Thursday, March 11, 2004

Very interesting...

Paul Krugman beat me to an administration source behind that "8 million jobs in the hole" talking point in his column titled Promises, Promises last Tuesday.

The interesting thing is that the Economic Report of the President seems to be just as inaccurate for Democratic administrations as well as Republicans. Bush's figure of 138.3 million nonfarm payroll employment forecast for 2004 in the 2002 report is practically the same as Clinton's figure of 138.2 forecast for 2004 in the 2001 report. Bush's figure of 135.2 million forecast for 2004 in the 2002 report is the same as Clinton's figure of 135.2 million forecast for 2004 in the 2000 report. When I put the Clinton 2000 and 2001 figures on Krugman's graph, I get two parallel lines just as the Bush 2002, 2003, and 2004 figures give three parallel lines after 2003, so it looks like a forecast for the rate of increase in employment is just pulled out of the air for both administrations.

I'd be willing to bet that:
  • Every economist worth his salt knows the Economic Report's forecast is not particularly reliable too far into the future.

  • The Council of Economic Advisors takes the available data, assumes economic improvement in the years to come, and plugs and chugs to develop a forecast.

  • A President Kerry's 2006 Economic Report of the President will come up with the wrong figures for employment in its forecasts just like the previous ones
It all makes me wonder if Krugman considered this sort of thing propaganda when the Democrats did it?

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