    • 1 like
  19. Old Bathos Member

    Valiuth (View Comment):

    Imagine a pool with a hose dispensing water at a slow and steady rate over the course of three months. In the first month the pool is barely filled, and people walking by say this thing is useless barely a puddle what is Joe the pool manager doing. So they fire Joe and hire Matt. They come back at the end of the second month and see the pool is filled enough to swim in and everyone is happy, and based on that success Matt get a promotion, and apoints Tom to me pool manager. At the end of the third month the pool is overflowing and flooding the surrounding buildings and everyone blames Tom for the disaster.

    And this is how people talk about the economy and presidents. With nothing but correlation and large amounts of personal bias, formed by anecdotes. Fundamentally nothing about the economic trends under Obama or Bush have changed in the Trump years. As far as I can see we are just now at a happy point in the pool scenario. GDP growth isnt significantly better than it was under Obama, and the rate of job creation is the same we have just burned through the surplus finally.

    Once you run out of workers though how will you get new business going? Once your unemployment reaches rock bottom it has nowhere to go but up.

    Yes and no. Presidents do not have a lot of power to grow the economy but they can interfere with growth. Carter urged us to suck it up and accept inflation, geopolitical and economic decline and the oil embargo. Not being Carter was half of the Reagan success. Obama seemed to revel in regulatory growth, a vague hostility to markets, entrepreneurship and wealth in general. Not being Obama was a big part of the Trump recovery. Clinton signalled he would not swing the pendulum in the usual tax and regulate direction expected from a Democrat and had a great economic run for most of his two terms.

    The problem with the hose analogy is that it is really about a lot of hoses whose owners can regulate the flow of what they invest towards raising the pool. And their collective attitudes actually matter. And presidents can affect that.

    • #19
    • August 21, 2019, at 12:10 PM PST
    • 1 like
  20. Valiuth Member

    The hose analogy is obviously simplistic I admit. The problem I have is that I dont see a Trump recovery as distinct from what came before. If you look at the data I dknt think an inflection point can be made between Obama economy and Trump economy. Clearly they have different attitudes and policies. But can we actually demonstrate a causal effect? Growth in 2018 hit 3% or better in some quarters, but in 2014 or 2015 Obama also saw over 3% growth in some quarters as well. 

    Reagan had some major policy shifts from the economic policies of the 70s. And sustained growth wasn’t seen until 83 if I recall. But he also had the benefit of the mass incorporation of women in the work place which became a real force in the 80s. Frankly, it seems to me that starting with Bush in 2000 to today the American economy has basically been on a stable glide path with respect to fundamentals and trends. Somethings ran their course and we had the great recession. Which created serious set back, but that shifted the baseline not the trend. 

    Reagan I think could be argued to have shifted the trend. I’m not sure we can say that about any president after him. Can we? 

    • #20
    • August 21, 2019, at 12:56 PM PST
    • 1 like
  21. Old Bathos Member

    Valiuth (View Comment):

    The hose analogy is obviously simplistic I admit. The problem I have is that I dont see a Trump recovery as distinct from what came before. If you look at the data I dknt think an inflection point can be made between Obama economy and Trump economy. Clearly they have different attitudes and policies. But can we actually demonstrate a causal effect? Growth in 2018 hit 3% or better in some quarters, but in 2014 or 2015 Obama also saw over 3% growth in some quarters as well.

    Reagan had some major policy shifts from the economic policies of the 70s. And sustained growth wasn’t seen until 83 if I recall. But he also had the benefit of the mass incorporation of women in the work place which became a real force in the 80s. Frankly, it seems to me that starting with Bush in 2000 to today the American economy has basically been on a stable glide path with respect to fundamentals and trends. Somethings ran their course and we had the great recession. Which created serious set back, but that shifted the baseline not the trend.

    Reagan I think could be argued to have shifted the trend. I’m not sure we can say that about any president after him. Can we?

    Again, I think the issue is mostly whether a president follows a president who had a negative effect. Being not-Carter or not-Obama would produce an uptick by itself. I agree that there is a hell of a lot going on that presidents don’t control and there are larger cycles at play and there are relatively few distinct before and after tick marks corresponding to policy changes.

    • #21
    • August 21, 2019, at 3:37 PM PST
    • 3 likes
  22. Valiuth Member

    Old Bathos (View Comment):
    Again, I think the issue is mostly whether a president follows a president who had a negative effect. Being not-Carter or not-Obama would produce an uptick by itself. I agree that there is a hell of a lot going on that presidents don’t control and there are larger cycles at play and there are relatively few distinct before and after tick marks corresponding to policy changes.

    But that is the thing, can we say Obama had a “negative” effect. Can we demonstrate that. Because to me it seems a lot of the feeling that Obama was holding the economy back is based on the assumption that a higher growth and recovery rate was possible. But, honestly I don’t know how I would prove that. Are we just appealing to “intuition”? And if that is the case then isn’t it very likely that we are just projecting our political feelings on to the economy? In other words if the president is from a politically disfavored party do we see the economy as more negative. I believe there is quite a bit of social science data showing that people’s views of the economy do correlate with their political affiliations. So that Republicans generally think the economy is worse under Democrats and likewise Democrats think it is worse under Republicans. But that is no way to judge things, that is essentially arbitrary. 

