Skip to main content

Republicans and their media water-carriers are apoplectic about Friday's report showing the unemployment rate dipped to 7.8 percent in September as the U.S. economy added 114,000 new jobs. But while many conservatives have been quick to follow in Richard Nixon's footsteps in accusing the career civil servants at the BLS of cooking the books for President Obama by showing more robust employment growth this summer, there is one jobs report no Republican wants to talk about. Because in the spring of 2011, the Bureaus of Labor Statistics and Economic Analysis revealed that the Bush recession was far more severe than the incoming Obama administration knew at the time or Republicans want to admit now.

In late 2008, Barack Obama's transition team led by Christina Romer and Jared Bernstein began planning the President-elect's response to the near collapse of the American financial system that fall. In readying what in February 2009 would become the $787 billion American Recovery and Reinvestment Act, Romer and Bernstein estimated that unemployment would peak at 8 percent with the stimulus--and 9 percent without it.

Unfortunately, only much later did Obama's team--and the American people--learn just how catastrophic the U.S. economic situation was at the beginning of 2009.

As The Economist and the Washington Post's Ezra Klein explained, in early 2009 the American economy was not only in much worse shape than anyone imagined; it was literally on the brink of collapse. As The Economist explained the run-up to the passage of the $787 billion recovery program:

The White House looked at the economic situation, sized up Congress, and took its shot. Unfortunately, the situation was far more dire than anyone in the administration or in Congress supposed.

Output in the third and fourth quarters fell by 3.7% and 8.9%, respectively, not at 0.5% and 3.8% as believed at the time. Employment was also falling much faster than estimated. Some 820,000 jobs were lost in January, rather than the 598,000 then reported. In the three months prior to the passage of stimulus, the economy cut loose 2.2m workers, not 1.8m. In January, total employment was already 1m workers below the level shown in the official data.

As Klein summed it up last year:
The reality has been worse than the administration's nightmare scenario. Even with the stimulus, unemployment shot past 10 percent in 2009.

To understand how the administration got it so wrong, we need to look at the data it was looking at.

The Bureau of Economic Analysis, the agency charged with measuring the size and growth of the U.S. economy, initially projected that the economy shrank at an annual rate of 3.8 percent in the last quarter of 2008. Months later, the bureau almost doubled that estimate, saying the number was 6.2 percent. Then it was revised to 6.3 percent. But it wasn't until this year that the actual number was revealed: 8.9 percent. That makes it one of the worst quarters in American history. Bernstein and Romer knew in 2008 that the economy had sustained a tough blow; they didn't know that it had been run over by a truck.

Continue reading below the fold.

Just how big a truck is reflected in these charts from the Center on Budget and Policy Priorities. CBPP now estimates that the unemployment rate, which reached 9.8 percent in 2009, would have approach 12 percent in the absence of the stimulus. As the numbers show, in the last quarter of 2008 the contraction of the U.S. economy was greater than at any time since the Great Depression of the 1930's.

But for Republicans, many of whom still continue to claim George W. Bush inherited a recession from Bill Clinton, the BLS' jaw-dropping downward revision of the 2008 and 2009 jobs numbers must be swept under the rug. To acknowledge them doesn't just add more confirmation that their nominee Mitt Romney is lying when he says President Obama "made the economy worse." The BLS data shows that the America was on the brink of economic collapse as Obama took the oath of office. And the overwhelming consensus of economists including the nonpartisan CBO and John McCain's own chief economic adviser, it is thanks to his stimulus program and other actions taken by his administration that Barack Obama prevented Great Depression 2.0.

Originally posted to Jon Perr on Sat Oct 06, 2012 at 12:00 PM PDT.

Also republished by Money and Public Purpose and Daily Kos.

EMAIL TO A FRIEND X
Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags

?

More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

Renee, GainesT1958, chuck utzman, mikepridmore, MadRuth, hester, teacherken, Pandora, artr2, mjr, NYmom, RunawayRose, tommurphy, Shockwave, Heather in SFBay, Andrew C White, hyperstation, celdd, eeff, Mnemosyne, Sabarte, LeftHandedMan, elfling, bookbear, Creosote, eyeswideopen, Camp, concernedamerican, cskendrick, wonkydonkey, whenwego, Loquatrix, Ian S, CoolOnion, Glinda, Cedwyn, aitchdee, PDX Dem, virginislandsguy, Lawrence, Steven Payne, Liberaljentaps, ybruti, poemworld, Emmy, rmx2630, Sybil Liberty, Limelite, maybeeso in michigan, marina, Tinfoil Hat, DianeNYS, Jeffersonian Democrat, SherwoodB, Flint, Brooke In Seattle, Dobber, Laurence Lewis, Inland, Fury, SBandini, bunsk, JanF, Alan Arizona, xaxnar, Reality Bites Back, martini, Shirl In Idaho, Nance, Sanuk, keeplaughing, 417els, hungrycoyote, profundo, Russgirl, dopper0189, cookseytalbott, fou, TalkieToaster, global citizen, erratic, gpoutney, real world chick, middleagedhousewife, Pilgrim X, kurt, nannyboz, Brunette, kurious, ladypockt, Sapere aude, bear83, Cronesense, Loudoun County Dem, oklacoma dem, camlbacker, bfbenn, Positronicus, puakev, yoduuuh do or do not, FishOutofWater, noofsh, uciguy30, Timmethy, South Park Democrat, gizmo59, gundyj, seriously70, GAS, DarkHawk98, Seattle Mark, Cordwainer, Sixty Something, Involuntary Exile, bythesea, monkeybrainpolitics, tofumagoo, pamelabrown, hwmnbn, Jake Williams, catly, mofembot, binkycat, sagansong, palantir, ekyprogressive, statsone, RWN, prettygirlxoxoxo, ARS, Baldur, Zotz, elziax, MKSinSA, asym, kevinpdx, haremoor, astral66, orangeuglad, jpmassar, Words In Action, BlueOak, Amber6541, Laurilei, David PA, T Maysle, estreya, Tea and Strumpets, catwho, on board 47, Polly Syllabic, ssentamu, cordgrass, gulfgal98, ItsSimpleSimon, Loose Fur, AdManAnt, Quantumlogic, Onomastic, annieli, kerflooey, cybernun, sabo33, fwcetus, vahana, mikejay611, cleduc2, FightingRegistrar, Alice Olson, cama2008, mrsgoo, PorridgeGun, sethtriggs, BarackStarObama, Tommy Aces, peregrine kate, jolux, SoCalSal, SteelerGrrl, rscopes, Auriandra, ParkRanger, Davui, judyms9, AnnetteK, OldDragon, Catskill Julie, ahumbleopinion, Core Da Freak, S F Hippie, a2nite, 2thanks, Trotskyrepublican, Letsgetitdone, CA ridebalanced, Arahahex, wxorknot, T C Gibian, Candide08, Dallas L, Sam Sara, David Michigan, smokey545, Tim DeLaney, Icicle68, Smoh, ProgressiveLT, tampaedski, sparkysgal, Kimbeaux, northcountry21st, starduster, pianogramma

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site