In this Sept. 30, 2012, photo provided by CBS News former House Speaker Newt Gingrich talks on CBS's "Face The Nation" in Washington.
Newt Gingrich said Jack Welch's conspiracy theory about the latest jobs report is "worth looking at" on NBC's Meet the Press Sunday. On Friday, Welch had argued that the Obama administration had doctored the latest job numbers for political reasons.
Though he called this particular theory "plausible but irrelevant" and admitted the report would be a "significant help" to Obama's re-election campaign, Gingrich also said Welch's words are worthy of consideration because they point to a broad public distrust of the current administration.
“It rings true to people ... You have a president of the United States so deeply distrusted by people like Jack Welch ... who is hardly a right-winger," Gingrich said. He added that it was noteworthy that, when positive job numbers were released, "Welch instantaneously assumes this is the Chicago machine."
Former Obama press secretary and current senior adviser Robert Gibbs appeared side-by-side with Gingrich and wasted no time in shooting the "absolutely crazy" theory down.
"The notion, quite frankly, that somebody as well-respected as Jack Welch would go on television and single-handedly embarrass himself—it's incredibly dangerous," Gibbs said. He said any believers in that theory probably "assume that the real jobs report is somewhere safe in Nairobi with the President's Kenyan birth certificate."
Chris Matthews asked the former General Electric CEO to explain where the accusation came from. Welch said:
“All I can talk about are some of the numbers. We had 600,000 government jobs added in the last 2 months. We had 873,000 jobs by a household survey which is a total estimate from 50,000 phone calls. Of those 600,000 were temporary workers. Chris, these numbers are all a series of assumptions. Tons of assumptions. And it just seems somewhat coincidental that the month before the election, the numbers go one tenth of a point below where they were when the president started, although I don’t see anything in the economy that says these surges are true.”
Matthews voiced his suspicion that Welch’s assertions are based in political bias against Obama, not economic concern. He asked Welch what evidence he has that the Obama administration got to the Bureau of Labor Statistics and doctored data. Welch confirmed he hadn’t spoken to any economists, analysts, or accounting specialists:
“I have no evidence to prove that, I just raised the question.”
Matthews wasn’t satisfied; accusing a presidential administration of manipulating data is “Nixon stuff,” that goes beyond raising a question. He gave Welch one last opportunity to walk back the claim. Welch declined, “I don’t take back any part of that tweet.”
Former Commissioner of the Bureau of Labor Statistics Keith Hall dismissed Welch's claim on Friday, tellingThe Wall Street Journal it is "impossible to manipulate labor survey data." Leading economist Jared Bernstein called Welch’s accusation “outrageous;” Secretary of Labor Hilda Solis dubbed it “ludicrous.”
One of the more detailed versions of the case, if you can call it that, was laid out by Fox News' Stuart Varney. Here's Varney's argument:
"There is widespread mistrust of this report and these numbers because there are clear contradictions - 873,000 people said they had found work but only 114,000 new jobs were created. That is a contradiction. If you delve a little deeper and it seems that a lot of these people who found work - that is the 873,000 - if you delve deeply, it turns out that 600,000 of these 873,000 people were part time workers. So they came back into the labor force and they pushed the unemployment rate down to 7.8%. But there is a contradiction here between the number of new jobs created and the number of people saying they found work. It was part-time work Bill, that’s what it was."
Oh how convenient the rate dropped below 8% for the first time in 43 months, five weeks before the election.
So, is there any truth to Varney's theory?
Um, no. Heidi Shierholz, an economist with the liberal-leaning Economic Policy Institute, called the argument "outrageous."
The jobs report is based on two separate surveys: the household survey, which asks people whether they're working, and the payroll survey, which ask employers about their hiring. Shierholz explained that it's not at all unusual that the two surveys differ.
"That happens all of the time," Shierholz said. And even leaving that aside, the 873,000 figure refers to the raw number of people who found work, not including those who lost work. The 114,000 number is the net total—that is, gains minus losses—for the month.
Shierholz said Americans ought to be pleased about the news. "Dropping below 8% is a bright spot," she said. "People would say this would help the incumbent, but honestly, I don't think it matters."
Shierholz isn't the only expert to debunk the conspiracy theory. See other efforts here, here, and here.
The White House is breathing easier this morning. The Bureau of Labor Statistics reports the unemployment rate dropped to 7.8 percent, the first time it’s been under 8 percent in 43 months.
In political terms, headlines are everything— and most major media are leading with the drop in the unemployment rate.
