Friday, August 3, 2012

Obama's job "creation": The new math

The president has several recurring themes in his stump speeches. One of them is that he has "created" 4.4 million jobs. I am not going to revisit my earlier posts on why the government cannot create jobs but it is obvious that the president is either deliberately misleading or just ignorant (or a combination of the two). First, the misleading part is that saying he created 4.4 million jobs is akin to my saying that since I started dieting I have lost 450 pounds. Of course, during that time I have also gained 451 pounds leaving my weight at 205. The same is true for job creation. Since Obama has been in office, the total number of jobs in the economy is a half million less. So the job creation has not kept up with the job destruction. The ignorant part is that president apparently does not know that job creation is the norm not the exception for the economy. It is rare indeed for a month to go by in which people are not hired. The 4.4 million jobs created over the past 28 months equates to 156,000 jobs per month. Yet to wide out all the jobs destruction, the economy would need to create 204,000 jobs per month for the next two years just to get back to the employment level when Obama took office. So if the president wants credit that he has "created" 4.4 million jobs, then he also shoulders the blame for having destroyed 4.9 million jobs.

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