Extended Phenotype

The President is on vacation again. Nor is this a rare occurrence. According to today’s Washington Post:

This is Bush’s 33rd visit to his ranch since becoming president. He has spent all or part of 233 days on his Texas ranch since taking office, according to a tally by CBS News. Adding his 78 visits to Camp David and his five visits to Kennebunkport, Maine, Bush has spent all or part of 500 days in office at one of his three retreats, or more than 40 percent of his presidency.

Jeez, how much vacation time comes with this job? Seriously, this is virtually unprecedented as far as I can determine. Sure, the guy travels with an armada of communications technologies and dedicated planes, and probably can govern from anywhere on the planet. Sure, it’s a demanding job. But demanding jobs aren’t exactly unique in today’s competitive economy. But an average of 70 days a year at his ranch, not counting Kennebunkport or Camp David?

How’s your two weeks a year looking in comparison? Heck, I’m thinking about running in 2008 just to get some time off.

But isn’t it a bit hard to reconcile the notion that we’re fighting our generation’s defining battles (in Iraq and against terrorism globally), with the fact that the leader in this war has spent 40% of his time not in his office?

Bleary-eyed and clutching my coffee cup in a death grip, I watched Rice’s testimony this morning. Every uninformative minute of it. Naturally, this has already been discussed to death, but I heard nothing new. She did a good job of making everything seem smooth and continuous and conflict-free in the handover between the Clinton group and the incoming Bush team. The sad thing, of course, is that the documentary evidence simply doesn’t back her up on this.

Forget Clarke’s book for the moment, the primary documentary record doesn’t support her. The Center for American Progress has a point-by-point rebuttal on Rice’s testimony which is a good starting point. In terms of the documentary record, CAP has also compiled an exhaustive timeline of Administration public statements on national security starting on January 20, 2001 and ending on September 10, 2001. The 50-page document (with URLs and sources for each statement) clearly shows that counter-terrorism wasn’t high on the national security agenda.

The compilation analyzes 557 public statements concerning national security during the Administration’s first eight months in office. The single mention of al-Qaeda is in a signed continuation by Bush of the older Clinton executive order prohibiting transactions or business with the Taliban. Osama bin Laden is mentioned 19 times, 17 of which occur in the context of press briefings when journalists asked questions.

In contrast, the record shows that senior officials discussed Iraq and Saddam Hussein in 104 statements and missile defense in 101 statements. WMD were mentioned in 65 different statements.

Finally, the CAP compilation document also contains a day-by-day calendar of Bush’s schedule from August 6, 2001 through September 10th. August 6th, if you recall, is the day Bush was given the infamous President’s Daily Briefing (PDB) document titled “Bin Laden Determined to Strike Inside U.S.” This is turning out to be a fairly crucial document and should be declassified (with proper care for individual pieces of source material). Rice testified today that this PDB was an “historical document,” not a threat assessment. President Bush must not have considered it a strong threat, because on August 6th, 2001, he began a month-long vacation in Crawford.

In summary, it’s easy to listen just to the questions and testimony and conclude that it’s a “he-said/she-said” argument between Rice and Clarke. That impression, at least for me, is utterly dispelled by examining the documentary record of public statements and available memos. The documentary record firmly supports the substance of Clarke’s testimony.

Finally! The Office of the Solicitor General is doing an inquiry into whether the Treasury Department acted improperly in analyzing Kerry’s tax proposals. This is the first step, hopefully, in nailing the Bush campaign for repeated mis-use of civil servants and resources to aid its campaign. By Federal law, civil servants cannot work for political campaigns while on duty.

Treasury spokesman Nichols naturally defended their actions, saying “It is proper for the Treasury Department to analyze tax proposals so that members of Congress and the administration can be informed” — completely ignoring the fact that Kerry’s proposal isn’t a government proposal since he’s not (yet) President. Since Tom DeLay asked for the analysis, rather than the White House, presumably Nichols’ statement is designed to claim that they were simply fulfilling a normal request from the House Majority Leader. Yeah, right.

Hopefully, the Democrats will respond by floating a resolution to hold a full inquiry about whether the Bush Administration is using the whole Executive Branch as part of its re-election campaign. The use of government employees and money to analyze campaign plans is a blatant and illegal practice.

Following my earlier post, it’s important to keep in mind that although an increase of 308K jobs is certainly welcome, it’s going to take a number of months of growth at this rate or higher to simply catch up with the effects of population growth and new workers entering the workforce (on the young end of the demographic pipeline).