Look more closely, though, and the picture is murkier. According to the separate payroll survey undertaken by the BLS, just 114,000 new jobs were in September. At least 125,000 are needed per month just to keep up with population growth. Yet August’s job number was revised upward to 142,000, and July’s to 181,000.
In other words, we’re still crawling out of the deep crater we fell into in 2008 and 2009. The percent of the working-age population now working or actively looking for work is higher than it was, but still near a thirty-year low.
But at least we’re crawling out.
Romney says we’re not doing well enough, and he’s right. But the prescriptions he’s offering – more tax cuts for the rich and for big companies— won’t do anything except enlarge the budget deficit. And the cuts he proposes in public investments like education and infrastructure, and safety nets like Medicare and Medicaid, will take money out of the pockets of people who not only desperately need it but whose spending is necessary to keep the tepid recovery going.
Romney promises if elected the economy will create 12 million new jobs in his first term. If we were back in a normal economy, that number wouldn’t be hard to reach. Bill Clinton presided over an economy that generated 22 million new jobs in eight years – and that was more than a decade ago when the economy and working-age population were smaller than now.
Both Obama and Romney assume the recovery will continue, even at a slow pace, and that we’ll be back to normal at some point. But I’m not at all sure. “Normal” is what got us into this mess in the first place. The concentration of income and wealth at the top has robbed the vast middle class of the purchasing power it needs to generate a full recovery— something that was masked by borrowing against rising home values, but can no longer be denied. Unless or until this structural problem is dealt with, we won’t be back to normal.
Robert B. Reich, Chancellor’s Professor of Public Policy at the University of California at Berkeley, was Secretary of Labor in the Clinton administration. Time Magazine named him one of the ten most effective cabinet secretaries of the last century. He has written thirteen books, including the best sellers “Aftershock" and “The Work of Nations." His latest is an e-book, “Beyond Outrage.” He is also a founding editor of the American Prospect magazine and chairman of Common Cause.
The nation's unemployment rate dropped to the lowest it has been since early in 2009 in September, providing a potential upbeat talking point for President Barack Obama in the days left before the presidential election.
The Labor Department reported Friday that the unemployment rate fell to 7.8 percent in September, a decline of 0.3 percentage point and the lowest since January 2009. It was the first time the jobless rate has fallen below 8 percent in almost four years.
A survey of households from which the jobless rate is derived showed 873,000 job gains last month, the most since June 1983. The drop in unemployment came even as Americans came back into the labor force to resume the hunt for work. The economy created 114,000 jobs, about as expected.
"Whatever the reason, the president can now say 'I've brought unemployment below 8 percent," said CNBC anchor Brian Sullivan, as the Morning Joe panel tried to analyze the importance of the news.
Bloomberg's Joshua Green points out that aside from the September numbers, the July and August numbers were revised upward. The government said the economy generated 86,000 more jobs in July and August than first estimated.
"The fact that the revisions are upward... that's the trend you're looking for," said Green. "All in all, it's probably good news, but perhaps not enough to overshadow his belly flop in the debate the other night."
For NBC's Chuck Todd, this information might not change voters' minds. "This number has a bigger impact on the tone of the media coverage for a day or two. [According to the latest NBC/Wall Street Journal poll], people have a partisan way of viewing where the economy is. If you're with the president, you already believe that things are looking up and the country is headed in the right direction. If you are with Romney, you think the country is going in the wrong direction. Independents, according to the poll, have tilted to thinking that the economy is getting better."
UPDATE 10:08 a.m. ET: In a statement Friday, Romney said the numbers weren’t good enough.
“This is not what a real recovery looks like,” Romney wrote. “We created fewer jobs in September than in August, and fewer jobs in August than in July, and we’ve lost over 600,000 manufacturing jobs since President Obama took office.”
Saturday is the one year anniversary of President Obama presenting his “American Jobs Act” to Congress, which economists say would have added 2 million jobs, and about half of those almost immediately. The bill failed because every single GOP senator voted against it, and House Republicans refused to even vote on it.
Congress will soon have another chance to pass the bill, but pundits aren't optimistic. In light of Friday’s uninspiring jobs report, Rev. Al Sharpton asked PoliticsNation viewers, “Who are the real job killers?”
Mitt Romney has repeatedly asserted that he’ll be a better job creator than Obama, and Paul Ryan said the tepid jobs report is a result of “failed leadership in Washington and bad fiscal policy.”
Rev. Sharpton found the statement interesting, saying Ryan is part of that failed leadership in the House. He asked Secretary of Labor Hilda Solis where we’d be right now if Congress had passed the “American Jobs Act” a year ago.
