- The Big Picture - http://www.ritholtz.com/blog -

Some Folks Should Not Post on the Economy

Posted By Invictus On September 9, 2010 @ 8:30 am In Employment,Financial Press,Really, really bad calls | Comments Disabled

Invictus here. Been a while.  Been a bit busy and, frankly, not much to say of late.

As a general rule, I’d say that folks should refrain from posting on things they know nothing about.  The old saying (Abraham Lincoln, I believe, Mark Twain, according to commenters’ citations, attribution in dispute) comes to mind, “Better to keep your mouth shut and let people think you’re a fool than open it and remove all doubt.”

Erick Erickson should not write about the economy, as he has demonstrated yet again that his knowledge of things economic is, to put it politely, somewhat lacking.

Just a while back [1], Mr. Erickson incorrectly claimed that  “after the 2003 tax cuts, the unemployment rate fell to the lowest level since World War II. Let me repeat that:  the Bush economic program created the lowest unemployment level ever.”  Of course, the rate had been lower in just the last decade, under Bill Clinton.  And that fact was quite easily ascertainable via mouse click at BLS.gov or the St. Louis Fed.  I mean, really, we’re talking unemployment rate here, not some esoteric metric no one’s ever heard of and can’t research.  I don’t believe a correction has yet been posted on that particular item, nor am I holding my breath.

Not quite outdoing that egregious error, but giving it his best shot, Mr. Erickson came up with this gem [2] regarding last week’s nonfarm payroll report:

The number Mr. Obama will want us to pay attention to is private sector job growth. According to the government, private sector jobs went up and the growth of unemployment is attributed to those census workers leaving their jobs.

At least National Review [3] got it right:

The unemployment rate climbed to 9.6 percent as a result of many new entrants into the labor market (about half a million workers).

That the unemployment rate went up was a function, as NRO pointed out, of new entrants into the work force.  This is captured in the Household Survey, from which the unemployment rate is calculated.  It had nothing, zero, zilch, nada to do with “census workers leaving their jobs.”  Those losses were captured in the Establishment Survey.  And I would challenge Mr. Erickson to point to the government attributing the rise in the unemployment rate to jobless census workers.

Undaunted, he ventures on:

When unemployment was going down, it did so because of the hiring of the 500,000 census workers and Mr. Obama and his band of merry socialists were cheering the numbers as a sign of good news.

No, the unemployment rate did not go down because of census worker hiring.  Again, that was captured in the Establishment Survey.  The unemployment rate is derived from the Household Survey.  It had gone down for the opposite reason that it just went up — people had been leaving the labor market.  This concept of two surveys and which one captures what is really not all that challenging.  Or at least I didn’t think it was.

Live by the temporary census worker jobs.  Die by the temporary census worker jobs.

Except it simply did not go down that way.

Mr. Erickson should endeavor to write about topics on which he is a bit more knowledgeable, though I haven’t the foggiest as to what that might be.


Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2010/09/some-folks-should-not-post-on-the-economy/

URLs in this post:

[1] a while back: http://www.ritholtz.com/blog/2010/07/things-i-learned-last-week/

[2] came up with this gem: http://www.redstate.com/erick/2010/09/03/the-jobs-numbers/

[3] National Review: http://www.nationalreview.com/corner/245615/two-bright-spots-anemic-jobs-report-rea-hederman

Copyright © 2008 The Big Picture. All rights reserved.