The Reflecting Pool

By Chandrashekar (Chandra) Tamirisa, (On Twitter) @c_tamirisa

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The President’s Organizing for America (OFA) grassroots campaign, out of love for the American people just after the Valentine’s day weekend, sent out a email thank you note to all of its members recently (I must confess that I am a member, albeit a registered independent voter, having supported the Democrat primary candidate Barack Obama). It came from David Plouffe, the man who has been called back to prep the Dems for the coming onslaught in November, to claim credit for the American Recovery and Reinvestment Act (ARRA).

The email contains a graphic. It shows what statisticians would call a Gaussian distribution of a time series of jobs lost or gained, by month, since December 2007 through January 2010. It is a pleasure to see a picture so numerically perfect. Except that the sign is in reverse. The picture is upside down, similar to looking at the monuments on the national mall in the reflecting pool (which was designed to mimic the Taj Mahal, except in this case it represents America’s love for its people). Still, the picture does not tell the whole story.

It becomes immediately evident looking at the chart that job losses peaked on a monthly basis around inauguration day. Then they gradually began to be lost, on a monthly basis, at a slower pace, but they were lost. So, adding up the total job losses and netting them out with two blips of jobs gained on either end of the chart, we get to 10.2 per cent unemployment. Meaning, if the unemployment percentage is plotted it would be secularly rising from December 2007 to January 2010. How the country wishes that were the gross domestic product (GDP) and not unemployment? But that chart is missing. It reminded me of Greek statistics, albeit masterful political spin, the Bush red on the left contrasted with the Obama blue on the right, with not much of a difference between the two sides.

Closer examination by placing that chart in context is more revealing. Just before Valentine’s day the President’s Council of Economic Advisers (CEA) advised the nation to learn to live with what the chart did not show to the far right: the jobs forecast. That forecast would be easy to add to that chart by flipping the Obama side of the picture first from left to right and then bottom up, around the timeline. The jobs will come back by 2016. That is a full 8 years from December 2007 and this was also the length of the Great Depression. The real unemployment rate now is estimated to be around 20 per cent (5 per cent less than the Great Depression peak of 25 per cent). So, is the administration saying that by 2016, the real unemployment rate will fall to about 10 per cent, after the country has been stroked into learning to live with it for 8 years?

Further interpretation gets even more interesting. The mirror image of the chart can easily be Wall Street’s employment and bonus numbers since December 2007. Their bonuses peaked at the end of 2008 and in 2009. As the government intervened to save the economy, the joblessness went up as did the bonuses in the financial markets. For all the fewer jobs lost under the Blue column since ARRA in February 2009, the jobs that have remained or have been saved are of lower quality than the jobs that were lost since December 2007. So will it be also in 2016, even if the unemployment rate falls to somewhere between 4 and 5 per cent. Is OFA going to claim credit for this also?

Love hurts. So did America’s love for its people. The government of the people, for the people and by the people is masochistic. Valentine’s Day gift in the election year went to Wall Street in the form of a ticker tape parade for buying people’s votes with political spin from the campaign advice funded by Wall Street donations at $30,000 per dinner plate in New York.

David Plouffe may not have known the statistics, but the economists who gave him that chart in the White House knew what they were doing and it is not credible.


About Chandrashekar (Chandra) Tamirisa
This entry was posted in Economics, Politics, Transformations LLC and tagged , . Bookmark the permalink.

2 Responses to The Reflecting Pool

  1. The reasoning in your posts is so twisted and cryptic, one would need a corkscrew to understand it. You’re just as obscurantist as Plouffe or Obama.

    • It is a technical dissection of the political case being made by the administration. In my view it was as poor a political judgment by Plouffe and company as was the decision to put the Fed Chairman Ben Bernanke on the cover of TIME magazine last December. I am glad that you feel the need for a corkscrew. Hope you’ll find some fine wine once you open it.

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