She said America’s unemployment situation would be different, and offered a nod of blame to the Tea Party:
“It would have been a million jobs added. Obviously, right now with the rate of unemployment ticked down, we could have had it lower if we could’ve put a million people back to work in infrastructure jobs, construction, but also putting teachers back to work, firefighters…it’s a proposal that Republicans had previously supported. So what we would like to say is that we want the public to notify their members of Congress. The gridlock and obstructionists have been the members of Congress, the new members that have overtaken that party. And we need to say, look, it’s not about what party you’re a part of, it’s about helping our constituents, our grassroots people, people that live in our communities.”
Rev. Sharpton asked Solis, a former member of Congress, why Americans aren’t more outraged by lawmakers actively blocking job-creating changes from being accomplished. She didn’t know, but offered this advice:
“The best thing I can say to you, as the President has told us, is that people need to get the word out. People need to contact their members of Congress and the Senate, because that’s the best persuasive evidence that we have. Contact your members. These proposals aren’t just from Obama, they’re also from Republicans; they make sense. So let’s put these people back to work.”
Long before he became one of the right’s most vocal critics of the idea that government spending could help boost the flagging economy, Rep. Paul Ryan offered a forceful, full-throated defense of stimulus spending — when then-President George W. Bush wanted it in 2002.
Ryan has denounced the 2009 Recovery Act signed by President Obama as “a wasteful spending spree” and “failed neo-Keynesian experiment,” and – as The Huffington Post pointed out this morning — dismissed as “sugar-high economics” the idea that government spending, through measures like payroll tax cuts and unemployment benefits, can help shore up a faltering economy.
Ryan’s comments reveal a strikingly different economic analysis than the one he has become known for in recent years as the “intellectual leader” of the Republican Party and, now, Mitt Romney’s running mate. In 2002, Ryan argued that unemployment would remain at elevated levels even after the economy began to recover, and that aggressive stimulus would be a necessary and effective antidote.
“What we're trying to accomplish here is the recognition of the fact that in recessions, unemployment lags on well after a recovery has taken place,” Ryan said at the time. “We have a lot of laid-off workers, and more layoffs are occurring. And we know, as a historical fact, that even if our economy begins to slowly recover, unemployment is going to linger on and on well after that recovery takes place.”
Ryan’s advocacy of stimulus spending wasn’t limited to Washington, either. When he returned home to face constituents, he used similar language to make the case for the Bush stimulus bill. “You have to spend a little to grow a little,” Ryan told constituents at a town hall in Wisconsin in January 2002, according to the Journal-Times, a local newspaper. “What we're trying to do is stimulate that part of the economy that's on its back."
And as New York Magazine’s Jonathan Chait pointed out this morning, Ryan made the case for Keynesian stimulus in the form of income tax cuts in 2001, arguing for tax cuts that were “fast, deeper, retroactive to January 1st, to make sure we get a good punch into the economy, juice the economy to make sure that we can avoid a hard landing.”
Republicans have also repeatedly mocked calls by congressional Democrats to include renewed economic stimulus spending, such as a payroll tax holiday, as part of plans to reduce the deficit. Democrats have argued that short-term stimulus spending would help produce long-term revenue by boosting economic growth. Ryan has criticized that thinking, but in his 2002 remarks, he made exactly the same case: that short-term stimulus spending would produce budget surpluses.
“We've got to get the engine of economic growth growing again, because we now know because of recession, we don't have the revenues that we wanted to, we don't have the revenues we need, to fix Medicare, to fix Social Security. To fix these issues we've got to get Americans back to work,” Ryan said. “Then the surpluses come back, then the jobs come back. That is the constructive answer we're trying to accomplish here on, yes, a bipartisan basis.”
Ryan also argued in 2002 for helping workers pay for their health insurance and extending unemployment benefits. Since Obama has been in office, Ryan has voted against extending unemployment insurance.
“It's more than just giving someone an unemployment check,” Ryan said of the Bush stimulus bill. “It's also helping those people with their health insurance while they've lost their jobs and more important than just that unemployment check, it's to do what we can to give people a paycheck.”
Ryan called such measures “time-tested, proven, bipartisan solutions to get businesses to stop laying off people, to hire people back, and to help those people who have lost their jobs,” and urged congressional Democrats to break ranks and join Republicans in supporting the president’s plan.
“I've just recently read in our local Capitol Hill newspaper that members from the majority party in the other body want stimulus. They're breaking with their party leadership and asking for stimulus legislation to pass because in their home states they have a lot of people who are losing their jobs,” Ryan said. “I urge members to drop the demagoguery and to pass this bill to help us work together to get the American people back to work and help those people who've lost their jobs.”
