Two Grim Fairy Tales: Jobs and the GDP

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Fairy Stories

According to this government storyteller, everything is going great. There is reason to doubt.

“Tell me a story.” It may be one of the most often-asked human questions. Beginning in early childhood we all hunger for stories that portray the world as we’d like it to be, peopled with witches and dragons that are easily bested by fairy princesses and handsome princes. The stories weave a happy alternate universe in which Santa lives at the North Pole, the Tooth Fairy creeps our bedroom (in a good way) after we lose a tooth, the Easter Bunny hides chicken eggs in our house and the occasional monster peers out from under our bed. In recent decades, of course, “tell me a story” has been replaced by “turn on the TV,” or “where is my IPad,” but the need is the same.

All of which is fine as long as at some point, preferably well before adulthood, we abandon our enchanted kingdoms for the real world and start dealing with people and events as they are. At a certain age, when Mom and Dad insist that Santa came down the chimney to put the presents under the tree, you know better. When the pundits tell you the president “runs” the economy, and is doing a masterful job, you know better.  But the yearning to hear a familiar story again, to linger in a happy world even if it is imaginary, goes deep and lasts long. It has to be one reason an awful lot of Americans are so gullible when offered a fairy tale.

The number one fairy tale in play right now is that the American economy is the best it has ever been — the best in the history of our country, says the fairy prince in the oval office, and it’s all his doing, he says. Journalists, who react to a fairy tale like Pavlov’s dogs to a ringing bell, are singing along in time. It’s not just the President’s say-so, they have evidence: the latest government reports on gross domestic product (GDP) and employment.

The GDP Fairy Tale. Once upon a time there was a little boy who believed he would grow forever, and that the faster he grew the happier he would be. Oh, no, that wasn’t a little boy — that would be ridiculous — that was every industrialized country in the world. Their governments are in a constant kerfuffle about whose GDP is bigger and whose is growing faster. And our government says our GDP is huge again, growing at a rate that, were it to continue for a year, would amount to 3.2%.

Now, we do not have to venture far into the swamps inhabited only by economists to find some things that offend common sense:

• Most of the growth came from a sudden swelling of inventories, unsold stuff piling up in warehouses. But manufacturing was down, imports were down, so where, please Daddy, did all that pixie dust come from?
• Stripped of various kinds of pixie dust, including mysteriously swollen inventories, consumer sales — the engine of our economy — according to Barron’s “grew at only a 1.3% annual rate, half the pace of the fourth quarter. That was the weakest rate since the second quarter of 2013.”

The Jobs Fairy Tale. But wait, there’s more. The tears of euphoria had barely dried on the GDP report when, last Friday, the jobs report came out and the Trumpits went nuts again. Unemployment rate down to 3.9%! 312,000 jobs added in December! The best in the history of the world! Is this a great president or what? And yet:

• As the government report insists, and nobody reports, the initial estimate of the jobs situation is also known as a guess, based on incomplete numbers and shaky assumptions, the jobs-added number accurate to plus-or-minus 120,000. Monthly revisions will follow, and lately they are often downward revisions. Any celebration of 312,000 new jobs is way premature.
• The unemployment rate. meanwhile, is defined as the percentage of people actively looking for work who don’t have a job. It is comfortably low. What is uncomfortably high, on the other hand, is the number of people who have wanted and needed a job without success for so long that they have given up. By the government’s count there are just over six million unemployed in America. But there are 95 million American adults who are classified as “not in the labor force.” A number that suggests that the real unemployment rate is above 20%. Navigating the job market is tough, and for those seeking employment, it’s essential to be prepared for challenges like learning how to cope with an employer’s prejudice. Staying informed about employment rights and seeking guidance becomes crucial in overcoming obstacles in the job search.

In the real world, debt is strangling almost everyone, stores are closing, essential costs of living are going up, suicide rates are going up, and hope for a better day is fading. So who should be blamed for wanting to hear a story that starts “Once upon a time,” and ends happily?