     

     

    • #22
    • August 22, 2019, at 6:08 AM PST
    • Like
  23. Jon1979 Lincoln

    Valiuth (View Comment):

    Old Bathos (View Comment):
    Again, I think the issue is mostly whether a president follows a president who had a negative effect. Being not-Carter or not-Obama would produce an uptick by itself. I agree that there is a hell of a lot going on that presidents don’t control and there are larger cycles at play and there are relatively few distinct before and after tick marks corresponding to policy changes.

    But that is the thing, can we say Obama had a “negative” effect. Can we demonstrate that. Because to me it seems a lot of the feeling that Obama was holding the economy back is based on the assumption that a higher growth and recovery rate was possible. But, honestly I don’t know how I would prove that. Are we just appealing to “intuition”? And if that is the case then isn’t it very likely that we are just projecting our political feelings on to the economy? In other words if the president is from a politically disfavored party do we see the economy as more negative. I believe there is quite a bit of social science data showing that people’s views of the economy do correlate with their political affiliations. So that Republicans generally think the economy is worse under Democrats and likewise Democrats think it is worse under Republicans. But that is no way to judge things, that is essentially arbitrary.

     

     

    There is some confirmation bias involved. But when you look at the change, say, from Reagan to Carter, there’s no doubt that what Reagan did in the 1981-82 period fueled the recovery that followed from Carter’s stagflation period.

    Obama’s economy wasn’t Carter’s economy, as some people on the right might want to say — things did improve from 2009, mainly in urban areas. But Obama’s regulatory actions did seem to depress overall economic growth. That changed in the past 2 1/2 years, simply by Trump getting the government the hell out of the way and not attempting to micromanage the economy.

    • #23
    • August 22, 2019, at 6:17 AM PST
    • 1 like
  24. Old Bathos Member

    Valiuth (View Comment):

    Old Bathos (View Comment):
    Again, I think the issue is mostly whether a president follows a president who had a negative effect. Being not-Carter or not-Obama would produce an uptick by itself. I agree that there is a hell of a lot going on that presidents don’t control and there are larger cycles at play and there are relatively few distinct before and after tick marks corresponding to policy changes.

    But that is the thing, can we say Obama had a “negative” effect. Can we demonstrate that. Because to me it seems a lot of the feeling that Obama was holding the economy back is based on the assumption that a higher growth and recovery rate was possible. But, honestly I don’t know how I would prove that. Are we just appealing to “intuition”? And if that is the case then isn’t it very likely that we are just projecting our political feelings on to the economy? In other words if the president is from a politically disfavored party do we see the economy as more negative. I believe there is quite a bit of social science data showing that people’s views of the economy do correlate with their political affiliations. So that Republicans generally think the economy is worse under Democrats and likewise Democrats think it is worse under Republicans. But that is no way to judge things, that is essentially arbitrary.

    I don’t want to wax on about “animal spirits” but when our collection real-time intuition is such that it affects investment, borrowing and consumer spending such that there are empirically visible quantitative changes in the economy as a whole, then that which affected that intuition must get some credit for the change. The problem with Obama was not just that there was a demonstrably hostile regulatory climate, a constrictive energy policy and a gratuitous denigration of small business concerns but a projection that these downers were likely to persist and even intensify.

    I worked as an industry lobbyist for ten years and I can tell you that news and professional analyses about pending regulatory, legislative and judicial outcomes have an enormous impact on the shared outlook of leaders within particular industries. Decisions about expansion, mergers, upgrades, new product lines, risk & debt etc are directly affected.

    • #24
    • August 22, 2019, at 6:29 AM PST
    • 4 likes
  25. The Reticulator Member

    Old Bathos (View Comment):
    When communists stalled the economies of Eastern Europe and Russia for half a century, the real problem was the success of free market economies outside the bloc. The whole idea of a reality that does not fit neatly inside the head of a narcissist is the enemy of progressives.

    That’s why we need global, one-world government. Then there will be no alternatives to compete with socialism.

    • #25
    • August 23, 2019, at 3:57 PM PST
    • 3 likes
  26. Henry Castaigne Member

    The Reticulator (View Comment):

    Old Bathos (View Comment):
    When communists stalled the economies of Eastern Europe and Russia for half a century, the real problem was the success of free market economies outside the bloc. The whole idea of a reality that does not fit neatly inside the head of a narcissist is the enemy of progressives.

    That’s why we need global, one-world government. Then there will be no alternatives to compete with socialism.

    Eventually, leftwingers wish to destroy what is good rather than create something good. 

    • #26
    • August 23, 2019, at 4:30 PM PST
    • Like
  27. Valiuth Member

    Jon1979 (View Comment):
    But Obama’s regulatory actions did seem to depress overall economic growth. That changed in the past 2 1/2 years, simply by Trump getting the government the hell out of the way and not attempting to micromanage the economy.

    But that is the thing. Economic growth in the last 2 1/2 years isnt comparably different. The economic growth from 2014 to 2017 basically looks identical to that from 2017 to 2019. Just look up quarterly GDP growth. Unemployment goes down over that time at a steady rate as well. If you didn’t know anything about who was president or when a change of leadership took place you couldn’t pick out any transition point. 

    And about not micromanaging the economy I just dont see that. He is just stepping on a different aspect of it. Namely trade and immigration. So while loosening the grip with the left hand he is strangling the economy with the right. Again, this just seems like alot of arbitrary hair spliting. Trumps best economic growth so far has been no better than what Obama achieved. It’s all in the data. And appeals to feelings and animal spirits just seem like motivated reasoning. 

    • #27
    • August 23, 2019, at 6:27 PM PST
    • Like