From the outbox of Meyer’s inbox:

Technically this could be filed under the politics section but I put it here in the economy because that’s what is on everyone’s mind along with the gulf oil spill, the wars overseas, the out of control government spending and if LeBron James made the right decision to go to Miami. For the record, it was during former President Clinton’s first campaign when a staffer asked “how do we win elections?” to which he was given the answer, “it’s the economy, stupid.” That became the rally cry which swept Clinton into office. What will happen this November? Follow the money….

IT’S ALWAYS THE ECONOMY, STUPID by Ezra Klein writing for Newsweek Magazine.

It’s begun. With merely four months until the elections, we’re starting to see the articles outlining the angry divisions between the president’s counselors. The fight apparently pits the political team, which wants the president to turn his attention to the political problem of deficits, against the economic team, which wants him to keep focusing on economic stimulus. Politics versus governance is, of course, an age-old choice. The job of governing is different from the job of getting reelected. Or is it?

For decades now, political scientists have been building election models that attempt to predict who will win in November without making any reference to candidates or campaigns. They can get within 2 points of the final vote, and they don’t need to know anything about the ads and the gaffes and the ground games. All they really need to know about is the economy.

“In presidential elections,” says Princeton political scientist Larry Bartels, “a 1 percent boost in election-year income growth has typically increased the incumbent party’s vote share by about 2 percent. So an incumbent party that won 51 percent of the vote in an average economic year like 2004 would be expected to win only 46 percent in a recession year like 2008.” Which is, as you may remember, pretty much exactly what happened. Read More...

From the outbox of Meyer’s inbox:

Here were are again with a fresh batch of tasty job numbers. Well, maybe not so tasty as sour. Well, maybe not so sour as bland. Well… let’s face it everyone has an opinion on this new round of job numbers is supposed to mean. Unemployment rates are down but so are new hires. Wouldn’t that mean unemployment goes up? I need the Muppets to explain this. Which side of the analysis do you come down on?

WHAT THE LATEST UNEMPLOYMENT NUMBERS MEAN from Newsweek

The Bureau of Labor Statistics announced another set of harrowing job numbers Friday. The private sector added 83,000 new jobs, but the number of total jobs added was negative, as temporary census workers saw their positions come to an end. The unemployment rate dipped from 9.7 percent to 9.5 percent, although that’s a sign of would-be workers leaving the hunt, not recovery. What do the numbers mean? Five experts weigh in.

Resigned

Looking through the numbers, it seems more likely than ever that the U.S. is entering a lost decade much like what plagued Japan in the 1990s, libertarian think-tanker Samuel Staley argues in the right-wing National Review. What’s more, it doesn’t look as if there’s much we can do.

“Complicating matters, the so-called stimulus program is showing itself for the paper tiger it is. Despite filling pot holes, shifting home purchases up several months, and spending on marginally beneficial programs, construction unemployment hovers around 20 percent.”

Exhorting

Staley’s dangerously mistaken, counters Steve Benen, a liberal blogger and consistent stimulus cheerleader. In fact, Benen argues, these numbers show that the problem is deeper than we thought, and therefore we need a stimulus larger than we thought.

“Nevertheless, one can only hope that this report makes it abundantly clear to policymakers in Washington that more investment in job creation is necessary. Cutting spending and focusing on deficit reduction, as Republicans demand, may prove disastrous.” Read More...