Tuesday, July 11, 2006

Piling On -- But Why Not?

by Ken Houghton

There are enough economists and others in the blogsphere, both directly and indirectly, who have pointed out the lunacy of Larry Kudlow's latest declaration, but I particularly want to address this gem:
When this last happened in 2003-04 (remember the "jobless recovery" election-year rant of Democrats?)

Which would lead you to believe that people became better-employed in 2003-2004. As John Clute once said, let's look at the evidence.

Via Legal Fiction (out of Duncan via Ezra), we find the U.S. Census's Historical Poverty Tables. And we would expect a decline in real terms--or at least percentage--in people around the poverty level (as the marginal effect of the "recovery" should elevate people out of poverty). Instead, we have:

In simple terms:
1) Over 1,000,000 more people below 125% of the poverty line.
2) Over 150,000 less people (from a larger sample) above the line itself.

In short, at the margins, the percentage of people at or below the poverty line went from 15.4% to 15.7% (an increase of 0.3%) during Kudlow's "recovery."

Does anyone still wonder why the "recovery" bears the adjective "jobless"?

Cross-posted at Economics Question of the Day

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