The number of jobs needed simply to keep up with young adults entering the workforce has been estimated at approximately 150K per month. That means that about half of March’s jobs can be statistically “absorbed” by growth in the overall size of the workforce, with only 150K jobs going towards re-employment of unemployed workers. I’ve seen estimates (in Paul Krugman’s column, I think, and elsewhere) that we need a sustained rate of around 450K jobs per month to make headway and bring the unemployment rate back to down to its non-inflationary minimum.

So the jury is still very much out on whether the “jobless recovery” has shifted gears on us. I certainly hope it has, but the details in the BLS report for March aren’t as encouraging as the sound bite.

As for my comment that we’re in a “mini-bubble” with the stock market, I don’t have time for a detailed and rigorous analysis tonight, but I’ll make a few observations (since Joseph at the Corpus Callosum asked), for what they’re worth. First, the Dow and S&P 500 are near their highest values since the 2000 collapse, and much of that growth has come in less than a year. Second, in the last 12 months we’ve seen the 9th longest run of growth in the S&P 500 without a 5% decline in its history. Third, I just took a random 5% sample of the S&P 500 companies, and nearly all of the sample was at or near their 52-week high, regardless of whether they’d reported strong profits for YE 2003. Fourth, P/E ratios are still very high compared to historical averages. The market has recovered, and companies are making money, but stock price recovery has vastly outpaced the real economy and its recovery.

You might quibble with these observations, and I hope to have time soon to perform more analysis, but it’s hard to escape the conclusion that the Fed’s program of lower rates has worked. The real economy has gotten as much stimulus out of interest rates as it’s going to, if it’s really true that GDP is growing around 4 percent. At this point, low interest rates are simply acting to increase speculation, not as a stimulus. It’s time to cool things off, albeit slowly, and let the recovery be a “real recovery” and not devolve into speculation. The recovery doesn’t need another correction to cause the bears to scurry back into hibernation and corporate boards to pull back in expansion and investment plans.

The presidential candidates are squaring off on March job growth, which seems stronger than previous months with what Bush describes as “308,000 new jobs.” In order to evaluate their views, I looked at the Bureau of Labor Statistics “Employment Situation Summary,” which is the source of the job growth number.

Nonfarm payroll did indeed increase by 308,000 in March, with unemployment essentially unchanged at 5.7 percent. So the real question is, why would the unemployment rate be unchanged if — to quote Bush yesterday — “People are finding jobs….America’s families and workers have reason to be optimistic.”

On the positive side, the BLS report does show that payroll growth was spread across sectors, instead of being concentrated in government hiring, as it was in February. Construction payrolls are up by 71,000 jobs, which is probably to be expected given the onset of spring and construction season. Service industries absorbed most of the growth, with 230,000 jobs in aggregate. These were fairly evenly spread across retail, professional services, education, “leisure and hospitality,” and government.

On the negative side (for economic policy), precisely zero jobs were created in manufacturing in March. Kerry attacked this record yesterday, saying that “there is not a single month of this administration that has seen the creation of a single manufacturing job.” I’m sure that’s true, but it’s unclear to me how Kerry will either, unless his anti-offshoring incentive plan works.

Also, it appears that within the retail sector’s 47,000 new jobs, retail food stores accounted for 13,000 of that due to the ending of a strike. This is an oddity of using the BLS data for evaluating policies — these are not new jobs, but they’re considered “not fully employed” during the labor dispute. So the real number of new jobs is probably closer to 295,000 in March.

The real key to the lack of strength in this report, however, comes from looking at continued growth in part time work “for economic reasons” (meaning hours were cut or job seekers could only find part time work). The number of persons employed part time for economic reasons increased in March to 4.733 million from 4.328 million in February, a net increase of 298,000 people who aren’t working full time. About half of this increase comes from workers whose hours were cut due to “slack work or business conditions”, and the other half are individuals who could only find part-time work.

If we were to measure unemployment by including the folks who have exhaused their benefits, or have stopped looking for work because they haven’t found a job in over a year, or have accepted part time work instead of full time work, the rate would 9.9 percent, not 5.7 percent. This is down 0.1 percent from last year at this time, and essentially unchanged throughout the last 12 months (except for a brief improvement last month due to government hiring).

In sum, the numbers are showing only microscopic improvement, and mostly through the expedient of not looking at “under employment” too closely. The “jobless recovery” continues in March. Bush can (and will!) spin these numbers to portray himself as leading a strong economic recovery, but the picture hasn’t changed. The broader economy is still fairly flat, and it’s merely the stock market that’s hot right now, in a little “mini-bubble.” But that’s another story entirely…