O's Legacy: Unemployment Rate Now Meaningless

Hope and Change apparently means that the Obama administration is counting on so many Americans giving up hope that the administration can now change the entire metric for measuring unemployment.  When you analyze the most recent employment statistics, you have to conclude the strategy is working.

We all know that Barack Obama's legacy will be that of a wide swath of destruction across the economy and in fact all of American life.  And one item you can add to that Obama ash heap will be the trust anyone has in any government statistics -- most notably the official unemployment rate.  And as a result, Obama may be really hanging himself with these accelerating obfuscations.

For months, the administration has been monkeying with the unemployment figures to hide some of the trauma Obama has inflicted on the U.S. economy, but last week's shameful cooking of the jobs report took it to a whole new level.  To hear the government tell it, our unemployment rate plummeted nearly half a point in just a month to a level of 8.6%.  And it did this on the strength of 120 thousand new jobs.

Now, I hate to quibble, but for the entire length of the Bush administration, we were told every month that it takes 125 to 150 thousand new jobs just to keep the unemployment rate stable.  Suddenly that kind of growth under Obama sends our UE rate spiraling downward.  What gives?

Well, thanks to great work and aggressive tweeting by economist and commentator Jim Pethokoukis -- formerly of Reuters -- we know what gives.  The universe of potential workers is now so small that it is hiding how weak the employment situation is in our nation.

Without getting too bogged down in the weeds of employment statistics, the U3 -- or headline rate -- is what is considered "the" unemployment rate.  That is what was reported at 8.6 this week.  The U6 rate combines unemployed and "underemployed" and is at 15.6%.  That's a great indicator, but the newsmaker is U3.

The U3 rate is the percentage of the "participating labor force" that is unemployed.  That is all well and good, except that the Obama labor department has decided that it will simply manipulate the definition of "labor force" to suit its own needs.  And what the Obama administration has done is simply shrink the definition of the "labor force" by pretending that hundreds of thousands of non-working adults are no longer in existence for all intents and purposes.

If you are offended that under ObamaCare you may be considered "a unit," you should know that under Obama employment stats you may not even exist!  In fact, a lot of non-working adults who existed in October apparently no longer do exist officially.

In other words, in the universe Obama took over from George W. Bush, the unemployment rate would still be over 11%.  Now, the last time I checked, the planet has not gotten smaller, nor has the population of the United States.  (I am not sure about the sea levels.)  To thinking people, there is no legitimate reason to shrink the potential labor pool.  Of course, there is an illegitimate reason to do so: to protect the governing record of Barack Obama.  Anyone who follows politics even casually knows that if the general public ever really figured out that the real unemployment rate is over 11%, Obama would have zero chance of re-election.

Moreover, Obama's leftist collectivist governing leanings would be totally discredited, as would members of Congress who believe in the same principles.  Succinctly, an admitted 11% rate would destroy the American left politically.  The administration and their willing accomplices in the Jurassic media simply cannot afford for that to happen.

Among those they have not fooled, of course, is de facto Tea Party father Rick Santelli of CNBC.  "I don't trust [these numbers]," said Santelli Friday on Squawk Box at the very moment the figures were released.  "I want to see the labor force participation rate because personally I don't trust the U3 rate...and when you throw in the politics of the day -- because this is such a big number that resonates with the public -- there's a lot of movement in these numbers that can alter the rate significantly."

Santelli's initial instincts, of course, were right on the money.  The participation rate had been jiggered to make Obama look good.  Or, since it's 8.6, make him look less bad.  And yes, "the politics of the day," as Santelli said, is the entire reason.

Even Santelli's regular antagonist on CNBC, liberal economist Steve Liesman, admitted that this was the case -- albeit in gentler terms: "The workforce declined by 315 thousand and that makes it easier to get to the lower unemployment rate."  Uh, ya think?  Now, just where the hell did those 315 thousand people go?  They have given up hope, so the administration is just pretending that they aren't there anymore.

Actually, it's worse than that.  A closer look at the figures shows that some 435 thousand non-working adults have been statistically vaporized, while the newly employed 125 thousand folks are counted, equaling the net loss of adult workers of over 300 thousand.

Translation: the administration lied to us to make itself look good.  That big Obama supporter Steve Liesman is admitting this on an NBC network is significant.

Which is why I believe this cooking of the books may be reaching a critical mass of ineffectiveness.  Taking the work of Pethokoukis into account, the workforce is now officially only 64% of all adults -- which means that something on the order of only 55% of adults are now working.  (This should be the permanent metric, and not some esoteric U3 number, anyway, but that's another article).  This is not sustainable or healthy.

And while most folks don't realize that only 55% of adults are working, they know something is wrong.  And they know a lot of those other 45%.  And many are obviously in that 45%, and they know that many are not legitimately retired or legitimately disabled.

Europe is collapsing because too few people are pushing the cart and too many are on it getting a free ride.  But as they are finding out, that free ride ultimately becomes damned expensive.  And when it becomes "good news" to an administration that 315 thousand fewer adults even consider themselves in the workforce anymore, then you have a situation here that is about to become damned expensive, too.  And when that happens in the same month Obama can brag about his "8.6" -- you are nearing the time when many Americans will simply never believe anything their government tells them anymore.

Which, when you think about it, is really bad news for any politician who believes in government solutions for everything and good news for proponents of limited government.  Perhaps this blatant overplay on the part of the administration will come back to haunt them.

