Mitt Romney: “don’t know much about history, or understand the economy…”

Title of course to be sung to the Sam Cooke hit.

Anyway, Mitt Romney’s claim to the presidency is based on one thing: he’s an economics guy; he understands the economy; he’s all about the numbers; he knows how we can get the economy moving again.

Romney severely undercut that claim today in his foolish comments over last month’s job numbers. The numbers, which were not great but were still in positive territory (+115,000 jobs), led Romney to say this:

“We should be seeing numbers in the 500,000 jobs created per month,” Romney said. “This is way, way, way off from what should happen in a normal recovery.” …

“Anything over 8 percent, anything near 8 percent, anything over 4 percent, is not a cause for celebration,” he said.

OK, let’s look at both of those claims. First, the truly outlandish one: that we should be seeing 500,000 jobs created every month if this were a “normal recovery.”  Want to know how many times job growth like that has happened in, say, the last 50 years? Five. In only five months in the last 50 years have 500,000 or more jobs been added to the economy. Those months are March 1978 (513,000), April 1978 (702,000), September 1983 (1.114 million), September 1997 (507,000), and May 2010 (516,000). As you can see from that list, only once in the last 50 years has it happened two months in a row (March-April 1978), and it’s worth noting that in the month before the biggest job month ever (Sept 1983), over 300,000 jobs were lost. Also worth noting is the fact that a Democrat was president in four of those five months of 500K+ job growth.

So Romney is just completely out to lunch on that one.  How about the unemployment rate?  Is he crazy to say that any time the unemployment rate is above 4%, things are bad?

Basically, yes.  Again, let’s look back 50 years.  There have been exactly two stretches during that time in which the unemployment rate was at or below 4%.  Those stretches are a four-year period from December 1965 through January 1970 (a period that spanned the administrations of Lyndon Johnson and Richard Nixon), and a one-year period from December 1999 through December 2000, which of course was during Bill Clinton’s presidency.  And that’s it.  Never once in the presidency of Republican hero Ronald Reagan did the unemployment rate dip below 5%, never mind 4%.

For a numbers guy, Romney has an awfully shaky grasp on numbers.

[All the data for this post are available at this link.  Unfortunately, I can't link directly to completed searches, so you'll have to run the numbers yourself if you want to check my figures.]



Discuss

25 Comments . Leave a comment below.
  1. Full Employment

    If I remember only one thing from my Econ 101 course 37 years ago, it is that 4% is considered “full employment”. How often do we achieve that, even in a good economy? Anyone with a greater understanding that mine care to inform?

    • I answered that question

      in the post. We’ve had two stretches of 4% or less unemployment in the last 50 years, once from 1965-70, and one from 1999-2000. That’s it.

      • We should also remember

        All parties, regardless of political persuasion, should remember that the unemployment statistics severely understate reality — perhaps as a result of the desire of past administrations to gerry-mander the statistics to the 4% level.

        The unemployment statistics do not measure workers who exhaust their unemployment benefits and give up. Similarly, professionals who have operated their own consulting/contracting companies — nearly a requirement in today’s Massachusetts economy — and are unable to stay in business are similarly not counted in unemployment statistics.

        The reality is that the economy is much worse than politicians of both parties would have us believe. Fully half of Americans are at or near poverty. The likelihood of being in poverty is inversely proportional to age — our youngest Americans are the most likely to be in poverty.

        All this happens while America remains among the wealthiest nations on Earth.

      • Oops

        Sorry, I was so excited about Mitt’s becoming a grandfather x2 that I blew right by that :)

  2. Romney's numbers are too high, but not ridiculous

    Tossing around whole numbers in terms of job growth over a 50 year period is just sort of silly given that the size of the workforce has changed so much over the years, so my response is mostly about percentage changes, which allows for some normalization.

    When we look at the recessions over the last 50 years, there’s not a real consistent pattern to rely on when it comes to job growth. In the 24 month period following a recession where job growth has begun (on a month to month basis) the average growth per month is 0.18% of the total workforce. Given that number, we should expect around 246K jobs – which is 137% more than we actually got. Now that 0.18% includes the recessions with jobless recoveries, which from a left wing economic perspective, are the enemies of progress, so lets look at what happens we exclude those. Then the average is average monthly growth equal to 0.29% of the entire workforce – if we had gotten that, we’d have seen 389K new jobs last month.

    Now if we play by the Price is Right rules, Romney loses, his 500K is too high, but actually much closer to what we should expect than what’s actually happened. Also, given that we lost on average 384K jobs a month during this last recession, crowing about getting 115K seems pretty desperate. Obama needs to do better (either by firing Bernanke and getting someone committed to real GDP growth in place, or something else…) or he’s in real trouble.

    • No, they are straight up ridiculous.

      When we look at the recessions over the last 50 years, there’s not a real consistent pattern to rely on when it comes to job growth.

      Which, coincidently (or not), is why it’s ridiculous to say, definitively, that there ought to be consistency.