:: Sal Gentile is segment & digital producer for Up w/ Chris Hayes. Follow him on Twitter at @salgentile. ::
While many economists celebrated today’s better-than-expected jobs report as a sign the US is ramping up its sluggish recovery and President Obama’s efforts are working, Mitt Romney called the report a ‘hammer-blow’ to the middle class.
Clearly, there's plenty of room for improvement, but the economy added 163,000 jobs in July, the 29th consecutive month of job growth. So what would Romney be doing differently? We got some insight earlier this week when former Bush economic advisor/current Romney economic advisor Glenn Hubbard wrote in the Wall Street Journal that Romney’s plan will add 12 million jobs in his first term alone, using trickle-down “job creating” policies.
On Friday’s PoliticsNation, Rev. Al Sharpton asked US Secretary of Labor Hilda Solis if Hubbard’s projection is realistic, given the types of policies he promotes. Solis echoed the sentiments of economists who believe Bush’s policies were a mistake we can’t afford to make again:
“If we continue down this same path that he wants to propose, and that’s to give tax breaks to the very wealthy and not close any loopholes and not look at the desire to bring jobs back home, not making those good investments in our safety system...I just don’t see us going down a good path. I think we stick with the President’s plan that he’s offered and we get the Congress to act. We have some proposals that have been sitting up there for 10 months that could create a million jobs right now in construction, just through infrastructure development alone, and putting money back in for our teachers and our firefighters. Those are good middle class jobs. I’ve heard nothing elaborated by Romney about looking at the most vulnerable, and that’s the middle class families who’ve been hit the hardest.”
Rev. Al pointed out we shouldn’t be taking advice from Glenn Hubbard in the first place. Hubbard served as chairman of Bush’s economic advisory council – over Bush’s two terms, the private sector lost 673,000 jobs.
It's been three years, as of Tuesday, since Congress last raised the federal minimum wage. And many advocates for the poor say that with low-wage workers struggling, it's time to do it again.
A group of prominent liberal-leaning economists including Joseph Stiglitz, Jeffrey Sachs, Laura Tyson, and Robert Reich sent a letter Monday to congressional leaders urging them to raise the minimum wage from its current level of $7.25 per hour to $9.80 by 2014. "At a time when persistent high unemployment is putting enormous downward pressure on wages, such a minimum wage increase would provide a much-needed boost to the earnings of low-wage workers," the group wrote.
Stiglitz is a former chief economist for the World Bank, Sachs runs Columbia University's Earth Institute, Tyson served as President Clinton's top economic adviser, and Reich served as Clinton's Labor Secretary.
Sen. Tom Harkin and Rep. George Miller, Democrats from Iowa and California respectively, have introduced measures to raise the minimum wage to $9.80. But President Obama hasn't made the issue a priority. Mitt Romney, meanwhile, has twisted himself in knots on the subject, first saying he supports indexing the minimum wage to inflation, then backing down after an outcry from conservatives.
A coalition of liberal and labor groups is organizing rallies Tuesday in support of a raise, in 30 cities across the country. Some rallies will target companies owned by Bain Capital, the private-equity firm founded by Romney.
A raise wouldn't just benefit the roughly 20 million American workers who make the current minimum, supporters argue. "Another nearly 9 million workers whose wages are just above the new minimum would likely see a wage increase through 'spillover' effects, as employers adjust their internal wage ladders," the economists wrote in the letter to Congress.
Advocates of a raise note that the value of the minimum wage has steadily declined in recent decades. In 1968, it was worth over $10 in 2012 dollars, almost one third more than it is today, according to the chart below, which was compiled by the National Employment Law Project (NELP), a labor-backed group.
Opponents argue that the move would raise the cost of hiring for employers, especially small businesses, exacerbating the unemployment problem. But in their letter, organized by the Economic Policy Institute, a liberal Washington think tank, the economists noted that "the weight of evidence now show[s] that increases in the minimum wage have had little or no negative effect on the employment of minimum wage workers, even during times of weakness in the labor market."
Indeed, they added, a raise would likely stimulate the economy and boost job growth, because low-income workers have little choice but to spend new income, rather than save it.
In addition, new data compiled by NELP (pdf) show that two out of three low-wage workers are employed not by small businesses but by large corporations. Most such corporations have recovered from the Great Recession and are in strong financial positions, NELP's data show.
In light of Friday’s crummier-than-expected jobs report, Hardball’s Michael Smerconish spoke to two of the country’s most knowledgeable economists, former chief economist to Vice President Biden, Jared Bernstein, and former Clinton Labor Secretary Robert Reich about how President Obama should proceed from here.
