Posts filed under “Cognitive Foibles”
I see once again that the canard about Reagan’s million-jobs-month is making the rounds:
“Reagan’s best job month garnered the very top ranking since WWII with 1,114,000 jobs added in September 1983. A single month with more than a million jobs added. So far Obama can only wish for such a total.”
This is either journalistic incompetence or deliberate deceitfulness. Those of you who keep repeating this falsehood — including some once-reputable media outlets — are committing journalistic malpractice. And shame on you, Senator Rob Portman.
So, for the second time in three months (see here for the first go-round) – and then on to a related topic – here we go:
The Reagan recovery simply did not include a month in which anywhere near one million jobs were created. It did include two months in which almost 700,000 AT&T workers went on strike and then returned. Those workers dinged the NFP number one month and subsequently goosed it the next. There’s no magic about this whatsoever; it could not be clearer. If I loan you $10 one month and you pay me back $11 the next, two things: 1) I’m a usurious bastard and 2) i did not “make” $11 the second month. Those who initiated this canard (thinking WSJ editorial page), and the countless bobbleheads who have mindlessly repeated it, have done everyone a great disservice.
I’ve retrieved and posted the two relevant BLS releases to my Scribd page.
Here’s the NY Times at the time:
Here’s an excerpt from the BLS release the month before Reagan’s million-jobs miracle (when the striking workers returned). Note the “nationwide strike of some 700,000 communications workers.”
All that said, I started thinking about that period of time in a larger context. I thought about what has become of labor’s leverage (or lack thereof) over the intervening years. I reached out to a friend at the St. Louis Fed, who found the data set I needed – Net Change in Number of Workers on Strike, persons, with the following definition:
Net change in the number of persons on strike is the number of persons newly on strike minus the number who returned to work after a settlement. Only strikes involving at least 1,000 workers are covered.
The table below is fairly self-explanatory, and tells a sad story about labor’s diminished – and diminishing – power, as evidenced by the ongoing decline in strikes (aka “work stoppages”). To be crystal clear here: Like everyone else, I have on occasion suffered as a result of striking workers in one industry or another. And it’s no fun. Then again, I’m sure it’s no fun for the strikers, either. I’m sure they’d rather not be on strike. The point is that one of labor’s Hail Mary, last-resort tactics has become virtually extinct, dealing a blow to the labor force.
Given that, is it any wonder that labor’s share of the spoils has just bounced off a record low (props to Slick Willy for at least temporarily turning things around).
See Bruce Bartlett on labor share here.
Its Friday (and a hot summer Friday at that), and as such, I like to wax philosophical about what I see around me as some of the broader issues today. Cullen Roche of Pragmatic Capital sets the scene for us: “The economy continues to do okay, the stock market is hitting all-time highs every day,…Read More
> Two weeks ago, I managed to anger quite a few people with a Washington Post column titled: Missed the big market rally? Here’s what to do now. There were a variety of perturbed commenters both here and at WaPo as well as angry emails and assorted bemused tweets. While lots of readers, commenters…Read More
Hey, today we are having lunch with the astute Morgan Housel of MF. I have been enjoying his writing for years now — he is my favorite Motley Fool writer. Here is his very simple explanation for why the end-of-worlders have been wrong, and will continue to be wrong, for most of the future…Read More
Back in August of 2011, Gallup decided to do what they do best — which is poll the American public for their thoughts. In this instance, it was their thoughts on investing. The questions asked was simply: What do you think is the best long term investment? Their answers were very instructive: 34% of Americans said…Read More
Ex Post Facto: from or by subsequent action; subsequently; retrospectively; retroactively. From late Latin, literally, from a thing done afterward I want to discuss a problem that exists in the narrative form of market commentary, one that I hinted at last night but did not have the time to fully explore in…Read More