Hope and Change apparently means that the Obama administration is counting on so many Americans giving up hope that the administration can now change the entire metric for measuring unemployment.  When you analyze the most recent employment statistics, you have to conclude the strategy is working.

We all know that Barack Obama's legacy will be that of a wide swath of destruction across the economy and in fact all of American life.  And one item you can add to that Obama ash heap will be the trust anyone has in any government statistics -- most notably the official unemployment rate.  And as a result, Obama may be really hanging himself with these accelerating obfuscations.

For months, the administration has been monkeying with the unemployment figures to hide some of the trauma Obama has inflicted on the U.S. economy, but last week's shameful cooking of the jobs report took it to a whole new level.  To hear the government tell it, our unemployment rate plummeted nearly half a point in just a month to a level of 8.6%.  And it did this on the strength of 120 thousand new jobs.

Now, I hate to quibble, but for the entire length of the Bush administration, we were told every month that it takes 125 to 150 thousand new jobs just to keep the unemployment rate stable.  Suddenly that kind of growth under Obama sends our UE rate spiraling downward.  What gives?

Well, thanks to great work and aggressive tweeting by economist and commentator Jim Pethokoukis -- formerly of Reuters -- we know what gives.  The universe of potential workers is now so small that it is hiding how weak the employment situation is in our nation.

Without getting too bogged down in the weeds of employment statistics, the U3 -- or headline rate -- is what is considered "the" unemployment rate.  That is what was reported at 8.6 this week.  The U6 rate combines unemployed and "underemployed" and is at 15.6%.  That's a great indicator, but the newsmaker is U3.

The U3 rate is the percentage of the "participating labor force" that is unemployed.  That is all well and good, except that the Obama labor department has decided that it will simply manipulate the definition of "labor force" to suit its own needs.  And what the Obama administration has done is simply shrink the definition of the "labor force" by pretending that hundreds of thousands of non-working adults are no longer in existence for all intents and purposes.

If you are offended that under ObamaCare you may be considered "a unit," you should know that under Obama employment stats you may not even exist!  In fact, a lot of non-working adults who existed in October apparently no longer do exist officially.

In other words, in the universe Obama took over from George W. Bush, the unemployment rate would still be over 11%.  Now, the last time I checked, the planet has not gotten smaller, nor has the population of the United States.  (I am not sure about the sea levels.)  To thinking people, there is no legitimate reason to shrink the potential labor pool.  Of course, there is an illegitimate reason to do so: to protect the governing record of Barack Obama.  Anyone who follows politics even casually knows that if the general public ever really figured out that the real unemployment rate is over 11%, Obama would have zero chance of re-election.

Moreover, Obama's leftist collectivist governing leanings would be totally discredited, as would members of Congress who believe in the same principles.  Succinctly, an admitted 11% rate would destroy the American left politically.  The administration and their willing accomplices in the Jurassic media simply cannot afford for that to happen.

Among those they have not fooled, of course, is de facto Tea Party father Rick Santelli of CNBC.  "I don't trust [these numbers]," said Santelli Friday on Squawk Box at the very moment the figures were released.  "I want to see the labor force participation rate because personally I don't trust the U3 rate...and when you throw in the politics of the day -- because this is such a big number that resonates with the public -- there's a lot of movement in these numbers that can alter the rate significantly."

Santelli's initial instincts, of course, were right on the money.  The participation rate had been jiggered to make Obama look good.  Or, since it's 8.6, make him look less bad.  And yes, "the politics of the day," as Santelli said, is the entire reason.

Even Santelli's regular antagonist on CNBC, liberal economist Steve Liesman, admitted that this was the case -- albeit in gentler terms: "The workforce declined by 315 thousand and that makes it easier to get to the lower unemployment rate."  Uh, ya think?  Now, just where the hell did those 315 thousand people go?  They have given up hope, so the administration is just pretending that they aren't there anymore.

Actually, it's worse than that.  A closer look at the figures shows that some 435 thousand non-working adults have been statistically vaporized, while the newly employed 125 thousand folks are counted, equaling the net loss of adult workers of over 300 thousand.

Translation: the administration lied to us to make itself look good.  That big Obama supporter Steve Liesman is admitting this on an NBC network is significant.

Which is why I believe this cooking of the books may be reaching a critical mass of ineffectiveness.  Taking the work of Pethokoukis into account, the workforce is now officially only 64% of all adults -- which means that something on the order of only 55% of adults are now working.  (This should be the permanent metric, and not some esoteric U3 number, anyway, but that's another article).  This is not sustainable or healthy.

And while most folks don't realize that only 55% of adults are working, they know something is wrong.  And they know a lot of those other 45%.  And many are obviously in that 45%, and they know that many are not legitimately retired or legitimately disabled.

Europe is collapsing because too few people are pushing the cart and too many are on it getting a free ride.  But as they are finding out, that free ride ultimately becomes damned expensive.  And when it becomes "good news" to an administration that 315 thousand fewer adults even consider themselves in the workforce anymore, then you have a situation here that is about to become damned expensive, too.  And when that happens in the same month Obama can brag about his "8.6" -- you are nearing the time when many Americans will simply never believe anything their government tells them anymore.

Which, when you think about it, is really bad news for any politician who believes in government solutions for everything and good news for proponents of limited government.  Perhaps this blatant overplay on the part of the administration will come back to haunt them.