The DNCs's OFA is sending around this chart, above, to demonstrate how the Obama administration has turned around the employment situation since taking office. And the chart rightly shows how the number of jobs lost each month increased under the last year of Bush, and decreased under Obama. But something seemed wrong, so I asked our resident economist, Professor Steven Kyle of Cornell, to take a look at this chart. Here's what he said:
It is a good illustration of exactly what many of us economists have been saying - the stimulus was big enough to stop the job loss, but not big enough to put all those unemployed people back to work again. So, if we switch to "deficit reduction mode," as the President has said, and start cutting spending, there is a very real danger of slipping back into a recessionary dynamic (i.e., downward momentum could get reestablished - at the moment we are sort of just staggering along, neither here nor there).Steve's point: This isn't an unemployment graph, it's a "job loss" graph. So even though we're back to zero, we're still at 9.7% unemployment. So we've stopped the hemorrhaging, for now, but we haven't fixed the problem. A larger stimulus would have saved/created more jobs. And cutting spending could very well put us back into a recession, cutting even more jobs.
What I find puzzling is that the Administration apparently seems to think that cutting spending is a bigger political winner than getting people jobs. No reading of the data I have ever seen would support that. And to the extent that some people DO like cutting deficits, it is irrelevant, because those types aren't going to vote for a Democrat anyway.
I guess infrastructure just isn't sexy enough. Who gets excited about repairing bridges? (Apart from the guys who get jobs to do it, that is.)
