August 13, 2004

Trashing A Good Economy

The best kept secrets in America are that the economy is growing rapidly, unemployment is low, and good-paying jobs are leading the way in job creation. Contributing to the distortion is the rhetoric of the Kerry campaign. Donald Luskin at NRO:

For example, he claimed that “here at home, wages are falling.” That’s a lie. According to official numbers from the Department of Labor’s Bureau of Labor Statistics, average hourly earnings have risen 2.1 percent after adjustment for inflation since George W. Bush took office. Over the comparable period in President Clinton’s first term, they rose only four-tenths of one percent.

In the same speech Kerry claimed that the new jobs created during Bush’s first term “pay $9,000 less than the jobs that have been lost.” That’s a lie, too. Any honest economist could have told Kerry that statistics are detailed enough to prove that such a specific claim simply does not exist. Kerry, however, sourced his number from the liberal big-labor-backed think tank, the Economic Policy Institute. The EPI’s number is based on nothing better than Bureau of Labor Statistics data on changing employment levels in broad industry groups — statistics that say absolutely nothing about the relative value of jobs gained and lost. That $9,000 number might just as well have been pulled from thin air.

If Kerry was after the truth, he could have looked to the non-partisan Annenberg Public Policy Center of the University of Pennsylvania. Annenberg has obtained better data from the Bureau of Labor Statistics that breaks down job gains and losses by specific occupations, not just broad industry groups. This data shows “strong growth in higher-paying employment categories over the past year — more than 1.1 million gained — and stagnation in lower-paying job categories.” But, of course, we don’t hear Kerry quoting this research.

Let’s get real. While it would be nice to have the unemployment rate back down to 3.8 percent — where it briefly stood for one manic month four years ago at about the same time the Nasdaq was at 5,000 — at 5.5 percent today, it is better than the average rate of the past half century. More, the current unemployment rate is exactly where it was at the comparable point of the “Clinton prosperity,” those halcyon days that Democrats never stop waxing nostalgic about.

And in terms of overall economic growth, you don’t have to be nostalgic. These are the good old days. Gross domestic product adjusted for inflation has grown over the last twelve months at a faster clip than during any twelve-month period of the eight-year Clinton administration.

And if this economy is so bad, just what is John Kerry going to do to fix it? Well, we know he’s going to raise taxes on those he calls “America’s wealthiest people.” In case you can’t break this code, he’s talking about you.

Posted by dan at August 13, 2004 11:25 PM