    • I haven't heard anyone

      crowing about the 115,000 number. The point of the post is a simple one: Romney’s numbers, both on job creation and on the unemployment rate, are ridiculous. I haven’t seen anything anywhere to contradict that.

      • Here's what I read in your post

        “our guys performance sucks, so I’m going to nitpick over the other guys details, even though the spirit of what he’s saying is closer to what our guys should be saying.”

        If the tables were turned, if Romney was President, and candidate Obama were saying we need 500K jobs and full employment, I’d bet big money that you and the rest of the President’s supporters would be shouting rah rah and giving high fives.

        We should be seeing job growth of 300 to 500K a month, the fact that we’re not is the responsibility of the Federal Reserve, and the President and Senate who failed to act when they had the opportunity. If Obama really cared about Main St., right now, we wouldn’t be worrying about pathetic job growth, we’d be in a discussion about inflation. Negative interest rates on reserves will turn the economy around, inflation targeting of 3 ro 4% will turn the economy around. Obama is too big a coward to push for it.

        • Ah, I see.

          So you “read in my post” a bunch of stuff that’s not actually there. Well, that’s your prerogative, I guess, but we do try to keep things reality-based around here.

          • Reality based, eh?

            I think my response to you, which took a far more careful reading of the same numbers you were bandying about was reality based. Of course, those numbers didn’t get any response – because it’s campaign season here on BMG and it’s better to try to create memes that might get traction than to actually discuss what’s happening in the world.

            This is a fantastic site, but around campaign season, the quality of the rhetoric drops significantly when partisanship trumps reality.

            • Everyone agrees

              that the 115,000 number was disappointing. Which is one of the reasons I didn’t have much to say about that number other than “not great but still in positive territory” – which is, I’d submit, incontestably true. So I will repeat myself: the point of the post was to address Romney’s numbers, which were absurd, not to defend April’s jobs numbers as awesome, since they weren’t. If Romney had said something like “we should be seeing 300,000 jobs created a month,” he’d have been right, and there wouldn’t have been a post about that. (Though he was also dead wrong about the unemployment rate, which you haven’t mentioned.)

              Your point about the percentages is a fine one, and is not inconsistent with my post. What I objected to was your suggestion that I, or anyone else, has been “crowing” about the 115,000 number for April.

            • Romney's not making a reality-based argument

              It is possible to make one, as you have demonstrated to some degree after prodigious efforts, but that is not what Romney is doing. It’s just like in theory Romney is a smart guy, but in practice he makes ridiculous arguments and routinely contradicts himself, which makes him a very poor candidate with limited appeal.

        • Actually, Democrats are held to a higher standard

          … if only by Fox News. I guess the perspective over at Fox News (& other right wing outlets) is that what Romney is saying expresses a truth even if inaccurate. Fact-checking amounts to nitpicking. We should honor that “truth”.

          If the shoe were on the other foot, though, a Democrat making this same assertion about a Republican would be fact-checked by Fox News, because, of course, to them Democrats are liars, distorters, extremists, or all three. When the contradiction against economic history was discovered it would be held up as an example of “getting to the bottom” of things. Hannity would include it in a chapter of his latest book and O’Reilly would devote a segment to it.

    • A factor you're not including ...

      In prior recoveries, government hiring has increased (because good government tries hard to stimulate the economy during and immediately after steep recessions) and government contribution to unemployment has decreased.

      In this “recovery”, federal spending was so badly mishandled by the prior administration that President Obama has been forced to reduce the size of the federal workforce — and the significant restrictions on federal spending have forced state and local governments to layoff government employees at those levels.

      It is disingenuous hand-waving for a GOP that created the crisis in the first place (by, for example, initiating two major wars while simultaneously slashing tax rates), that has used every means available to them (both fair and foul) to force restrictions and cutbacks in government spending, and that rails relentlessly about the “size of government” to then blame the current administration when the predicted and predictable consequences show up in the unemployment rate.

      The miracle is that the recovery is as strong as it is. It is not nearly strong enough. The policies advocated by Mitt Romney created the problem in the first place, worsen the problem now to the extent that they have been forced on the current administration, and would make it worse if they were put in place in the future.

  3. Not ignorance, mendacity

    Mitt Romney will say anything that fits his narrative, whether true or untrue. He doesn’t care to check. He is so good at sounding convinced and authoritative he thinks he can lie and be rewarded.

    The Republican Party has not been taken over by Michele Bachmann; it has become Michele Bachmann.

  4. Speaking of Romney’s numbers,

    Paddy just read a piece by Comrade Begala which embarrassed me by mustering up a better appearance of knowledge about our Greater Cape Cod (resort-type) economy than I could have done who lived through the Mittens Administration right where I sit still.. No doubt some underling looked all the data up for the great man, but wherever it may have come from, ¿Is statistical stuff like the following correct?

    “He said, ‘I’m going to get the economy moving again. I’m a businessman. I know how to create jobs.’ [The state] went from 37th in the nation in job creation to 47th in the nation in job creation. So we’ve tested the Romney acumen when it comes to creating jobs, and he’s been found wanting.”

