NYP with "Labor Department comes clean about fake jobs":
FINALLY, a confession!
I've been writing in this column for years that the way the Labor Department calculates the number of jobs in this country is deceptive.
In 11 of the 12 months, the government adds massive numbers of jobs -- sometimes more than 100,000 -- that it thinks, but can't prove, exist.
This is because the Labor Department uses something called the birth/death model, which assumes that no matter how bad the economy is, there are itty-bitty, newly-formed companies -- which can't be reached by government surveyors -- that are creating jobs.
I've said that this assumption is ridiculous -- that these companies probably don't exist. And non-existent companies can't create jobs.
Not only is the public fooled by this practice, but policymakers are being led astray. So the Labor Department, essentially, lied again when it reported last Friday that only 263,000 jobs disappeared from the economy during September.
As shocking as that figure was, the more truthful number was actually worse because there were 34,000 of these phantom birth/death jobs included in the count. Nearly 1 million of these non-existent jobs have been added to the government's count since the beginning of 2009, mostly this past spring.
As I've said before, these bogus jobs are what caused the employment numbers to look slightly better in March, April, May and June, and created the notion that the economy was somehow on the mend.
Right after Friday's report came out, Bloomberg News called Chris Manning, the national benchmark branch chief at the Labor Department's Bureau of Labor Statistics, and asked about the 34,000 probably non-existent jobs.
"In this period of steep job losses, the birth/death model didn't work as well as it usually does," Manning told Bloomberg. "To the extent that there was an overstatement in the birth/death model, that is likely to still be there." No freakin' kidding! This year alone, this model has added over 700,000 jobs that don't exist to the government's count.
Related:
Bob Herbert in a NYT op-ed, asks if Barack Obama "gets it"?
The big question on the domestic front right now is whether President Obama understands the gravity of the employment crisis facing the country. Does he get it? The signals coming out of the White House have not been encouraging.
The Beltway crowd and the Einsteins of high finance who never saw this economic collapse coming are now telling us with their usual breezy arrogance that the Great Recession is probably over. Their focus, of course, is on data, abstractions like the gross domestic product, not the continued suffering of living, breathing human beings struggling with the nightmare of joblessness.
Even Mr. Obama, in an interview with The Times, gave short shrift to the idea of an additional economic stimulus package, telling John Harwood a few weeks ago that the economy had likely turned a corner. “As you know,” the president said, “jobs tend to be a lagging indicator; they come last.”
The view of most American families is somewhat less blasé. Faced with the relentless monthly costs of housing, transportation, food, clothing, education and so forth, they have precious little time to wait for this lagging indicator to come creeping across the finish line.
I think Obama "gets it" just fine, hence allowing fake jobs to be reported so that magic number of 10 percent unemployment isn't hit, at least not officially, by the governments count with the fake jobs being counted.
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