In Obama and Romney Job Creation Policies, There is No Right Answer

I’ve been trying to learn enough about the employment numbers to get beyond the debate as I’ve seen it: One side showing one chart and then saying “See, no one’s employed!”, or throwing out one chart and sneering, “Obama has done better than Bush at creating jobs.” 

The realities of employment and job creation are all more complex than anyone wants to admit. Comparing Obama to Bush using such statistics obscures important questions about policy, and prevents thorough comparison of Obama and Romney.

This post helped me understand the numbers better.

One reason comparisons are tricky is that recessions don’t coincide neatly with presidential terms. Obama took office in the depths of a recession, but Bush was in office for a while before 9/11 happened (though the economy was soft before that).

Another reason things are tricky is that one needs to distinguish between jobs and people employed. The numbers are not the same. As a quirk of the data, there are usually about nine million more people who are employed than there are jobs. This is a result of the methodology used in creating these numbers.

Finally, one needs to consider the category of employment being discussed, whether it is seasonally adjusted or not, if the jobs are only in the private sector or in both the private and public sector, etc.

In short, when looking at employment statistics, one should consider:

1. Timing

2. Statistical methodology

3. Statistical category

The most interesting thing I learned is that Bush’s employment numbers were buoyed pretty significantly by public sector employment. For example, Obama created more jobs than Bush had created by the same time in his presidency, but he also created many more private sector jobs.

I bolded “jobs” in the preceding paragraph because things are different when one looks at “number of people employed.” Bush increased the number of people employed much more than Obama by this time in his term.

But again, comparing the same point in Obama and Bush’s first term isn’t that helpful. More instructive is to compare numbers from the same time after the “bottom” of the recession. Bush had created a good deal more jobs 28 months after the worst of his recession hit. However, he only created slightly more private sector jobs than Obama, in keeping with my point about Bush’s reliance on public sector employment.

On the other hand, Obama has created slightly more employed persons in the 28 months since the big 2008 recession.

Now for a philosophical point: none of this matters as much as people says it does.

People compare Bush and Obama as if it somehow settles an important political point. Obama supporters reason that if they can show that Obama has done better than Bush, than conservatives will shut up about the economy. But there is nothing that can be proven by these comparisons.

Political choices are made comparatively, not absolutely. One might be happy with Bush’s performance in comparison to Al Gore’s, and dissatisfied with Obama because McCain might have done better.

Alternatively, a conservative who voted for Bush might think that Obama is doing better, but nonetheless believe that he’s doing badly in an absolute sense. This is not hypocritical. One’s preferences can change. One might believe that Bush managed the economy well due to deception or just partisan fervor. and after seeing Obama do slightly better and realizing that it’s not  still very good overall reject both presidents and vote for Mitt Romney. What is actually important for voting in November is one’s relative confidence in Obama or Romney for the next four years, not statistics about employment.

Unfortunately, this is exactly the sort of information that no voter has access to, mainly because we don’t really have any idea what either person will do if elected to the 2012 — 2016 presidential term. It's shocking how little information is available to the average voter regarding either candidate's policies. Sure, one could look at Romney’s past policies, but how relevant would they be to his presidency? Even Obama might try radically different policies, depending on what Congress looks like.

The curse of American politics seems to be that voters are thrown irrelevant information, like hard-to-decipher economic statistics, because the information that would make a difference basically can’t be had.