Intermission Time at the Job-Demolition Derby

Slate's Daniel Gross beat me to the punch with a mid-term review of W's record of creative destruction in nonfarm payroll employment.

In the 22 months since President Bush signed his tax cuts in June 2001, the number of payroll jobs has fallen from 132.11 million to 130.41 million in March 2003. In other words, the biggest tax cut in American history has so far "cost" us 1.7 million jobs and counting.

As US population grows, it takes about 2.2 million new (nonfarm payroll) jobs to keep the employment rate steady-state. To "break even" over his entire term, Bush needs 8.8 million new jobs.

He's down 2 million jobs to date, so he'll need 10.7 million jobs in 18 months to leave job-seekers "better off than you were four years ago" when Election Day rolls around.

Not to worry. First, pass some juicy tax cuts, generating 1.4 million jobs.

Next, ask Greg Mankiw's Council of Economic Advisors for another 9.3 megajobs worth of neat ideas.

As econoblogger Brad deLong pointedly observes, that's the same Mankiw who cautioned (in his 1998 Principles of Economics under the heading "Cranks and Charlatans"):

An example of fad economics occurred in 1980, when a small group of economists advised presidential candidate Ronald Reagan that an across-the-board cut in income tax rates would raise tax revenue. ... but the tax cut did not cause tax revenue to rise ... government began a long period of deficit spending ...

W has a long way to go to out-suck Herbert Hoover ... but on current form he's a favorite to come in second.

Update: Max Sawicky brings the fuzzy math into focus. Per CEA's own release, we could legitimately score only half of those hypothetical 1.4 megajobs as net adds. The other 700,000 are figments of the administration's ... what's the expression again? ... emphasis.

RonK, Seattle

Posted April 30, 2003 06:27 PM | Comments (15)