    Perhaps that’s why Romney doesn’t dwell on his record as governor. His state really was 47th in job creation, behind only Ohio and Michigan, both of which were being ravaged in the manufacturing meltdown, and Louisiana, which had been devastated by Katrina. Romney even trailed Mississippi and Alabama in job growth, breaking the iron law that Mississippi and Alabama have to be last in pretty much everything except cockfights and kissin’ cousins. While the country as a whole enjoyed 5 percent growth, Romney’s Massachusetts grew at 0.9 percent.

    It wasn’t supposed to be that way. Romney sold himself to the voters as a turnaround artist—a CEO who could lure jobs to the Bay State. He pledged to use his business skills to “encourage businesses to come grow and thrive in the most robust portion of the economy, Massachusetts.” Not so much.

    Romney’s economic failure in Massachusetts

    Mittens Unveiled

    is especially problematic because the central premise of his presidential campaign is the same as it was when he ran for governor: that he can apply his business skills to our economic problems. Massachusetts was the guinea pig for Romney economics. The results weren’t pretty. In addition to almost zero job growth, the state saw a modest decline in real median income, meaning that the folks who had jobs were bringing home less.

    Romney did close the $3 billion budget gap he’d inherited (although he then left a projected shortfall of up to $1 billion). The methods he used are instructive. He slashed higher education, cut revenue to local governments, and raised fees on everything from college students to mortgages, from buying a boat to opening a bar.

    Romney’s cuts to education and job training were especially severe. Fees for university students shot up 63 percent as Romney hammered college funding. Robert Karam, former chair of the UMass Board of Trustees, was a Romney backer. But no more. “I think higher education really stood still” under Romney, he has said. Romney even annoyed the business community—his core constituency—by cutting job training, workforce development, and trade assistance.

    The Romney recipe of cutting education and job training, forcing higher fees on the middle class, and protecting the rich from tax hikes didn’t work in Massachusetts.

    But of course (he continues) ‘Romneycare’ is terrific . . . .

    Some of the above is mere burbling b*llsh*t, squishy-soft ‘analysis’ rather than hard steel-claptrap fact, like the notion that His Excellency, who is, after all, JD/MBA ’75, must cook from a ‘recipe’. That part every amateur can do for herself, should she think it worth doing. I’d just like to be reassured that the numbers mentioned are not entirely fictitious.

    Happy days.

  5. Maybe if House republicans voted for the nation

    instead of against it things might improve:

    2 Million: Jobs potentially destroyed under GOP bills
    0: GOP jobs bills
    17: Times GOP have voted against Democratic jobs legislation, including China currency legislation that would help create 1 million American jobs
    299: Times the house has refused to conference with the senate on job creation

    • Citations?

      Excluding the The Nation (bad enough,) or the NYT (worse.)

      Also, “Democratic jobs legislation” = “labor union give-aways paid with borrowed money.”

      • If you object to 'borrowed money'...

        Also, “Democratic jobs legislation” = “labor union give-aways paid with borrowed money.”

        Then you should be first in line to criticize the nominee-presumptive, Mitt “Leveraged Buyouts” Rmoney. Seriously, how’s about a little consistency here: if there is anything distasteful about ‘borrowed money’ then there is something distasteful about your candidate. Maybe that’s why your so pissy: you can’t help but be confronted with the fact that the candidate you support doesn’t support what you believe. That’s gotta hurt.

      • Epistemic closure claims another conservative.

        .

  6. Is campaign rhetoric taken as economic data?

    If that were the case, then one can criticize much of what the WH and Obama campaign have to say. I don’t believe many if any (beside you, David,) will be challenging Romney for rote statistical accuracy and then extrapolating it to show economic or historical ignorance.

    Similarly, does anyone believe Obama is responsible for the southern portion of the XL pipeline credit for which was taken by the president? I think it’s all written off as campaign fever.

    Warren’s one-thritysecond Cherokee flap has more weight (even if I don’t personally see it as politically pivotal.)

    • Nice switch there.

      “rote statistical accuracy”

      He’s not being criticized for mere inaccuracy. He’s being criticized for asserting a standard so far from reasonable it might as well be on another planet. The second coming couldn’t sustain 500,000 jobs a month.

  7. I don't think that works

    The labor force is not comparable to that of 50 years ago, when the population was half as big, and the female half of that population did not work. The jobs figure is a disappointment, at best.

    As for whose fault it is: it is more likely that government policy over the last year had an effect on this summer’s weather than on this year’s economic performance.

    • A 50-year lookback

      was simply a convenient time frame. If you’d like, I could do a shorter one, say 20 years, which would present a generally larger labor force and more women working. Needless to say, a shorter lookback would not change the fact that there have been precious few months showing 500,000 jobs created.

  8. Hey bostonshepard

    Go fish ther buddy

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Sat 22 Nov 11:28 PM