Supply Side EconomicX - of course.
Already the unholy troika of McConnell, Boehner and Mittens supported by the usual suspects on talk radio, Fox news and Rovian/Citizens United super Pacs are all over yesterday's weak jobs report to "prove" the total inadequacy of the economic recovery under the 0bama administration. But other than the incessant repetition of their knee jerk talking points they are all empty suits.
None of them, i suspect, care to understand the relationship between jobs and product demand. They continue insisting that jobs will suddenly appear if only they could eliminate regulations and taxes imposed on their "job creators," instead of recognizing that lack of demand for products is a function of unemployment and is the driving force in manufacturing contraction.
From Nate Silver at FiveThirtyEight:
For most voters, however, health care remains a secondary issue as compared with the economy. On the economic front, there was some poor news for Mr. Obama in the form of a manufacturing report which showed a sharp decrease in orders for new goods.
The report, from the Institute for Supply Management, is not used directly in FiveThirtyEight’s forecast. However, a highly correlated data series, industrial production, is used in the index, and the report could portend a slowdown when that data is released this month.
The manufacturing report is consistent with a pattern in which mildly encouraging news about the economy, like in Europe and in the housing market last week, seems to be offset by negative news from another sector. Manufacturing activity had been a bright spot in the economy for most of the first half of the year and may be especially important in the swing states of the Midwest.
Earlier this week, Meteor Blades commented on this same data here and quoted Ryan McCarthy of Reuters:
In the US, today’s data from the [Institute for Supply Management] showed “contraction in the manufacturing sector for the first time since July 2009.″ [...] There were two particularly troubling data points. No one seemed very interested in buying things —new orders fell at the fastest pace in a decade; and people paid less for those things—prices paid fell at the fastest rate since just after 9/11. This is, as one analyst put it to the [Wall Street Journal], a bad omen: “It is only a matter of time before the service sector mirrors the real goods slowdown and overall employment gains move from sluggish to worse.”
In its own manufacturing index released today, Markit Economics suggested the US manufacturing industry is slowing, but not quite in contraction. But like the ISM report, Markit’s data also showed that new orders fell. And the company’s own economist acknowledged that "the ISM suggests something drastic happened in June."
Perhaps it is simplistic to assume that any Republican source will acknowledge that the troubling economic news in the manufacturing sector is directly due to decreased demand and over-supply. I am sure it is even more unlikely that our friends across the aisle can come to grips with the fact that this contraction is a function of supply side economics.
Ultimately, giving all the economic benefits to the "job creators" does nothing more than reduce demand for products from the economic engine of this country and leaves the very same vultures reducing prices to eliminate excess inventory; cutting jobs because they won't produce more goods to place in a saturated market thereby reducing demand further; and, in the long run, sucking the vitality out of our economy.
But, what the hell, the troika will be able to sell this to the ill informed Fox nation as another administration failure and Obama Fails Again will fit nicely on a bumper sticker.