Here’s the framework: no president since the Great Depression has been re-elected with an unemployment rate above 7.4%. As we learned today, we’re stuck at 8.2%. Smerconish asked Robert Reich, “Is it time for the president to put aside the 9-iron and bring out the driver? Does he need to do something more bold, relative to the economy?”
Reich knows his stuff. He said:
“I think so, Michael. He was dealt a terrible hand, the worst economy since the Great Depression. Though, he’s going to have to say something more than 'we’re making progress, it’s slow progress, I was dealt a bad hand.' He’s got to be a bit bolder. He could say, if I get the votes…we’re going to have a new works progress administration, a civilian conservation core. We’re going to rebuild the nation’s infrastructure. We’re going to rebuild education. We are going to have a first class nation in every respect, and we’re going to fight and keep fighting for average working people.
The president can say, what about a middle class tax cut, what about exempting the first $20,000 of income from the Social Security Payroll Tax. He can say, I, the president of the United States, am not going to stop making new proposals simply because the Republicans say no.”
Jared Bernstein agreed:
“I think that’s precisely the kind of thing the president should talk about. Now, he doesn’t need to introduce, necessarily, a bunch of new things. He can say, absolutely correctly, I’ve got ideas that I’ve been trying to promote on Capitol Hill for well over a year and some of them are just really good common sense. For example, we know that last month we shed 14,000 jobs in local education. 23 of the last 25 months, the public sector has shrunk. Now, you should go forward at a time like this and say, folks, these are your teachers, these are your police, these are your firefighters…the president has to explain to people who is standing directly between them and a better economy, better opportunities and more jobs – and that would be the Congress.”
Director Marc Levin doesn’t intend to let politicians, the media, or the gainfully employed forget about their unemployed neighbors.
Levin’s new documentary, Hard Times: Lost on Long Island (trailer after jump), interviews the long-term unemployed in Levittown, N.Y., a city of about 50,000 known as one of the first successful post-World War II modern suburban enclaves. The Nassau County city had a median family income in excess of $90,000; only 2.5% of its residents lived below the federal poverty rate; and a home ownership rate of 91%, according to the latest U.S. Census.
The personal stories in the film contradict the narrative that the unemployed aren't trying hard enough to find new jobs. Many in the film also describe their depression and anxiety over their unemployment.
"Having cancer was easier than being unemployed," says one.
"What we want are jobs. What we need are jobs," says another.
“We’ve heard so much mischaracterization of the people who are out of work—the moocher class, people who are lazy. ‘It’s them, it’s not us,’” Levin said on Morning Joe Thursday. “So here you’re going to neighborhoods that look beautiful, that we’d all like to live in, grow up in—nice houses, nice cars. And yet, behind those doors people are collapsing inside, disappearing really. The idea was a snapshot that would humanize these [unemployment] statistics that we repeat over and over, but also break down, ‘It’s them; it’s somebody else.’ No, it’s your neighbor, your friend, it’s your family—it’s us.”
The U.S. unemployment rate is expected to stay above 6% for the next four years, according to the majority of economists surveyed by the Associated Press in its latest Economy Survey. That analysis arrives ahead of Friday’s monthly jobs report from the federal government, which is expected to show around 100,000 jobs created—not enough to put a dent in 8.2% national unemployment rate.
Levin noted that the people interviewed in Hard Times “internalize the blame,” and don’t discuss their plight with friends, or even family, because of their shame. “It’s almost as if these people have disappeared,” he said. “Sometimes their neighbors don’t even know…It’s human capital that’s going to waste.”
“Let’s call bullsh*t bullsh*t,” Boehner told fellow House Republicans. “This election is about jobs, jobs, jobs.”
Right after riling up the troops with this motivational jobs speech, Boehner dug into the day’s business: trying to pass an abortion bill. The Prenatal Nondiscrimination Act (PRENDA) sought to make it a federal crime to perform or force a woman to have a gender-based abortion. Gender-based abortions are common in some Asian countries, but not so much here in the U.S. of A.
Nobody was too surprised when the House rejected PRENDA, including the bill’s author, Arizona Republican Rep. Trent Franks. Before Thursday’s vote, Franks admitted to the Washington Post he knew the measure would probably fail, but that he believed Republicans were “doing the right thing strategically” by forcing Democrats to vote against it.
Excellent use of time. Even better? They’re not giving it up. Franks hinted the measure could come back up in the future under another order.
Rachel wasn’t impressed.
“Yesterday’s defeat of the big Trent Franks anti-abortion bill was all part of Republicans’ master plan to keep the focus of the Congress on jobs, by which I mean abortion,” she said.